Strategic Management

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Defining Business
The important first step in the process of formulating a mission is to come up with a definition of the organizations business. The definition must be customer oriented. It should answer the following questions:

Who Click to editsatisfied? Identify the customer group. is being Master subtitle style What is being Satisfied? Identify customer needs. How are the needs satisfied? Identify Distinctive competencies.

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Defining Business
Custom er Groups Who is being Satisfied?

Click to edit Master subtitle style What is ss How are being the satisfie Definiti needs d? on satisfied ? Custom Distinctive er Competenci needs es 4/21/12

Busine

Mission Statement

It is reason or purpose for which the organization exists. It defines what the company is providing to the society It tries to set apart the company from other firms It must include the firms value and philosophy It tells what company is and what is wants to become It must promote a sense of shared expectations in employees.
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It should be customer oriented and not product oriented 4/21/12

Mission Statement
Kodak

To provide our customers with solution they need to capture, store, process, output and communicate images any where, anytime Ford Motor Company is passionately committed to providing personal mobility for people around Click to edit We anticipate the world Master subtitle styleconsumer need and deliver outstanding products and services that improve peoples lives.

Ford

IBM Our business is providing a means for information processing and storage for our 4/21/12 customers.

Vision
The vision of a company lays out some desired future state. It articulates what the company would like to achieve. A good vision statement must

Challenge the company with ambitious but attainable future state. Must help to motivate employees at all levels.
Click to edit Master subtitle style Must drive the mission and strategies of the company.

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Vision
Ford

To become the worlds leading consumer company for automotive products and services (at Nokia) If it can go mobile, it will.
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Nokia

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Values
The values of a company state how managers and employees should conduct themselves, how they should do business and what kind of organization to build. The values of a company drive the behavior of its employees. It is also called organization culture. It expressed in terms of
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Values Norms Standards

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Values of an Organization

The employees will be compensated based on their productivity only. They employees must be confident that they are doing the job properly Employees have a right to be treated fairly and must believe they will be
Click to edit Master subtitle style Employees must have an opportunity to express when they believe they are being treated unfairly.

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Objectives (Major Goals)

An objective is a precise and measurable desired future state that the company attempts to realize. It is a statement which specifies with precision as to what must be done to realize the mission. Objectives are also called major goals. The four main characteristics of the objectives are
1.

They are precise and measurable They address crucial issues They are challenging but realistic They are time bound
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2.

3.

4.

A well constructed objective allows measurement of a managers performance.

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Objectives (Major Goals)

Areas in which objectives may be set. Contribution to employees Contribution to society Market leadership Technological leadership Click to edit Master subtitle style Survival There is a tendency to overemphasize current profitability at the cost of profit growth. This can only be short term action. In the long term profit growth is more important.

Profitability Efficiency (less cost) Growth Shareholder wealth Utilization of Resources Reputation

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Hierarchy (Levels) of Strategies

Corporate Strategy describes companys overall direction

Deals with stability, growth and restructuring

Business Strategy Occurs at business unit level

Deals with competitive positioning, product Click to edit Master subtitle style differentiation, strategic alliances

Functional Strategy approach taken by functional areas

Maximizing resource productivity. Developing specific skills and competencies, innovation

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Strategy Development for a Business School

Vision To be the ranked as the best business school in India

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