Management Accounting Business Strategy

What is Strategy ?
Strategic Planning Model
Analyze the Organization s resources Identify Strengths and weaknesses

Identify the Organization s Current vision mission, Objectives, and Strategies

Reassess and develop the Organization s mission and objectives

Formulate strategies

Implement strategies

Evaluate results

Analyze the environment

Identify Opportunities And threats

Strategic Planning Model

Vision
Analyze the Organization s resources Identify the Organization s Current vision mission, Objectives, and Strategies Identify Strengths and weaknesses Reassess and develop the Organization s mission and objectives

Formulate strategies

Implement strategies

Evaluate results

Analyze the environment

Identify Opportunities And threats

What do we Want to Become ?

Intellectual thoughts about future

Vision

General Motors vision is to be the world leader in transportation products and related service
3

Strategic Planning Model

Vision
What do we Want to Become ? Where the organization aspires to be in future? One the organization strives to achieve in long term Intellectual thoughts about future It is the wish to become leader in some field It is wish to contribute to some major cause General Motors vision is to be the world leader in transportation products and related service Vision

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

Strategic Planning Model

Vision
How the organization wants to be perceived in the future what success looks like An expression of the desired end state Challenges everyone to reach for something significant inspires a compelling future Provides a long-term focus for the entire longorganization
Dell s vision is to create a company culture where environmental excellence is second nature
5

Vision

Strategic Planning Model

Components 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 what success and the future will be like

Recognition of service to stakeholders

Owners/creditors Employees Customers
6

Strategic Planning Model

Vision 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 Informative Innovative Leading Logical Major Nimble Pioneering Protected Organized Over-Arching Quick Ready Responsive Savvy Simple 7 Solid Solvent Stable State of the Art Strong Streamlined Sufficient Strategic Sustainable Timely Value-added Vigilant Visionary World-class

Strategic Planning Model

Vision
Tyson s vision is to be the world s first choice for protein solutions while maximizing shareholder value (Good statement, unless Tyson provides non protein products) General Motors vision is to be the world leader in transportation products and related service (Good statement) Pepsi Co s responsibility is to continually improve all aspects of the world in which we operate- environment, social, economic creating a better tomorrow than today (Too vague, it should reveal beverage and fast food) Samsonite s vision is to provide innovative solutions for the travelling world (Need to be more specific, may relate with product benefits) ICMAP s vision is to be the preference in value business (__________________) optimism for the
8

Strategic Planning Model

Importance of Vision

Profit & vision are necessary to effectively motivate a workforce

Shared Vision - Creates commonality of interests Reduce daily monotony Provides opportunity & challenge
9

Strategic Planning Model

Mission
Analyze the Organization s resources Identify the Organization s Current vision mission, Objectives, and Strategies Identify Strengths and weaknesses Reassess and develop the Organization s mission and objectives

Formulate strategies

Implement strategies

Evaluate results

Analyze the environment

Identify Opportunities And threats

What is our Business ?

Reason for existence

Mission

FedEx is committed to our people Service Profit Philosophy. We will produce outstanding financial returns by providing totally reliable, competitively superior, global, air-ground transportation of high-priority goods and documents that require rapid, time-certain delivery
10

Strategic Planning Model

Mission
What is our Business ? What is our mission ? Statement for purpose that distinguishes one organization from other similar organization Basis for establishing objectives and formulation of policies Creed statement, statement of purpose, statement of beliefs, statement of philosophy Reason for your existence Reveals whom organization wants to serve Mission

FedEx is committed to our people Service Profit Philosophy. We will produce outstanding financial returns by providing totally reliable, competitively superior, global, air-ground transportation of high-priority goods and documents that require rapid, time-certain delivery
11

Strategic Planning Model

Mission
Captures the essence of why the organization exists Who we are, what we do Explains the basic needs that you fulfill Expresses the core values of the organization Should be brief and to the point Easy to understand If possible, try to convey the unique nature of your organization and the role it plays that differentiates it from others

Mission

FedEx is committed to our people Service Profit Philosophy. We will produce outstanding financial returns by providing totally reliable, competitively superior, global, air-ground transportation of high-priority goods and documents that require rapid, time-certain delivery
12

Strategic Planning Model

Mission 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 committed to growth and financial soundness Philosophy what priorities of the firm the beliefs, values, aspiration, and ethical

Self concept what is the firms distinctive competence or major competitive advantage Concern for public image is the firm responsive to social, community, and environmental concerns? Concern for employees are employees a valueable asset for the firm
13

Strategic Planning Model

Mission Statement Components
Products Services

Customers

Markets

Technology Employees Mission Elements Survival Growth Profit Self-Concept Philosophy

14

Public Image

Strategic Planning Model

Characteristic of mission statement Broad in scope Les than 250 word Inspiring Utility of firms products CSR Environment Reconciliatory Enduring Include nine components
15

Strategic Planning Model

Characteristic of mission statement

Feasible alternatives

Stakeholders

Motivational guidelines

Customers

Social policy

Declaration of organizational attitude

Customer Orientation

length

Future outlook

Anticipation of customers

16

Strategic Planning Model

Mission
Pepsi : We aspire to make PepsiCo the world s (3) premier product company, focused on convenient food and beverages (2). We seek to produce healthy financial rewards for investor (5) as we provide opportunities for growth and enrichment to our employees (9), our business partners and communities (8) in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity (6) (customers. Technology, self concept is missin) Ben & Jerry s mission is to make, distribute and sell the finest quality all-natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. To operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders, and creating career opportunities and financial rewards for our employees. To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community local, national and international. 17

Strategic Planning Model

Good and Bad - Mission
NASA To Explore the Universe and Search for Life and to Inspire the Next Generation of Explorers

Does a good job of expressing the core values of the organization. Also conveys unique qualities about the organization.

Walt Disney

To Make People Happy

Too vague and and unclear. Need more descriptive information about what makes the organization special.
18

Strategic Planning Model

Good and Bad - Mission
COMPONENTS Concern for Survival, Growth, Profitability

Organization

Customers

Products Services

Markets

Technology

PepsiCo Ben & Jerry's

Yes No

No Yes

No Yes

Yes Yes

No No

19

Strategic Planning Model

Good and Bad - Mission
COMPONENTS

Organization

Philosophy

SelfConcept

Concern for Public Image

Concern for Employees

PepsiCo Ben & Jerry's

Yes No

No Yes

No Yes

No Yes

20

Strategic Planning Model

Importance of mission

Unanimity of Purpose Resource Allocation Mission Organizational Climate Focal point for work structure
21

Strategic Planning Model

Process of developing vision and mission statements
Involvement of managers Read literature Develop statements through different individuals Develop single statement Discuses , modify and finalize Communicate
22

Strategic Planning Model

Vision vs Mission
What do we Want to Become ? What is our Business ?

Ultimate destination

Means to destination

The vision is more broad and future oriented the goal on the horizon

The mission is more focused how you will get to the horizon

23

Strategic Planning Model

Benefits 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
24

Strategic Planning Model

Importance (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

Research results are mixed, however, firms with formal statements - 2x average return on shareholders equity Positive relationship to company performance 30% high return on certain financial measures

25

Questions ?

26

Thank You

27