1. STRTEGY FORMULATION

2. MISSION STATEMENT What a company wants to do now?
Foundation for priorities, strategies, plans and work assignments.
It is a statement of the purpose of a company, its reason for existence.
It provides the framework or context within which the companies strategies are formulated.

3. According to McGinis a Mission statement :
Should define what the organization is and what it aspires to be.
Should be flexible
Should distinguish a given organization from all others
Should serve as a framework for evaluating both current and prospective activities.
Should be stated in clear terms.

4. VISION STATEMENT
It is a short declaration of what organization of what organization aspires to be in future.
What organization would like to achieve in mid-term or long-term future.
Vision provokes interest and positive attitude among stake holders.
Should Generate enthusiasm for the future courses of action among members.
It should be clear and concise

5. GOALS
Goals are short terms milestones or benchmarks that organizations must achieve in order for longer objectives to be reached.
Goals should be definite, measurable, quantitative, challenging, realistic, consistent and prioritized.
Goals should be established at the corporate , divisional and functional levels.
Goals are specifically important in strategy implementation as they represent the basis for allocating resources

6. Strategic goals
Strategic goals are set at the top of an organization and directly support the mission statement.
They are related to the entire organization.

7. Tactical Goals
Tactical Goals are directly related to the strategic goals of the organization
They indicate the levels of achievement necessary in the departments and divisions of the organization.
They must support the strategic goals of the organization

8. Operational Goals
Operational goals and objectives are determined at the lowest level of the organization and apply to specific employees or subdivisions in the organization.
They focus on the individual responsibilities of employees.

9. Super-ordinate Goals
Super-ordinate Goals are those goals that are often used to resolve conflict between groups.
They can be powerful motivators for groups to resolve their differences and co-operate with one another.

10. BCG MATRIX / GROWTH SHARE MATRIX
Created by Bruce Henderson in 1970.
It helps the company to allocate resources.
Tool to access company’s position in terms of its product range.
Helps the company to think about its products and services and make decisions.
BCG matrix is based on two variables- rate of growth of the product and relative market share.

11. BCG MATRIX

12. Stars
Stars represent business units having large market share in a fast growing industry.
They may generate cash but because of fast growing market, stars require huge investments to maintain their lead.
These business units are highly competitive in the industry.
If successful, a star will become a cash cow when the industry matures.

13. Cash Cows
Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units.
These SBU’s are the corporation’s key source of cash, and are specifically the core business. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued.

14. Question Marks
Question marks represent business units having low relative market share and located in a high growth industry.
They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable.
Question marks are generally new goods and services which have a good commercial prospective.
Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-leader.
If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars.

15. Dogs
Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages.
These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc.
Unless a dog has some other strategic aim, it should be liquidated if there is fewer prospects for it to gain market share.
Number of dogs should be avoided and minimized in an organization.

16. Available strategies to pursue
BUILD
HOLD
HARVEST
DIVEST

17. BUILD
The product share needs to be increased to strengthen its position
Short term earnings and profits are deliberately forfeited because it is hoped that the long term gains will be higher than this.
The strategy is suited to question marks if they are to become stars

18. HOLD The objective is to maintain current share position .
This strategy is used for Cash Cows so that they continue to generate large amount of cash

19. HARVEST
Management tries to increase short term cash flows as far as possible by increasing prices, cutting cost etc at the expense of long term future.
This strategy is suited to weak Cash Cows / Cash Cows in market with limited future.
It is also used for Question Marks where there is no possibility of turning them into Stars or for Dogs.

20. DIVEST
This strategy is to rid the organization of the products or SBUs
These resources can be utilized elsewhere in the business.
This strategy is typically used for Question marks that will not become Stars and for Dogs.

21. The McKinsey / General Electric Matrix
The McKinsey/GE Matrix overcomes a number of the disadvantages of the BCG Box. Firstly, market attractiveness replaces market growth as the dimension of industry attractiveness, and includes a broader range of factors other than just the market growth rate. Secondly, competitive strength replaces market share as the dimension by which the competitive position of each SBU is assessed.

24. McKINSEY 7-S Framework
It is a tool that analyzes firms organizational design by looking at 7 key internal elements in order to identify if they are effectively aligned and allow organization to achieve its objective.
It is tool to monitor changes in the internal situation of an organization.

25. Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom.
Systems: the daily activities and procedures that staff members engage in to get the job done.
Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.

26. Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the company.

27. STRATEGIES
INTEGRATION
DIVERSIFICATION
DISINVESTMENT
DOWNSIZING

28. INTEGRATION It is a common growth strategy
Integration means combination of business that are separate but complementary to each other
It may be between the firms from same industry or different industries.

29. Features of Integration
It is an association of business units from the same or different industries with a view to achieve certain well defined objectives like eliminate competition , control the market , create monopoly etc.
It minimizes risks and ensures survival and growth of combining units
Sometimes can be used to create monopoly situation and exploit customers

30. Types of Integration HORIZONTAL INTEGRATION VERTICAL INTEGRATION
BACKWARD VERTICAL INTEGRATION
FORWARD VERTICAL INTEGRATION

31. DIVERSIFICATION
Broadening or enlarging the company’s product range by introducing new products or by extending the range of existing products.
It involves adding new business lines which may or may not be related to current business.
Expanding in untapped areas.

32. TYPES OF DIVERSIFICATION
HORIZONTAL
VERTICAL
CONCENTRIC
HETROGENEOUS (CONGLOMERATE)

33. DISINVESTMENT
It refers to selling or liquidation of the assets or subsidiary which is not viable.
To increase market share.
Availability of better alternatives
Need for increased investment
Lack of strategy fit
Legal pressures.

34. DOWNSIZING When a company permanantly reduces its workforce.
Due to poor economic conditions
Acquisition
Change in management
Economic crisis
Strategy changes
Excessive workforce
Automation
Outsourcing