business strategy lecture 3

8/3/2019 Business Strategy Lecture 3

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Management Accounting Business Strategy


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Strategic Planning Model

Reassess anddevelop the

Organizationsmission andobjectives

Reassess anddevelop the

Organizationsmission andobjectives

Formulatestrategies

Formulatestrategies

Implementstrategies

Implementstrategies

Evaluateresults

Evaluateresults

Analyzethe

environment

Analyzethe

environment

IdentifyOpportunities

Andthreats


Andthreats

Analyzethe

Organizationsresources

Analyzethe


IdentifyStrengths

andweaknesses

IdentifyStrengths

andweaknesses

Identify theOrganizationsCurrent vision

mission,Objectives, and

Strategies

Identify theOrganizationsCurrent vision

mission,Objectives, and

Strategies

What is Strategy ?


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What dowe Want to

Become ?

Intellectual thoughts aboutfuture Vision

General Motors vision is to be the world leader in transportation productsand related service

Reassess anddevelop the Organizations

mission and objectives



Formulatestrategies

Formulatestrategies

Implementstrategies

Implementstrategies

Evaluateresults

Evaluateresults

Analyzethe

environment

Analyzethe

environment


Andthreats


Andthreats

Analyzethe


Analyzethe


IdentifyStrengths

andweaknesses

IdentifyStrengths

andweaknesses

Identify the OrganizationsCurrent vision mission,

Objectives, and Strategies



Vision


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What dowe Want to

Become ?

Intellectual thoughts aboutfuture

Vision

General Motors vision is to be

the world leader intransportation products and

related service

Vision

It is the wish to become leader in

some fieldWhere theorganizationaspires to be

in future?

One the

organizationstrives to achieve

in long term

It is wish to contribute to somemajor cause

General Motors vision is to be the world leader in

transportation products and related service


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Vision

Vision

Dells vision is to create a company culture where environmentalexcellence is second nature

HowHow thethe organizationorganization wantswants toto bebe perceivedperceivedinin thethe futurefuture whatwhat successsuccess lookslooks likelike

AnAn expressionexpression ofof thethe desireddesired endend statestate

ChallengesChallenges everyoneeveryone toto reachreach forfor somethingsomethingsignificantsignificant inspiresinspires aa compellingcompelling futurefuture

ProvidesProvides aa longlong--termterm focusfocus forfor thethe entireentireorganizationorganization


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Strategic Planning ModelComponents of Vision

Core ideology Core Values - timeless guiding principles

Core Purpose - reason for being

Envisioned future Big Hairy Audacious Goals (BHAG) -clearly articulated goals

Vivid description - a graphic description of whatsuccess and the future will be like

Recognition of service to stakeholders Owners/creditors

Employees

Customers


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Strategic Planning ModelVision Descriptors

Adept

Aggressive

Agile

Aligned

Assertive

Available

Best-in-class

Challenging

Clear

Competent

Complex

Compliant Conservative

Coordinated

Critical

Direct

Disciplined

Effective

Efficient

Enduring

Expanding

Expert

Fast

Fast-paced

Financially-sound

Focused

Growth Healthy

Improving

Incentivized

Equal

Increasing

Solid

Solvent

Stable

State of the Art

Strong

Streamlined

Sufficient

Strategic

Sustainable

Timely

V

alue-added Vigilant

Visionary

World-class

Informative

Innovative

Leading

Logical

Major

Nimble

Pioneering

Protected

Organized

Over-Arching

Quick Ready

Responsive

Savvy

Simple


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Strategic Planning ModelVision

Tysons vision is to be the worlds first choice for protein solutionswhile maximizing shareholder value (Good statement, unless Tysonprovides non protein products)

General Motors vision is to be the world leader in transportationproducts and related service (Good statement)

Pepsi Cos responsibility is to continually improve all aspects of theworld in which we operate- environment, social, economic creating abetter tomorrow than today (Too vague, it should reveal beverage andfast food)

Samsonites vision is to provide innovative solutions for the travellingworld (Need to be more specific, may relate with product benefits)

ICMAPs vision is to be the preference in value optimism for thebusiness (__________________)


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Strategic Planning ModelImportance of Vision

Shared Vision --

Creates commonality of interests

Reduce daily monotony Provides opportunity & challenge

Profit & vision are necessary to effectivelymotivate a workforce


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What is ourBusiness ?

Reason for existence Mission

FedEx is committed to our people Service Profit Philosophy. We willproduce outstanding financial returns by providing totally reliable,competitively superior, global, air-ground transportation of high-prioritygoods and documents that require rapid, time-certain delivery





FormulatestrategiesFormulatestrategies

ImplementstrategiesImplementstrategies

Evaluateresults

Evaluateresults

Analyze

theenvironment

Analyze

theenvironment


Andthreats


Andthreats

Analyzethe


Analyzethe


IdentifyStrengths

andweaknesses

IdentifyStrengths

andweaknesses





Mission


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What is ourBusiness ?

Statement for purpose thatdistinguishes one organizationfrom other similar organization

MissionCreed statement, statement ofpurpose, statement of beliefs,

statement of philosophy

Mission

What is ourmission ?

Reason for your

existence

Basis for establishing objectives

and formulation of policies

FedEx is committed to our people Service Profit Philosophy. We will produce outstandingfinancial returns by providing totally reliable, competitively superior, global, air-groundtransportation of high-priority goods and documents that require rapid, time-certain delivery

Reveals wh

om organizationwants to serve


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Mission

Mission

CapturesCaptures thethe essenceessence ofof whywhy thethe organizationorganizationexistsexists WhoWho wewe are,are, whatwhat wewe dodo ExplainsExplains thethe basicbasic needsneeds thatthat youyou fulfillfulfill ExpressesExpresses thethe corecore valuesvalues ofof thethe organizationorganization

ShouldShould bebe briefbrief andand toto thethe pointpoint EasyEasy toto understandunderstand IfIf possible,possible, trytry toto conveyconvey thethe uniqueunique naturenature ofofyouryour organizationorganization andand thethe rolerole itit playsplays thatthatdifferentiatesdifferentiates

itit fromfrom othersothers

FedEx is committed to our people Service Profit Philosophy. We will produce outstandingfinancial returns by providing totally reliable, competitively superior, global, air-groundtransportation of high-priority goods and documents that require rapid, time-certain delivery


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Strategic Planning ModelMission Statement Components

Customers - who are the firms customers

Products or services what are the firms' major products or services

Markets Geographically where does the firm goes?

Technology is the firm technologically current?

Concern for survival, growth, and profitability - is the firm committedto growth and financial soundness

Philosophy what the beliefs, values, aspiration, and ethicalpriorities of the firm

Self concept what is the firms distinctive competence or majorcompetitive advantage

Concern for public image is the firm responsive to social,community, and environmental concerns?

Concern for employees are employees a valueable asset for thefirm


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Strategic Planning ModelMission Statement Components

MissionElements

Customers Markets

Employees

PublicImage

Self-Concept Philosophy

SurvivalGrowthProfit

ProductsServices

Technology


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Strategic Planning ModelCharacteristic of mission statement

Broad in scope

Les than 250 word

Inspiring

Utility of firms products

CSR

Environment

Reconciliatory

Enduring

Include nine components


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Strategic Planning ModelCharacteristic of mission statement

Declaration oforganizational attitude

Feasiblealternatives

Motivationalguidelines

length Future outlook

Stakeholders

Customer Orientation

Social policy

Anticipation of customers

Customers


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Strategic Planning ModelMission

Pepsi : We aspire to make PepsiCo the worlds (3) premier productcompany, focused on convenient food and beverages (2). We seek toproduce healthy financial rewards for investor (5) as we provideopportunities for growth and enrichment to our employees (9), ourbusiness partners and communities (8) in which we operate. And in

everyth

ing we do, we strive to act with h

onesty, openness, fairness andintegrity (6) (customers. Technology, self concept is missin)

Ben & Jerrys mission is to make, distribute and sell the finest qualityall-natural ice cream and related products in a wide variety ofinnovative flavors made from Vermont dairy products. To operate the

Company on a sound financial basis of profitable growth, increasingvalue for our shareholders, and creating career opportunities andfinancial rewards for our employees. To operate the Company in a waythat actively recognizes the central role that business plays in thestructure of society by initiating innovative ways to improve the qualityof life of a broad communitylocal, national and international.


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Strategic Planning ModelGood and Bad - Mission

To Make People Happy

To Explore the Universe

and Search for Life

and to Inspire the

Next Generation ofExplorers

NASA

Walt Disney

Does a good job of expressing the core values

of the organization. Also conveys uniquequalities about the organization.

Too vague and and unclear. Need more

descriptive information about what makes the

organization special.


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COMPONENTS

Organization Customers ProductsServices Markets

Concern for

Survival,

Growth,Profitability Technology

PepsiCo Yes No No Yes No

Ben & Jerry's No Yes Yes Yes No


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COMPONENTS

Organization PhilosophySelf-

ConceptConcern forPublic Image

Concern forEmployees

PepsiCo Yes No No No

Ben & Jerry's No Yes Yes Yes


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Strategic Planning ModelImportance of mission

Mission

Resource Allocation

Unanimity of Purpose

Organizational Climate

Focal point for workstructure


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Strategic Planning ModelProcess of developing vision and mission statements

Involvement of managers

Read literature

Develop statements throughdifferent individuals

Develop single statement

Discuses , modify and finalize

Communicate


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Strategic Planning ModelVision vs Mission

What do we Want to Become ?What is our Business ?

Ultimate destination Means to destination

The vision is more broadand future oriented

the goal on the horizon

The mission is more focused h

ow you will get to th

eh

orizon


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Strategic Planning ModelBenefits of having clear mission and vision statement

Clarity of purpose

Base of all sp activities

Direction

Focal point

Divergent views

Sense of share expectations

Send of work Promote motivated organization

Organizational performance

Synergy


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Strategic Planning ModelImportance (benefits) of vision and mission statement

Unanimity of propose

Standard

Organizational climate

Focal point for individuals

Translation of objectives

Translation of organizational purpose and objectives

2x average return on shareholders equity

Positive relationship to company performance

30% high return on certain financial measures

Research results are mixed, however, firmswith formal statements --


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Questions ?


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Thank You

business strategy lecture 3

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