1. Stage of Formulation

2. STRATEGIC MANAGEMENT Stake holders External –Customers, Suppliers, Government, Society, banks, creditors, trade unions, NGOs, local communities. Internal- Shareholders, employees, Owners Functional areas Marketing, Finance, operations, HR, systems

3. STRATEGIC MANAGEMENT Type of Firm Growing, Stagnant, Declining Level of employees Strategic level, Management control level, operational level

4. Major Components of the Strategic Plan / Down to Action Mission Vision Goals Objectives Measures Why we exist What we want to be Indicators and Monitors of success Desired level of performance and timelines Planned Actions to Achieve Objectives O1 O2 AI1 AI2 AI3 M1M2M3 T1 Specific outcomes expressed in measurable terms (NOT activities) Strategic Plan Action Plans Evaluate Progress Targets Action Plan What we must achieve to be successful

5. Vision statement answers the question: “What do we want to become in future?” Vision

6. Mission Statements Mission statement answers the question: “What is our business today?” Or What we do today?

7. Mission Statements Mission Statement: – Enduring statement of purpose – Distinguishes one organization from another in similar enterprises – Declaration of an organization’s “reason for being”

8. Importance of Mission Unanimity of purpose within the organization Basis for allocating resources Establish organizational climate Focal point for direction Translate objectives into work structure Cost, time and performance parameters assessed and controlled

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

10. Apollo Hospitals Vision- Apollo's vision for the next phase of development is to 'Touch a Billion Lives'. Mission-"Our mission is to bring healthcare of International standards within the reach of every individual. We are committed to the achievement and maintenance of excellence in education, research and healthcare for the benefit of humanity"

11. TVS Motor Company Mission We are committed to being a highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products under the TVS brand, for customers predominantly in Asian markets and to provide fulfilment and prosperity for employees, dealers and suppliers. Vision Statement TVS Motor will be responsive to customer requirements consonant with its core competence and profitability. TVS Motor will provide total customer satisfaction by giving the customer the right product, at the right price, at the right time.

12. Examples – Good and Bad Mission Statements To Make People Happy To Explore the Universe and Search for Life and to Inspire the Next Generation of Explorers NASA Walt Disney Does a good job of expressing the core values of the organization. Also conveys unique qualities about the organization. Too vague and and unclear. Need more descriptive information about what makes the organization special.

13. Components of Mission Mission statements vary in… Length Content Format Specificity Must include the 9 elements, as the mission statement is the most public and visible part of the strategic- management process.

14. 1.Customers 2.Products or services 3.Markets 4.Technology 5.Survival, growth, and profitability 6.Philosophy 7.Self-concept 8.Concern for public image 9.Concern for employees Mission Components

15. Components of Mission Customers:  “Who are the firm’s customers?” Products or services:  “What are the firm's major products or services?” Markets:  “Geographically, where does the firm compete?” Technology:  “Is the firm technologically current?” Concern for survival, growth, and profitability:  “Is the firm committed to growth and financial soundness?”

16. Components of Mission Philosophy:  “What are the basic beliefs, values, aspirations, and ethical priorities of the firm?” Self-concept:  “ What is the firm’s 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 valuable asset of the firm?”

17. Importance of Vision & Mission A research results reveals, firms with formal mission statements have 2 times average return on shareholder’s equity Positive relationship to organizational performance 30% higher return on certain financial measures

18. PepsiCo Mission Statement PepsiCo’s mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls, and wise investment resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

19. Ben & Jerry’s Mission Statement 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.

20. COMPONENTS OrganizationCustomers Products ServicesMarkets Concern for Survival, Growth, ProfitabilityTechnology PepsiCoYesNo YesNo Ben & Jerry'sNoYes No Evaluation Matrix of Mission Statements

21. COMPONENTS OrganizationPhilosophy Self- Concept Concern for Public Image Concern for Employees PepsiCoYesNo Ben & Jerry'sNoYes

22. Vision How the organization wants to be perceived in the How the organization wants to be perceived in the future – what success looks like future – what success looks like An expression of the desired end state An expression of the desired end state Challenges everyone to reach for something Challenges everyone to reach for something significant – inspires a compelling future significant – inspires a compelling future Provides a long-term focus for the entire Provides a long-term focus for the entire organization organization

23. Examples of Vision Descriptors Adept Aggressive Agile Aligned Assertive Available Best-in-class Challenging Clear Competent Complex Compliant Conservative Coordinated Critical Direct Equal Disciplined Effective Efficient Enduring Expanding Expert Fast Fast-paced Financially-sound Focused Growth Healthy Improving Incentivized Solid Solvent Stable State of the Art Strong Streamlined Sufficient Strategic Sustainable Timely Value-added Vigilant Visionary World-class Informative Innovative Leading Logical Major Nimble Pioneering Protected Organized Over-Arching Quick Ready Responsive Savvy Simple

24. Goals Describes a future end-state – desired outcome Describes a future end-state – desired outcome that is supportive of the mission and vision. that is supportive of the mission and vision. Shapes the way ahead in actionable terms. Shapes the way ahead in actionable terms. Best applied where there are clear choices about Best applied where there are clear choices about the future. the future. Puts strategic focus into the organization – specific Puts strategic focus into the organization – specific ownership of the goal should be assigned to ownership of the goal should be assigned to someone within the organization. someone within the organization. May not work well where things are changing fast May not work well where things are changing fast – goals tend to be long-term for environments that – goals tend to be long-term for environments that have limited choices about the future. have limited choices about the future.

25. Developing Goals Cascade from the top of the Strategic Plan – Cascade from the top of the Strategic Plan – Mission, Vision Mission, Vision Look at your strategic analysis – SWOT, Look at your strategic analysis – SWOT, Environmental Scan, Past Performance, Gaps.. Environmental Scan, Past Performance, Gaps.. Limit to a critical few – such as five to eight goals. Limit to a critical few – such as five to eight goals. Broad participation in the development of goals: Broad participation in the development of goals: Consensus from above – buy-in at the execution Consensus from above – buy-in at the execution level. level. Should drive higher levels of performance and Should drive higher levels of performance and close a critical performance gap. close a critical performance gap.

26. Examples of Goals Reorganize the entire organization for better responsiveness to customers We will partner with other businesses, industry leaders, and government agencies in order to better meet the needs of stakeholders across the entire value stream. Manage our resources with fiscal responsibility and efficiency through a single comprehensive process that is aligned to our strategic plan. Improve the quality and accuracy of service support information provided to our internal customers. Establish a means by which our decision making process is market and customer focus. Maintain and enhance the physical conditions of our public facilities. Establish the means by which our operations can achieve cost efficiency

27. Goals and Objectives Objectives and goals: Goals denotes what an organization hopes to accomplish in a future period of time. Goals are qualitative. Objectives are the ends that state specifically how the goals shall be achieved. Objectives are quantitative

28. Examples of Goals and objectives: 1.Goal - Profits Objectives-Return on investments, return on shareholders capital, net sales 2. Goal – Growth Objectives- Output, sales turnover, investments. 3. Goal- Market leader Objectives- Increase in sales volume, improving customer services, reduction in marketing cost, new product development. Goals and Objectives

29. Objectives Relevant - directly supports the goal Relevant - directly supports the goal Compels the organization into action Compels the organization into action Specific enough so we can quantify and measure the results Specific enough so we can quantify and measure the results Simple and easy to understand Simple and easy to understand Realistic and attainable Realistic and attainable Conveys responsibility and ownership Conveys responsibility and ownership Acceptable to those who must execute Acceptable to those who must execute May need several objectives to meet a goal May need several objectives to meet a goal

30. Goals vs. Objectives GOALSOBJECTIVES Very short statement, few words Longer statement, more descriptive Broad in scopeNarrow in scope Directly relates to the Mission Statement Indirectly relates to the Mission Statement Covers long time period (such as 10 years) Covers short time period (such 1 year budget cycle)

31. Examples of Objectives Develop a customer intelligence database system to capture and analyze patterns in purchasing behavior across our product line. Launch at least three value stream pilot projects to kick-off our transformation to a leaner organization. Centralize the procurement process for improvements in enterprise-wide purchasing power. Consolidate payable processing through a P-Card System over the next two years. Monitor and address employee morale issues through an annual employee satisfaction survey across all business functions.

32. What are Action Plans? The Action Plan identifies the specific steps that will be taken to achieve the initiatives and strategic objectives. Each Initiative has a supporting Action Plan(s) attached to it Action Plans are geared toward operations, procedures, and processes They describe who does what, when it will be completed, and how the organization knows when steps are completed Like Initiatives, Action Plans require the monitoring of progress on Objectives, for which measures are needed

33. Creation of Action Plans 1.Assign responsibility to the team- for the successful completion of the Action Plan. Who is responsible? What are the roles and responsibilities? 2.Establish a time frame for the completion of each steps. 3.Establish a list of documents/ documents to carry out the work- Questionnaires, dairies (digital), reports. 4.Assign location to carry out the work. 5.Detail all required steps to achieve the Initiative that the Action Plan is supporting. 6.Define the expected results and milestones of the action plan. brief status report on each step 7.Provide a brief status report on each step, whether completed or not. What communication process will we follow? How well are we doing in executing our action plan? 8.Correct and revise the action plan if the execution is not feasible.

34. Quantify from Action Level Up in terms of Measurements Measure your milestones – short-term outcomes at Measure your milestones – short-term outcomes at the Action Item level. the Action Item level. Measure the outcomes of your objectives. Measure the outcomes of your objectives. Try to keep your measures one per objective. Try to keep your measures one per objective. May want to include lead and lag measures to May want to include lead and lag measures to depict cause-effect relationships if you are depict cause-effect relationships if you are uncertain about driving (leading) the desired uncertain about driving (leading) the desired outcome. outcome. Establish measures using a template to capture Establish measures using a template to capture critical data elements critical data elements

35. Integrity – Complete; useful; inclusive of several types of measure; designed to measure the most important activities of the organization Reliable: Consistent Accurate - Correct Timely – Available when needed: designed to use and report data in a usable timeframe Confidential and Secure: Free from inappropriate release or attack Criteria for Good Measures

36. Examples of Measurements Lead Indicators Average time to initiate customer contact => shorter time should lead to better customer service Average response time to incident => below average response times should lead to increased effectiveness in dealing with incident Facilities that meet facility quality A1 rating => should lead to improved operational readiness for meeting customer needs

37. Examples of Measurements Lag Indicators Overall customer satisfaction rating => how well you are doing looking back Business Units met budgeted service hour targets => after the fact reporting of service delivery volume Number of category C safety accidents at construction sites => historical report of what has already taken place

38. Targets For each measurement, you should have at least one target Targets should stretch the organization to higher levels of performance Incremental improvements over current performance can be used to establish your targets Targets put focus on your strategy When you reach your targets, you have successfully executed your strategy

39. Examples of Targets Average Time to Process New Employee Setups in DB 65 days Year 2007 60 days Year 2008 55 days Year 2009 Utilization Rate for Rental Housing Units 90% for Year 2007 92% for Year 2008 95% for Year 2009 Toxic Sites meeting in-service compliance 55% for Year 2007 70% for Year 2008 95% for Year 2009 Personnel Fully Trained in Safety and Emergency 65% by 2 rd Quarter 75% by 3 th Quarter 90% by 4 th Quarter Open Positions Filled after 30 day promotion period 75 positions Sept 2007 100 positions Jan 2008 135 positions July 2008 % Reduction in Orders Filled Short in 1 st Cycle 50% by Year 2008 65% by Year 2009 85% by Year 2010

40. Task on targets Assign the sales target to sales team. Assign the recruitment target to HR team. Assign the finance department the target of cost cutting. Assign systems people to setup system network for newly recruited sales team.