Strategic framework

Components
Document is tentative and for discussion purposes only

Concept of Strategy
Key areas of the strategy framework

Mission
Why we exist

Values
Whats important to us

Vision
What we want to be

Strategy
Our game plan

Components the strategy pyramid

Strategic Plan

Mission Vision Goals Objectives Initiatives Measures AI1 O1 AI2 AI3

Why we exist What we want to be

Action Plans Evaluate Progress

What we must achieve to be successful O2

Specific outcomes expressed in measurable terms (NOT activities) Planned Actions to Achieve Objectives Indicators and Monitors of success Desired level of performance and timelines

M1 M2
T1 T1

M3
T1

Targets

Strategic plan components

Mission

Why we exist?

Vision
Goals

What we want to be?

What we must achieve to be successful?

The top the strategy pyramid is soft and directional. It serves as a guideline for all strategic planning Samples of some retail and non retail companies

STRATEGIC PLAN COMPONENTS vision, mission and goals for retail

Wal Mart 2009/10 Mission We save people money so they can live better. Carrefour 2002 Carrefour is committed to enabling as many people as possible to purchase consumer goods, in accordance with the principles of fair trade and sustainable development KMart (Sears) 2009 We are committed to improving the lives of our customers by providing quality services, products and solutions that earn their trust and build lifetime relationships."

Vision / Values

Worldwide leader in retail

Raise living standards in terms of quality of life, environmental protection, hygiene and food safety while respecting local culture Anticipate and promptly respond to the needs of our customers as well as conducting the longer work of building new stores and streamlining our logistics and step ahead of the curve Creating lasting relationships with ; 1) Customers 2. Attaining best in class productivity and efficiency 3. Building our brands 4. Reinventing the company continuously through technology and innovation 5. Reinforcing values

Goals (Usually multiple)

Reducing carbon in the life cycle of our products will often mean reducing energy use and costs

The Coca Cola Company

Mission
To Refresh the World in body, mind, and spirit. To Inspire Moments of Optimism through our brands and our actions. To Create Value and Make a Difference everywhere we engage.

Source: The Coca Cola company website Values

Leadership: The courage to shape a better future Passion: Committed in heart and mind

Vision & Goals

People: Being a great place to work where people are inspired to be the best they can be. Planet: Being a responsible global citizen that makes a difference. Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples desires and needs. Partners: Nurturing a winning network of partners and building mutual loyalty. Profit: Maximizing return to shareowners while being mindful of our overall responsibilities.

Integrity: Be real
Accountability: If it is to be, its up to me Collaboration: Leverage collective genius Innovation: Seek, imagine, create, delight

High impact points

Quality: What we do, we do well

1 animation

Hierarchy of objectives and strategy

Strategic Decision Makers

Ends (What is to be achieved?) Mission, including goals & philosophy Means (How is it to be achieved?) Board of Directors Corporate Managers Business Managers Functional Managers

Long-term objectives

Grand strategy

Annual objectives

Short-term strategies & policies

Note:

indicates a principal responsibility;

indicates a secondary responsibility

What is the strategic perspective?

What is Strategy?
(Porter, M.E. (1996), What is Strategy, Harvard Business Review, 74(12): 61-78.

Rivals can easily copy your improvement in quality and efficiency. But they shouldnt be able to copy your strategic positioning (What distinguishes your company from all the rest)

Strategy is the creation of a unique and valuable position, involving a different set of activities.

Strategy require you to make trade-offs in competing--to chose what not to do. Strategy involves creating fit among a companys activities.

Concept of Strategy
Differences between Operational Excellence and Strategy

high

Operational effectiveness means performing similar activities better than rivals perform them

Strategic positioning means performing different activities from rivals or performing similar activities in different ways

Non-price buyer value delivered

Growth

low high Relative cost position low

Performance = Operations + Strategy

Why is strategy required?

Business growth

Survival (Sustaining long term success)

Time

Impact

Goal Achievement (integration of short term and long term goals)

Profitability

Profits

Time Horizon

Time

Concept of Strategy
Sources of Superior Profitability

INDUSTRY
ATTRACTIVENESS

RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL

Which industries should we be in?

CORPORATE STRATEGY

How do we make money?

COMPETITIVE ADVANTAGE

How should we compete?

BUSINESS STRATEGY

Concept of Strategy
The Three Big Strategic Analysis Questions

Where are we now?

Desired position Effort Gap

Where do we want to go? - Products / Services those can be launched

How will we get there?

Make

- Buyer groups those could be

served

Activity options Buy

Current position Gap analysis will reveal the difference between position.

Growth lies in identifying opportunities in markets

Study of options will indicate least risk route to grow

End of discussion