Objective Function• Mission Statement – Boundary definition for an organization. – Tells what business you are in. – Basis of SWOT analysis• Vision Statement – Aspiration , dream & desire to move to a higher position. – Transition of dreams into objectives & goals.
Operational Efficiency (O.E.) & Strategy• Must Do – O.E. – Product Quality.• Should Do- Strategy. – Cost Leadership, Technology, Product Differentiation.• Wheel Vs Nirma
Why Strategy?• Competitive Advantage.• Strategy hand in hand with uncertainty and risk.• Increase return by taking risk.
Corporate Plan• Path of movement from starting point to a desired goal.• IC – the resource base.• TP – desired goal/ objective.• TH – time to execute the strategy.
Why Growth?• Need for Market Control – initial phase of growth• Need for diversification – New mission. – New product.• Rent Seeking Behavior.
Core Competencies.• Collective learning, embedded in time & represents the Assets of a company. – Three tests: • No duplication. • Value addition. • Access to multiple markets.
BCG & Core Competency• Should develop portfolio of core competency rather portfolio of business.• Mergers & acquisition.
Porter & HamelPorter (consistency school) Hamel (Stretch School)Fit & consistency fit Revolutionary, StretchPerform different activities Perform activities differentlyCEO JOHN DOE DEPENDENT PILLARS: •Market structure. •Product life cycle. •Generic strategy.