2. WHAT IS STRATEGY?
• Where is the business trying to get to in the long-
term?Direction
• Which markets should a business compete in and
what kind of activities are involved in such
markets?
Markets and Scope
• How can the business perform better than the
competition?Advantage
• What resources are required in order to be able to
compete?Resources
• What external, environmental factors affect the
businesses' ability to compete?Environment
• What are the values and expectations of those who
have power in and around the business?Stakeholders
4. STRATEGIC FIT
MODEL
Strategic Mindsets
STRATEGIC INTENT
MODEL
Strategic thinking is driven by
the match between current
capabilities and existing
opportunities
Searching for sustainable
advantages
Finding protected niches
Strategic thinking is driven by
bridging gap between today’s
reality and tomorrow’s vision
Finding ways to leverage
resources
Outpacing competitors in building
new advantages
Making new industry rules
5. APPROACHES TO COMPETITIVE INNOVATION
Building layers of advantage
Wider a company’s portfolio of advantages, the less risk it faces in
competitive battles
Aim for differentiation + cost reduction
Sources of competitive advantage are mutually desirable layers, not
mutually exclusive choices
6. APPROACHES TO COMPETITIVE INNOVATION
Searching for loose breaks
Required to break into a market or challenge a competitor
• Attack outside existing
market
• Remain unnoticed
7. APPROACHES TO COMPETITIVE INNOVATION
Changing the terms of engagement
Barriers to Entry v/s Barriers to Imitation
• Standardized machine
components reduced
cost• Distribution through
office product dealers
• Create a national
service network
8. APPROACHES TO COMPETITIVE INNOVATION
Competing through collaboration
Win without fighting
“Enemy’s enemy is your friend”
• Calibrate competitor’s
strength
• Assessed the progress
US rivals had made in
cost reduction, quality
and technology
12. 1. What Is Our Business?
Mission
Procter & Gamble
will provide branded products and services of superior quality and value that improve the lives of the
world’s consumers. As a result, consumers will reward us with industry leadership in sales, profit, and
value creation, allowing our people our shareholders, and the communities in which we live and work.
13. 2. The Process of Developing Vision and Mission Statements
3. Prepare a
vision and
mission
statement
2. Background
information.
1. Alternative
strategies
4. Merge into single
document
5. Final
documents
1. Clear vision and mission statements are needed before alternative strategies can be implemented.
2. Select several articles about these statements and ask all managers to read these as background
information.
3. Ask managers themselves to prepare a vision and mission statement for the organization.
4. Merge these statements into a single document and distribute the draft statements to all managers.
5. Extent that all managers have input into and support the final documents, organizations can more easily
obtain managers
14. 3. Mission Statement Components
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?
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?
15. 4. Benefits of Having a Clear Mission and Vision
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve conflict views between managers.
6. Promote a sense of shared expectations among all managers and employees
.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees
16. 5. Evaluate mission statements of different organizations
Procter & Gamble will provide branded products and services of superior
quality and value (7) that improve the lives of the world’s (3) consumers. As a
result, consumers (1) will reward us with industry leadership in sales, profit (5),
and value creation, allowing our
people (9), our shareholders, and the communities (8) in which we live and work
to prosper.
(Author comment: Statement lacks three components: Products/Services,
Technology, and Philosophy)
We aspire to make PepsiCo the world’s (3) premier consumer products
company, focused on convenient foods and beverages (2). We seek to produce
healthy financial rewards for investors (5) as we provide opportunities for growth
and enrichment to our employees
(9), our business partners and the communities (8) in which we operate. And in
everything we do, we strive to act with honesty, openness, fairness and integrity
(6).
(Author comment: Statement lacks three components: Customers, Technology,
and Self-Concept)
17. Broad in scope
Generate strategic
alternatives
Not overly specific
Reconciles interests among
diverse stakeholders
Finely balanced between
specificity & generality
Effective Missions
18. Arouse positive feelings &
emotions
Motivate readers to action
Generate favorable
impression of the firm
Effective Missions
19. Reflect future growth
Provide criteria for strategy
selection
Basis for generating &
evaluating strategic options
Are dynamic in nature
Effective Missions
21. PEPSICO MISSION
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.
