BUSINESS STRATEGY &

DEFINING IT
Strategy
• A Company’s strategy is its action plan for outperforming its competitors and
achieving superior profitability.
• A managerial commitment to an integrated array of choices about not to
compete.
 Strategy includes choices about
• How to attract and please customers?
• How to compete against rivals?
• How to position the company in the market place?
• How best to respond to changing economic and market conditions?
• How to capitalize on attractive opportunities to grow business
• How to achieve the company’s performance targets?
STRATEGY
 Strategy is unified, comprehensive & integrated Plan that relates the Strategic
advantages of the firm to the Challenges of the environment and is designed
to ensure that basic objectives of the enterprise are achieved through proper
implementation process.
 Michael E Porter(1996) : “…developing and communicating the company’s
unique position, making trade-offs, and forging fit among activities.
 Igor Ansoff(1965) : “The common thread among the organization's activities
and product-markets…that defines the essential nature of business that the
organization was or planned to be in future.
 Alfred D Chandler(1962) : “The determination of basic long-term goals and
the adoption of courses of the courses of action and the allocation of
resources necessary for carrying out these goals”
 Levels of Strategy
 Corporate Level: This is a plan of action covering the various functions that are performed
by different SBU’s. This plan deals with the objective of the company, allocation of
resources and coordination of SBUs for optimal performance.
 SBU or Business Level: It is a comprehensive plan providing objectives for SBUs,
allocation of resources among functional areas and coordination among them for making
best contribution to the achievement of the corporate level objectives.
 Functional Strategy: this deals with a relatively restricted plan, providing objectives for a
specific function, allocation of resources among different operations within that functional
area and coordination between them for optimal contribution to the achievement of SBU and
corporate level objectives.
 Bajaj Electrical has five major SBUs: Home appliances, Fans, Lighting, Luminaries and
Engineering Projects.
 The engineering projects division recently commissioned the smart lighting project in Jaipur.
 Luminaries division caters to Smart lighting solutions, sensor based, IOT driven
ELEMENTS IN THE STRATEGIC MGT.
PROCESS
 Establishing the hierarchy of  Formulation of strategies
strategic intent 1. Performing environmental
1. Creating and communicating a appraisal
vision 2. Doing organizational appraisal
2. Designing a mission statement 3. Formulating corporate level
strategies
3. Defining the business
4. Formulating business level
4. Adopting the business model strategies
5. Setting Objectives 5. Undertaking strategic analysis
6. Exercising strategic choice
7. Preparing strategic plan
ELEMENTS IN THE STRATEGIC MGT.
PROCESS
 Implementation of strategies  Performing strategic evaluation
and control
1. Activating strategies
1. Performing strategic evaluation
2. Designing the structure, systems
and processes 2. Exercising strategic control
3. Managing behavioral 3. Reformulating strategies
implementation
4. Managing functional
implementation
5. Operationalizing strategies
 STRATEGIC INTENT
Strategic intent envisions a desired leadership position and establishes the
criterion the organization will use to chart its progress.
Strategic intent is expressed in terms of vision, mission and strategic goals
leading to the strategies the organization plans to adopt.
 VISION
What the firm ultimately wants to be is its vision.
It represents the description of what a firm wants to be in the future.
It refers to the mental perception of an organization.
 MISSION
The essential purpose of the organization, concerning particularly why it is in
existence, the nature of its business it is in and the customers it seeks to satisfy.
The mission concentrates on the present and defines the customers critical
processes as well as the desired level of performance.
Difference between Vision and Mission
MISSION VISION
 A Mission statement talks about HOW you will  A Vision statement outlines WHERE you want to
get to where you want to be. Defines the be. Communicates both the purpose and values
purpose and primary objectives related to of your business
your customer needs and team values.
 It answers the question, “What do we do?  It answers the question, “Where do we aim to
What makes us different?” be?”
 A mission statement talks about the present  A vision statement talks about firm’s future
leading to its future  It lists where you see yourself some years from
 It lists the broad goals for which the now. It inspires you to give your best. It shapes
organization is formed. Its prime function is your understanding of why you are working
internal; to define the key measure or here.
measures of the organization's success and its
prime audience is the leadership, team and  Where do we want to be going forward? When
stockholders. do we want to reach that stage? How do we
 What do we do today? For whom do we do it? want to do it?
What is the benefit? In other words, Why we
do what we do? What, For Whom and Why?
 The vision statement outlines the worldview of
the organization and why it exists. It attracts
 people & not just employees but also customers
The mission statement guides the day-to-day
and vendors who believe in the vision of the
operations and decision-making of the
organization.
organization. The mission statement helps
members of the organization get on the same
page on what they should do and how they
Tata Steel – Vision, Mission and Values
https://www.tatasteel.com/corporate/our-organisation/vision-mission-values/

 VISION
We aspire to be the global steel industry benchmark for Value Creation
and Corporate Citizenship.
 MISSION
Consistent with the vision and values of the founder Jamsetji Tata, Tata
Steel strives to strengthen India’s industrial base through effective
utilization of staff and materials. The means envisaged to achieve this
are cutting edge technology and high productivity, consistent with
modern management practices.
Tata Steel recognizes that while honesty and integrity are essential
ingredients of a strong and stable enterprise, profitability provides the
main spark for economic activity.

Overall, the Company seeks to scale the heights of excellence in all it

does in an atmosphere free from fear, and thereby reaffirms its faith in
democratic values.
Tata Steel – Vision, Mission and Values
https://www.tatasteel.com/corporate/
our-organisation/vision-mission-values/
 VALUES
Integrity - We will be fair, honest, transparent and ethical in our conduct;
everything we do must stand the test of public scrutiny.
Excellence - We will be passionate about achieving the highest standards of quality,
always promoting meritocracy.
Unity - We will invest in our people and partners, enable continuous learning, and
build caring and collaborative relationships based on trust and mutual respect.
Responsibility - We will integrate environmental and social principles in our
businesses, ensuring that what comes from the people goes back to the people
many times over.
Pioneering - We will be bold and agile, courageously taking on challenges, using
deep customer insight to develop innovative solutions.
BUSINESS MODEL

 How does the organization make money?

 Business models have an intricate relationship with the strategy of the
organization.
 Strategies result in choices and a business model utilizes the choices made.
 Companies in the same industry compete with each other utilizing different
models as a matter of choice.

 Jio, Airtel, Vodafone are all in the same industry, but their strategies……
GOALS & OBJECTIVES

 Goals denote what an organization hopes to accomplish in a future period of

time. In this way they represent the future state of outcome of efforts put in
now.
 Objectives are the ends that shall make the firm reach the goals. They are
concrete and specific.
 Objectives have to be set in all functional areas which are of importance to
the firm.
 Usually these objectives are set in vital areas of market standi ng,
innovation, productivity, financial resources, profitability, worker
performance and public responsibility.
Levels at which Strategy Operates

LEVELS OF MANAGEMENT LEVELS OF STRATEGY

Corporate
CORPORATE Office CORPORATE-LEVEL

SBU SBU SBU SBU BUSINESS-LEVEL

A B C

FUNCTIONAL

Finance Marketing Operations HRM Information

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© Azhar Kazmi & Adela Kazmi, 2015

Strategic Decision-Making

 Objectives to be achieved are determined;

 Alternative ways of achieving the objectives are
identified;
 Each alternative is evaluated in terms of its objective-
achieving ability; and
 The best alternative is chosen.

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© Azhar Kazmi & Adela Kazmi, 2015

 Problems in Strategic Decision Making

 Problem related to objective-setting.

 The identification of alternatives.
 The objective-achieving ability of each
alternative.
 Choosing the best alternative is a formidable
task.
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Issues in Strategic Decision-Making

 Criteria for decision-making

 Rationality in decision-making
 Creativity in decision-making
 Variability in decision-making
 Person-related factors in decision-making
 Individual versus group decision-making.
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Comprehensive Model of Strategic
Management

Strategic Intent Strategy Formulation Strategy Strategic

Implementation Evaluation
Vision Environmental Organisational
Mission Appraisal Appraisal Project
Business definition SWOT Analysis Procedural Strategic evaluation
Business model Corporate-level Strategies Resource allocation and control
Objectives Business-level Strategies Structural
Strategic analysis and choice Behavioural
Strategic plan Functional &
Operational
Implementation

Strategic control

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