Develop the Strategy

The Starting Point for Strategy Execution

B008 Indrajit B021 Dhruv
B009 Vipul B051 Pratik
B015 Tanmay B056 Gaurav
Presented by:
Strategy Development
Closed Loop process : Each part
influences other
Strategic planning : Highest User
Satisfaction (3.93/5) among all
management tools
Key Steps :
Reaffirmation of mission, values
and vision
Analysis of external and internal
forces affecting strategy
Identification and analysis of key
issues
Formulation of new strategy
Mission, Values and Vision
Mission : Companys purpose
Values: Internal compass that guides all actions
Vision: Aspiration for future results
Mission and Values : Stable over time
Vision : Stable over 3-5 year plan
The Mission Statement
Reason for
organizations
existence What it
provides to clients
and customers
Informs employees
what they are
working for
Must be brief
Googles mission is to
organize the worlds
information and make it
universally accessible
and useful.
At Microsoft, mission is
to enable people and
businesses throughout
the world to realize their
full potential.
The Value Statement
Prescribes its attitude, character and behaviour
Does not change from situtation to situation, time to time or
person to person
Considered to be Soul of a company
1. Focus on the user and all else will follow.
2. Its best to do one thing really, really well.
3. Fast is better than slow.
4. Democracy on the web works.
5. You dont need to be at your desk to need
an answer.
6. You can make money without doing evil.
7. Theres always more information out there.
8. The need for information crosses all
borders.
9. You can be serious without a suit.
10. Great just isnt good enough.
The Vision Statement
Mid to long term goals of organization
Market oriented and expresses the desired perception of company by world
Stretch Goal
Should be ambitious and challenge all teams
Should come directly from top management
Define bold commitments to BHAGs
Clear time frame and target

Leeds University, London : Our vision and strategy is that by 2015 our
distinctive ability to integrate world-class research, scholarship and education
will have secured us a place among the top 50 universities in the world.
Vision Statement Qualities
Stretch Goals : Top 50
Definition of niche: World class research, scholarship and education
Time horizon : By 2015
Strategic Change Agenda
A management tool to explain why transformational
change is necessary and how the organization aims to
undertake these changes
Elaborates the redefined vision statement to uninformed
employees of organization
Promotes the sense of urgency and how the organization
intends to create value in future
Provides a comparison chart of the current processes with
the aimed processes over next 3-5 years
Strategic Change Agenda
Strategic Change Agenda
Drafted by the FBI Director Mr. Robert Mueller.
Transition from case driven organization to threat
driven organization
Shift of work culture from traditional operational silos
to integrated teams and endorse collaborative effort
with all federal and local authorities
Circulated to all teams with constant reminders why
strategic change agenda was necessary for US
national security
FBI Post 9/11
Defining the Enhanced Vision
Companies require integrated strategies
60% organizations lack such an integration
The executive team can use the strategy maps four perspective
framework to define an enhanced vision
Comprehensive picture of enabling factors to achieve the mission

Nemours Strategy Map Architecture
Conduct Strategic Analysis
PESTEL Analysis
Political
Economic
Social
Technological
Environmental
Legal
Michael Porters Five
Forces
Bargaining power of buyers
Bargaining power of suppliers
Availability of substitutes
Threat of new entrants
Industry Rivalry
External Analysis
Internal Analysis
Examining an organisations performance and capabilities
Value Chain Analysis
Helps identify those activities that the organisation needs to perform better and
different than competitors to gain advantage
SWOT Analysis
1. Articulation of org
aspirations
2. Identify business risks
to be mitigated
Strategic analysis results in a set of strategic issues
that must be addressed
Formulate the Strategy
Stimulating Creative Strategies
Resource
based view,
Core
competencies,
Value based
Mgmt, Profit
from the core,
Blue Ocean
TQM, Six
Sigma, ISO,
Lean
Manufacturing,
Minimize risks,
Internal
controls &
COSO
Methodologies to support strategy formulation process
The expected outcome from any strategy formulation approach is to develop a direction that
differentiates the organisation from its competitors to gain sustainable competitive advantage
Using Strategy Map to guide strategy selection
If company has poor capital utilization Value based
management approach for financial strategy
If company does not have distinctive brand or market
presence identifying attractive customer segment, blue
ocean etc
If distinctive capabilities in business processes resource
based view, identifying core competency
If great human capital base create a learning organization,
encourage new strategies
The OAS Statement
Select the strategy
Codify to communicate to all managers and employees
Objective (O)
Similar to vision statement
Quantitative goal profitability, size, market share etc
Advantage (A)
Means by which enterprise will achieve its objective
Describes value proposition of the company
Low cost or differentiation through features, services etc
Scope (S)
The domain in which the enterprise intends to operate
Targeted customer segment, breadth of product line, geographic locations served
The OAS Statement
To be the most profitable US-based airline(O)

..by offering the speed of airline travel at a
price, frequency, and reliability of cars, buses and
trains(A)

..to travellers who are price sensitive and who
value convenient flights.(S)
Southwest Airlines
Strategy direction statements
After strategic analysis prepare a direction statement
for each of the identified strategic issues
Its like a vision statement for each strategic issue
Three components:
1. Strategic Objectives: defines specific goal to be
achieved
2. Do-wells: identify critical few activities that must be
mastered if the objective is to be achieved helps in
designing strategic maps
3. Preliminary measures: these are a first pass at the
potential measures to be used on the Balanced
Scorecard
Strategy direction statements
Incremental vs Transformational Change
Companies observe and adapt to strategies of first mover
Strategies last about 3-5 years
Every year, companies make small incremental changes to
their strategy
When strategy has run its course or strategy not successful,
company goes for transformational change
To develop new strategy, company might change mission,
vision, values, expectations, OAS and enabling capabilities
Eg. Marriott Vacation Club International wants to go for
transformational change in its policies; HSBC Rail did
scenario analysis to reach viable solution for future
problems; Intel changed product offering in 1980s
Triggers of Transformational Change
Burning platform
of failed strategy
Companies would rather change strategy than
get burned by failed strategies
Cigna Property and Casualty
Mobil Marketing & Refining
AT&T Canada
New Leader
Comprehensive review and transformational
update of existing strategy
Happens many a time for burning platforms of
failed strategies
Triggers of Transformational Change
Technological
changes
Wells Fargo changed principles
because of online banking
Disrupted existing strategies in many
industries
Macroeconomic
Increase in input
Foreign exchange valuation
Regulation changes
Summary
Identify future problems at the earliest
A combination of incremental and transformational change is required.
Eg: Chase
Corporate team should meet annually to update strategy
Reviews, reaffirms the mission, vision and values through SWOT,
PESTEL and other tools
Careful analysis of external changes and internal data to validate strategy
should be applicable for one more year
Else, transformational strategy to be applied for next several years
Thank You!