STRATEGIC MANAGEMENT

COMPANY VISION
and MISSION
Prepared and Presented by:
DR BENARD OYAGI
E-MAIL nyakwebabernard2891@gmail.com
Mob: 0741857637 /+254748679101
Strategic management
 Unit -1 Strategy and Process
Contents:
 Conceptual framework for strategic
management the concept of strategy and
the strategy formation process-
Stakeholders in business- Vision Mission
and purpose- Business definition, objectives
and goals- corporate Governance and social
responsibility
Unit-2 :Competitive Advantage
External Environment- porter‟s five forces
Model- Industry Evolution- Globalization
and Industry Structure competitive
advantage Resources- capabilities and
competencies- core competencies- Low
cost and differentiation, Distinctive
Competencies- Resources and
capabilities.
 Unit-III Strategies
The generic strategic alternatives- stability,
Expansion, Retrenchment and combination
strategies, Environment- Corporate strategy-
Vertical Integration- Diversification and
strategic Alliances- Strategic analysis and
choice- Environmental Threat and opportunity
profile (ETOP)- Organizational Capability
profile- Strategic Advantage profile- corporate
portfolio Analysis- SWOT Analysis-
UNIT-IV Strategy Implementation
The Implementation process, Resource
allocation, Designing organizational
Structure- Designing Strategic control
systems- Matching structure and control to
strategy – Implementing strategic change-
politics- power and conflict
 Unit v: Strategic evaluation
monitoring and control of strategic f
Techniques Of Evaluation And Control –
Strategic Control And Operational Control,
Budgetary Control, Techniques Of
Evaluation And Control – PERT / CPM,
Variance Analysis, Measuring
Organizational Performance, Taking
Corrective Action.
 Learning Objectives
 Describe a company mission and explain
its value
 Explain why it is important for the mission
statement to include the company basic
product or service, its primary markets,
and its principal technology
 Discuss the importance of company
philosophy, public image, and company
self concept to stockholders
 Describe the company’s board of directors
 Concept of strategy
The term strategy is derived from a Greek
word strategos which means generalship. A
plan or course of action or a set of decision
rules making a pattern or creating a
common thread.
Chandler defined strategy as: the
determination of the basic long term goals &
objectives of an enterprise & adoption of the
course of action for carrying out this goals.
 What is Strategic Management?

Strategic Management: Is dynamic

process of formulation, implementation,
evaluation and control of strategies to realize the
organizations strategic intent.

Art and science of formulating, implementing, and

evaluating cross-functional decisions that enable
an organization to achieve its objectives
Why strategic management? process of
formulation, implementation, evaluation
and control of strategies to realize the
organizations strategic intent while
strategic planning is the process of
strategic formulation
 “Strategic Management”
Synonymous with
“Strategic Planning”

• Strategic management
 Used more often in academia

• Strategic planning
 Used more often in the business world
 Brief History
 1950s
 Term strategic planning originates

1960s – 1970s
 Strategic planning very popular
 Widely viewed as panacea for proble
 Brief History
 1980s
 Strategic planning cast aside
 Planning models of strategic formulation

 1990s–2000
 Revival of strategic planning
 Widely practiced in business world
The greatest challenge for a successful
organization is change.
This threatening change may either be
internal or external to the enterprise
A strategy is an administrative course of
action designed to achieve success in the
face of difficulties e.g change mgt, (during
the Covid 19 time
Its a plan for meeting challenges posed by
activities of competitor and environmental
forces
 Basic concepts of strategy:
 Competitive advantage — operating with
an attribute or set of attributes that allows
an organization to outperform its rivals.
 Sustainable competitive advantage —
one that is difficult for competitors to
imitate (hr elements come in)
 Basic concepts of strategy (cont.):
 Strategy — a comprehensive action plan
that identifies long-term direction for an
organization and guides resource
utilization to accomplish organizational
goals with sustainable competitive
advantage.
 Strategic intent — focusing all
organizational energies on a unifying and
compelling goal
 Features of strategic
management
1. Objectives
2. Futures oriented
3. Availability & allocation of resource
4. Influences of environment
5. Universal applicability
6. Level of strategy
7. Review
 Conceptual framework for the
development of strategic management
 Strategic Advantage
 Organizational capability
 Competencies
 Synergistic Effects
 Strengths and weaknesses
 Organizational Resources
 organizational behavior
 Role of Objectives:
1. Objectives define the organizations
relationship with its environment.
2. Objectives help an organization pursue
its vision and mission.
3. Objectives provide the basis for strategic
decision making.
4. Objectives provide the standards for
performance Appraisal
 Objectives
Objectives give the direction for which action
plan is formulated.
Xteristics of objectives are:
  have time frame
  be attainable
  be challenging
  be Understandable
  be measurable and controllable
 FUNCTIONS OF STRATEGIC MANAGEMENT

1. It provides a dual approach to problem

solving
2. It focuses attention upon changes in the
organizational set up
3. It offers a technique to manage changes
4. It provides the management with a
mechanism to cope with environment.
Strategic management process
The strategic management composes of
four stages namely:
1.Establishment of strategic intent
2.Formulation of strategies
3.Implementation of strategies
4.Strategic evaluation
 1.
Establishment of strategic intent
Creating and communicating a vision
Designing the mission statement
Defining the business
Adopting the business model
Setting objectives
 Formulation of strategies

Framing of mission statement

Analyzing of internal and external
environment
Setting of objectives
Performance comparison
Alternative strategies
Evaluation of strategies
Choice of strategy
 Implementation of strategies

Formulation of plans
Identification of activities
Grouping of activities
Organizing resources
Allocation of resources
 Strategic evaluation
Setting of standard
Measurement of performance
Comparison of actual performance with set
target performance
Analyzing deviation and taking corrective
action
 Corporate Strategy is operationalized by division or
functional strategies.
 Strategy is not a substitute for management.
 Strategy can never be perfect, flawless, and optimal
because it is made in response to situation which is
constantly changing.
 ategy
 Good strategy, makes allowances for possible
miscalculation and unanticipated events.

Four Generic Strategic Alternatives:

 Stability Strategy
 Expansion Strategy
 Retrenchment Strategy
 Combination Strategies
 Stability Strategies
There are a number of circumstances in
which the most appropriate growth stance
for a company is stability, rather than
growth.
This stability strategy alternative (essentially a timeout) may
be appropriate in either of two situations: (a) the need for
an opportunity to rest, digest, and consolidate after
growth or some turbulent events - before continuing a
growth strategy, or (b) an uncertain or hostile
environment in which it is prudent to stay in a "holding
pattern
 Expansion Strategy
 We further define an expand strategy as
one in which we are growing significantly
faster than the market or market segment
is growing overall:
To follow an expand strategy, a company must
decide to provide the resources which will
support the targeted growth rate;
 Expansion though Diversification – Entry into new product, new market etc.
 Expansion through Merger and Acquisition
 Retrenchment Strategy
Turnaround: This strategy, dealing with a
company in serious trouble, attempts to
resuscitate or revive the company through
a combination of contraction (general,
major cutbacks in size and costs) and
consolidation:
Sell Out
Liquidation:
 Combination Strategy
 Corporate planning aimed at achieving two or more goals (such as
consolidation, growth, stability) simultaneously. Eg. An organization
may seek stability in some areas of activity, expansion in some, and
retrenchment in the others
 What is Company Vision?
Defines the desired or intended future
state of an organization or enterprise in
terms of its strategic direction. Vision
is a long term view, sometimes
describing how the organization would
like the world in which it operates to be.
Agreement on the basic vision for which the
firm strives to achieve in the long term is
especially important
 Vision
 “What do we want to become?”:

Vision Statement Examples

 Tyson Foods’ vision is to be the world’s

first choice for protein solutions while
maximizing shareholder value
 Vision Statement Examples

General Motors’ vision is to be the

world leader in transportation
products and related services.
 Vision Statement Examples

 PepsiCo’s responsibility is to continually

improve all aspects of the world in which
we operate – environment, social,
economic – creating a better tomorrow
than today
 Vision Statement Examples

Dell’s vision is to create a company culture

where environmental excellence is second
nature.
Mission Statement
 Answers the question:
 “What is our business?”
Reveals:
 whatthe organization wants to be
 whom we want to serve
 Mission Statement
 An enduring statement of purpose that
distinguishes one organization from other
similar enterprises
 A declaration of an organization’s “reason
for being”
 Reasons for having a
vision/mission statement
 Gets team focused.
 Shows a picture of where the company is
going.
 Instills focus, discipline, and structure
within the organization.
 Ensures that team understands
company direction.
  
 Critical questions to answer while formulating vision
statement

I keep six honest serving Men/Women.

They taught me all I know. Their names are
What, Why, When, How, Where and Who.
 How to write a Vision?
 
 Determine the organization's overriding goal
 State what the organization visions itself to be in terms of
values, employees, growth and contributions to society.
 Look at vision statements of competitors in the industry
 Use wording that will inspire your team. Think of
adjectives and sentences that will get the team excited
and will make them think they are part of something that
is much bigger than something they could have thought
of themselves.
 Get other people on the team to critique the draft of the
vision to make sure it's effective and inspiring. If there are
any key customers the organization trusts, ask them to
review the draft too.
What is Company Mission?
Company Mission
The unique purpose that sets
a company apart from
others of its type and
identifies the scope of its
operation. In product, market,
and technology
 Mission Statements are also
called
 Creed statement
 Statement of purpose
 Statement of philosophy
 Statement of beliefs
 Statement of business principles
 A statement “defining our business
Samsung's vision statement is “to inspire the
world with our innovative technologies,
products, and design that enrich
people's lives and contribute to social
prosperity by creating a new future,
Our vision is to become the world's leading
football foundation that changes the
lives. Our mission is to bring together the
BCD family to create life changing
opportunities for children and young people
in BCD City Region and beyond
ABC Football Club has strived to foster a
sense of pride, belonging and tradition
underpinned by an innovative spirit and
desire to be at the cutting edge of
sporting and social developments.

At  KBZ CLUB , our vision is to be the

best football club in the world,
both on and off the pitch. As we strive
towards that goal, we have laid out .
Uganda Vision 2040 provides development
paths and strategies to operationalize
 Uganda's Vision statement which is “A
Transformed Ugandan Society from a
Peasant to a Modern and Prosperous
Country within 30 years
 Mission Statement Examples
We aspire to make PepsiCo the world’s
premier consumer products company,
focused on convenient foods and beverages.
We seek to produce healthy financial
rewards for investors as we provide
opportunities for growth and enrichment to
our employees, our business partners and
the communities in which we operate. And in
everything we do, we strive to act with
honesty, openness, fairness and integrity
 Mission Statement Examples
Dell’s mission is to be the most successful
computer company in the world at delivering
the best customer experience in markets we
serve. In doing so, Dell will meet consumer
expectations of highest quality; leading
technology; competitive pricing; individual and
company accountability; best-in-class service
and support; flexible customization capability;
superior corporate citizenship; financial
stability
Importance of Mission
Benefits from a strong mission

Unitary of Purpose

Resource Allocation
Mission
Organizational Climate

Focal point for work

structure
 Products
Services Markets
Customers

Technology

Employees
Mission
Elements
Survival
Growth
Profit
Public
Image
Self-Concept
How to write a Mission?
 Ask "What do we do?"; "How do we do it?";
and "For whom do we do it,"
 Create a draft mission statement describing
how the company uniquely answers these
questions. Touch on the organization's current
operations and the industry it is in.
 Look at competitors in the industry and use
their mission statements for research. Ask
yourself what works and what does not work.
Revise your mission statement as needed.
 Get feedback from other members of the
organization once the statement is drafted. 
 The Difference between
Vision & Mission
Mission - The Present
Definition: An assignment one is sent to carry
out; a self-imposed duty. A mission statement
identifies the reason for the existence of the
organization. The statement should be linked
to the overall operations and business of the
organization
A Mission statement is more specific to what
the enterprise can achieve itself.
To remain competitive, companies
develop strategies that focus on:
1. Core competence
 A business activity that an organization does
particularly well in comparison to competitors.

2. Synergy
 The condition that exists when the
organization’s parts interact to produce a joint
effect that is greater than the sum of the parts
acting alone.

3. Value Creation
 The heart of strategy.
 Value can be defined as the combination of
benefits received and costs paid by the
customers.
 Levels of Strategy
 Corporate-Level Strategy
 The level of strategy concerned with the question, “What
business are we in?”. Pertains to the organization as a
whole and the combination of business units and
product lines that make it up.
 Business-Level Strategy
 The level of strategy concerned with the question, “How
do we compete?”. Pertains to each business unit or
product line within the organization.
 Functional-Level Strategy
 The level of strategy concerned with the question, “How
do we support the business-level strategy?”. Pertains to
all of the organization’s major departments.
Strategy Formulation Versus Implementation

 Strategy Formulation
 The stage of strategic management that involves
the planning and decision making that lead to the
establishment of the organization’s goals and of a
specific strategic plan.

 Strategy Implementation
 The stage of strategic management that involves
the use of managerial and organizational tools to
direct resources toward achieving strategic
outcomes.
 Situation Analysis
 Analysisof the strengths, weaknesses,
opportunities, and threats (SWOT) that affect
organizational performance.
 Strengths
 Positive internal characteristics that the organization can exploit to
achieve its strategic performance goals.
 Weaknesses
 Internal characteristics that might inhibit or restrict the
organization’s performance.
 Opportunities
 Characteristics of the external environment that have the potential
to help the organization achieve or exceed its strategic goals.
 Threats
 Characteristics of the external environment that may prevent the
organization from achieving its strategic goals.
SWOT analysis of strengths, weaknesses,
opportunities , and threats
 Competitive Strategies
1. Differentiation
 a type of competitive strategy with which the
organization seeks to distinguish its products or
services from competitors.
2. Cost Leadership
 A type of competitive strategy with which the
organization aggressively seeks efficient
facilities, cuts costs, and employs tight cost
controls to be more efficient than competitors.
3. Focus
 A type of competitive strategy that emphasizes
concentration on a specific regional market or
buyer group.
Formulating Functional-Level Strategy

the action plans adopted by major

departments to support the execution of
business-level strategy.

major organizational functions include

marketing, production, finance, human
resources, and research & development.
 Five Forces Affecting Industry Competition

•Internet reduces Potential New

barriers to entry Entrants

Internet blurs differences among

competitors in an industry

Threat of Substitute Rivalry Bargaining

Products among Power of
Competitors Buyers
•Internet expands market size, but •Internet shifts greater power
creates new substitution threats to end consumers

•Internet tends to increase the

bargaining power of suppliers Bargaining Power of Suppliers

64
Strategy Implementation and Control

Implementation is the final step in the

strategic management process and it is
how strategy put into action.

Some people argue that strategy

implementation is the most difficult and
important part of strategic management.
 Tools for Putting Strategy into Action
Environment Organization
LEADERSHIP
• Use persuasion
• Motivate employees
• Shape culture/values

STRUCTURAL DESIGN HUMAN RESOURCES

• Design organization chart • Recruit/select employees
• Create teams • Manage Performance
Strategy • Determine centralization transfers/promotions/training
• Arrange facilities, task • Direct layoffs/recalls
design

INFORMATION AND
CONTROL SYSTEMS
• Revise pay, reward system
• Change budget allocations
• Implement information
systems
• Apply rules and procedures
 Benefits of strategic
management
1. Choice of strategy
2. Improves employees efficiency
3. SWOT Analysis
4. Aids in planning
5. Organizing resource
6. Helps in evaluation
7. Facilitate communication and coordination
8. Helps to face competition
 Risk/ limitation of strategic
management
Limitation of assumption
Problems of analyzing environment
Unrealistic mission & objectives
Problem of setting objectives
Problem of implementation
Problem of resistance
Problem of internal politics
Business environments
Business Environment consists of all those
forces both internal and external that affect the
working of a business.
It refers to the conditions, forces, events and
situations within which business enterprises
have to operate
Business Environment is the total of all things
external to firms and individuals, which affect
their organization and operations
Business and its environment are
closely related and the effectiveness of
interaction of the two determines the
success or failure of a business
Business decisions are influenced by two
sets of factors.
The internal factors can be managed and
control by the business while External
factors are as residing outside the business
& are not controllable.
The environmental exposes two challenges
to the organization:
i) The challenge to combat environmental
threat.
ii) To exploit the business opportunities
Environmental analysis is the first step in SM.
strategists monitor the economic
governmental, legal, market, technological,
geographical and social settings to determine
opportunities and threats to the business
“Environment of the business means the
aggregate of all conditions, events and
influences that surround and affect it”.

FEATURES OF ENVIRONMENT
1.its dynamic in nature
2.It has direct and indirect impact
3.It has two types of factors
4.It is not separatable from business
5.Impact on business decision
6.It regulates the scope of business
 COMPONENTS / PARTS OF
BUSINESS ENVIRONMENT
i) Internal Environment
ii) External environment
Internal Environment:
Internal environmental factors are these,
which resides within company premises
and are easily adjustable and controllable
i) management philosophy
ii) Mission and Objectives
 Plan & policies
 Human resources
 Physical resources
 Financial resources
 Labour relations
 Image of the company

2. External Environment :
External environment means those factors or
forces which resides outside the business, but
has its influence over the functioning of the
business.
 i) Micro environment
ii) Macro Environment.

i) Micro Environment :
Micro environmental factors mean those
which are very close and direct effect factors
e.g
suppliers, competitor’s customers,
marketing intermediaries and the public at
large
2. Macro environment: are for away from
the company but it gives indirect effects on
companies functioning.
The micro environment operates in a large
macro environment forces that shapes
opportunities and pose threats to the
company.
It includes demographic, economic, natural,
social and technological environmental
forces or factors
 ENVIRONMENT SCANNING

Environmental analysis enables a business

firm to identity its strengths weaknesses,
opportunities and threats.
The proper evaluation or analysis of
environment helps a firm to formulate
effective strategies in various areas of its
functions
 Importance of Environmental
Scanning
 Identification of SWOT analysis to the orgn
 Effective utilization of resources
 Useful in strategy formulation
 Survival and growth of business
 Constant monitoring of resources
 Corporate image
 Motivation to employees
 Prediction of future
 Write notes on Techniques of
Environmental scanning:
 ETOP
 SWOT
 TOWS MATRIX
 PESTEL ANALYSIS
 BCG MODEL
 MICHAEL PORTER 5 FORCES
 VALUE CHAIN ANALYSIS
 VRIO Frame Work
 Grant’s Approach
 THE END

Any clarification?

HAVE A NICE DAY!!! 