Strategic intent

Strategic intent Strategic Intent is the leveraging of a firm’s internal resources, capabilities & core competencies to accomplish the firm’s vision, mission & objectives in a competitive environment It is all about winning competitive battles & gaining leadership position by putting organizational resources to best use Strategic Intent is said to exist when all employees & levels of a firm are committed to the pursuit of a specific but significant performance target

Hierarchy of strategic intent The hierarchy of strategic intent includes the following elements------ A broad Vision of what the organization should be The organization’s Mission The strategic objectives & specific goals to be pursued relentlessly

VISION It is defined as a description of something (an organization, a corporate culture, a business, a technology, an activity) in the future It is considered as a mental perception of the kind of environment an individual, or an organization aspires to create within a broad time horizon & the underlying conditions for the actualization of this perception

Benefits of having a vision Good visions are inspiring Vision represents a jump ahead so that the company knows what it is to be Good visions help in the creation of a common identity & a shared sense of purpose Good visions foster long-term thinking

Example of vision Whirlpool: Grow with new opportunities & be the leader in an ever changing global market. We will be driven by our commitment to continuous quality improvement & to exceeding all our customers’ expectations. We will gain competitive advantage through this & by building on existing strengths & developing new competencies. We will be market driven, efficient & profitable. Our success will make whirlpool a company that worldwide customers, employees & other stakeholders can depend on

Mission Mission is an enduring statement of purpose that distinguishes one business from other similar firms Mission is a statement which defines the role that an organization plays in the society It identifies the scope of its operations in product & market terms

Characteristics of mission It should be feasible It should be precise It should be clear It should be motivating It should be distinctive It should indicate major components of strategy It should indicate how objectives are to be accomplished

Example of mission statement Ranbaxy Laboratories: To become a research based international pharmaceutical company ONGC: To stimulate, continue & accelerate efforts to develop & maximize the contribution of the energy sector to the economy of the country

Components of a mission statement Customers Products or services Markets Technology Concern for survival, growth & profitability Philosophy Concern for public image Concern for employees

Mission, Vision & Objectives A company’s mission is a statement of the basic purpose or reason for its existence its values (role to stakeholders - customers, employees, society, etc.). The vision goes beyond the mission statement clarifies the long-term direction of the company (where the company is going) reflects management’s aspirations for the company

Goals & objectives Goals denote what an organization hopes to accomplish in a future period of time Objectives are the ends that state specifically how the goals shall be achieved Objectives are concrete & specific in contrast to goals that are generalized While goals may be qualitative, objectives tend to be mainly quantitative Goals are broadly stated aims & objectives are specifically stated aims

Mission, Vision & Objectives Objectives are yardsticks for tracking a company’s performance or end result. Financial performance objectives (e.g., ROA, ROI, ROE, Dividend growth, Stock price, etc.). Strategic performance objectives (e.g., market share, growth, innovation leader, customer service, community & environmental responsibility, etc.)

Examples of Mission & Vision Southwest Airlines: Mission: To provide high quality service at a lower price in the airline industry. Vision: Opening air travel to a wider group of leisure travelers while infusing the organization with a sense of fun. Apple Computer: Mission: To bring the best personal computing products and support to consumers around the world. Vision: One person, one computer.

Financial & Strategic Objectives Alcan Aluminum Financial: To outperform the average return on equity of the S&P’s industrial stock index. Strategic: To be lowest-cost producer of aluminum. GE Financial: To achieve an average of 10 inventory turns and a corporate operation profits margin of 16% by 1998. Strategic: To become most competitive enterprise in the world by being #1 or #2 in market share in every business the company is in.

THANK YOU