Strategic Intent and Mission. October 10, 2007

Strategic Intent and Mission Intent: How firm would like to use Resources Capabilities Core competencies Mission: Determine the firm’s external focus on Products Markets

Strategic Intent and Mission The primary guides to strategic management are formal statements of strategic intent and mission. Strategic intent is internally focused, defining how the firm uses its resources, capabilities, and core competencies. Strategic mission is externally focused, defining what will be to produced and marketed, utilizing its internal core competencies.

Strategy Formulation The design of an approach to achieve the firm’s mission. Takes place at: Corporate-Level Business-Level

Corporate-Level Strategy The corporation’s overall plan concerning the: Number of businesses the corporation holds. Variety of markets or industries it serves. Distribution of resources among those businesses. This diversification strategy may be analyzed in terms of: Portfolio mix Type of diversification Process of diversification

Portfolio Analysis The basic idea is to classify the businesses of a diversified company within a single framework. Two of the most widely applied include: The McKinsey-General Electric Portfolio Analysis Matrix The Boston Consulting Group’s Growth Share Matrix

The McKinsey-General Electric Portfolio Analysis Matrix Business-Unit Position Low Medium High 1) Harvest 2) 3) 4) 5) Hold 6) 7) 8) 9) Build Low Industry Attractiveness Medium High

The Boston Consulting Group’s Growth Share Matrix Relative Market Share Earnings: high stable, growing Cash Flow: neutral Strategy: invest for growth STAR Earnings: low, unstable, growing Cash Flow: negative Strategy: analyze to determine whether business can be grown into a star, or will degenerate into a dog ? Earnings: high, stable Cash Flow: high stable Strategy: milk COW Earnings: low, unstable Cash Flow: neutral or negative Strategy: divest DOG Annual Real Rate of Market Growth

Diversification Strategy Type of Diversification Concentration strategy Vertical integration strategy Concentric diversification strategy Conglomerate diversification Process of Diversification Acquisition and restructuring strategies Acquisition Merger International strategy

Business-Level Strategy Deals with how to compete in each business area or market segment. Firms have two basic choices: Cost leadership strategy Differentiation strategy

Strategy Implementation Organization Controls Corporate Entrepreneurship and Innovation Human Resource Strategies Strategic Leadership Cooperative Strategies 3

Strategic Outcomes Company leaders should periodically assess whether the outcomes meet expectations. A firm must first and foremost cater to the desires of its primary stakeholders. The firm should also consider the desires of other stakeholders affected by its performance. Some of the standard measures of strategic success includes: Profits Growth of sales/market share Growth of corporate assets Reduced competitive threats Innovations