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1. Part Two:Part Two:
STRATEGY FORMULATION andSTRATEGY FORMULATION and
IMPLEMENTATIONIMPLEMENTATION
COMPANY VISIONCOMPANY VISION
and MISSIONand MISSION
Prepared and Presented by:
LORENZO E. GARIN JR., MPM
NUIC, Instructor

2. Learning ObjectivesLearning Objectives
 Describe a company mission and explainDescribe a company mission and explain
its valueits value
 Explain why it is important for the missionExplain why it is important for the mission
statement to include the company basicstatement to include the company basic
product or service, its primary markets,product or service, its primary markets,
and its principal technologyand its principal technology
 Discuss the importance of companyDiscuss the importance of company
philosophy, public image, and companyphilosophy, public image, and company
self concept to stockholdersself concept to stockholders
 Describe the company’s board of directorsDescribe the company’s board of directors

3. What is Strategic Management?What is Strategic Management?
Strategic ManagementStrategic Management
The set of decisions and actions usedThe set of decisions and actions used
to formulate and implement strategiesto formulate and implement strategies
that will provide a competitivelythat will provide a competitively
superior fit between the organizationsuperior fit between the organization
and its environment so as to achieveand its environment so as to achieve
organizational goals.organizational goals.

4.  Defines the desired or intended futureDefines the desired or intended future
state of an organization or enterprise instate of an organization or enterprise in
terms of its strategic direction. Visionterms of its strategic direction. Vision
is a long term view, sometimesis a long term view, sometimes
describing how the organization woulddescribing how the organization would
like the world in which it operates tolike the world in which it operates to
be.be.
For example a charity working with theFor example a charity working with the
poor might have a vision statement whichpoor might have a vision statement which
read "A world without povertyread "A world without poverty
What is Company Vision?What is Company Vision?

5. Reasons for having a visionReasons for having a vision
statementstatement
Gets team focused.Gets team focused.
Shows a picture of where theShows a picture of where the
company is going.company is going.
Instills focus, discipline, and structureInstills focus, discipline, and structure
within the organization.within the organization.
 Ensures that team understandsEnsures that team understands
company direction.company direction.

6. How to write a Vision?How to write a Vision?
 Determine the organization's overriding goalDetermine the organization's overriding goal
 State what the organization envisions itself to be inState what the organization envisions itself to be in
terms of values, employees, growth and contributionsterms of values, employees, growth and contributions
to society.to society.
 Look at vision statements of competitors in theLook at vision statements of competitors in the
industryindustry
 Use wording that will inspire your team. Think ofUse wording that will inspire your team. Think of
adjectives and sentences that will get the team excitedadjectives and sentences that will get the team excited
and will make them think they are part of somethingand will make them think they are part of something
that is much bigger than something they could havethat is much bigger than something they could have
thought of themselves.thought of themselves.
 Get other people on the team to critique the draft of theGet other people on the team to critique the draft of the
vision to make sure it's effective and inspiring. If therevision to make sure it's effective and inspiring. If there
are any key customers the organization trusts, askare any key customers the organization trusts, ask
them to review the draft too.them to review the draft too.

8. What is Company Mission?What is Company Mission?
Company MissionCompany Mission
The unique purpose thatThe unique purpose that sets asets a
company apart fromcompany apart from others ofothers of
itsits type andtype and identifies theidentifies the
scope of itsscope of its operation. Inoperation. In
product,product, market, andmarket, and
technologytechnology

9. MissionMission
 Definition: A sentence describing a company'sDefinition: A sentence describing a company's
function, markets and competitive advantages; afunction, markets and competitive advantages; a
short written statement of your business goalsshort written statement of your business goals
and philosophiesand philosophies
 A mission statement defines what anA mission statement defines what an
organization is, why it exists, its reason fororganization is, why it exists, its reason for
being. At a minimum, your mission statementbeing. At a minimum, your mission statement
should define who your primary customers are,should define who your primary customers are,
identify the products and services you produce,identify the products and services you produce,
and describe the geographical location in whichand describe the geographical location in which
you operateyou operate

10. Importance of Mission
Mission
Resource Allocation
Unanimity of Purpose
Organizational Climate
Focal point for work
structure
Benefits from a strong mission

11. Mission
Elements
Customers
Markets
Employees
Public
Image
Self-Concept
Survival
Growth
Profit
Products
Services
Technology

12. How to write a Mission?How to write a Mission?
 Ask "What do we do?"; "How do we do it?";Ask "What do we do?"; "How do we do it?";
and "For whom do we do it,"and "For whom do we do it,"
 Create a draft mission statement describingCreate a draft mission statement describing
how the company uniquely answers thesehow the company uniquely answers these
questions. Touch on the organization's currentquestions. Touch on the organization's current
operations and the industry it is in.operations and the industry it is in.
 Look at competitors in the industry and useLook at competitors in the industry and use
their mission statements for research. Asktheir mission statements for research. Ask
yourself what works and what does not work.yourself what works and what does not work.
Revise your mission statement as needed.Revise your mission statement as needed.
 Get feedback from other members of theGet feedback from other members of the
organization once the statement is drafted.organization once the statement is drafted.

13. The Difference betweenThe Difference between
Vision & MissionVision & Mission
Vision - The FutureVision - The Future
Definition: The way in which oneDefinition: The way in which one
sees or conceives something; asees or conceives something; a
mental image; An overall statement ofmental image; An overall statement of
the goal of the organization.the goal of the organization.
Vision should describe what will beVision should describe what will be
achieved in the wider sphere if theachieved in the wider sphere if the
organization and others are successfulorganization and others are successful
in achieving their individual missions.in achieving their individual missions.

14. Mission - The PresentMission - The Present
Definition: An assignment one is sent toDefinition: An assignment one is sent to
carry out; a self-imposed duty. A missioncarry out; a self-imposed duty. A mission
statement identifies the reason for thestatement identifies the reason for the
existence of the organization. The statementexistence of the organization. The statement
should be linked to the overall operationsshould be linked to the overall operations
and business of the organizationand business of the organization
A Mission statement is more specific toA Mission statement is more specific to
what the enterprise can achieve itself.what the enterprise can achieve itself.
The Difference betweenThe Difference between
Vision & MissionVision & Mission

15. Which comes first?Which comes first?
That depends. If you have a new start up business,That depends. If you have a new start up business,
new program or plan to reengineer your currentnew program or plan to reengineer your current
services, then the vision will guide the missionservices, then the vision will guide the mission
statement and the rest of the strategic plan. If youstatement and the rest of the strategic plan. If you
have an established business where the mission ishave an established business where the mission is
established, then many times, the mission guides theestablished, then many times, the mission guides the
vision statement and the rest of the strategic plan.vision statement and the rest of the strategic plan.
Either way, you need to know your fundamentalEither way, you need to know your fundamental
purpose - the mission, your current situation in termspurpose - the mission, your current situation in terms
of internal resources and capabilities (strengthsof internal resources and capabilities (strengths
and/or weaknesses) and external conditionsand/or weaknesses) and external conditions
(opportunities and/or threats), and where you want to(opportunities and/or threats), and where you want to
go - the vision for the future. It's important that yougo - the vision for the future. It's important that you
keep the end or desired result in sight from the startkeep the end or desired result in sight from the start

16. To remain competitive, companiesTo remain competitive, companies
develop strategies that focus on:develop strategies that focus on:
1.1. Core competenceCore competence
 A business activity that an organization doesA business activity that an organization does
particularly well in comparison to competitors.particularly well in comparison to competitors.
1.1. SynergySynergy
 The condition that exists when theThe condition that exists when the
organization’s parts interact to produce a jointorganization’s parts interact to produce a joint
effect that is greater than the sum of the partseffect that is greater than the sum of the parts
acting alone.acting alone.
1.1. Value CreationValue Creation
 The heart of strategy.The heart of strategy.
 Value can be defined as the combination ofValue can be defined as the combination of
benefits received and costs paid by thebenefits received and costs paid by the
customers.customers.

17. Levels of StrategyLevels of Strategy
 Corporate-Level StrategyCorporate-Level Strategy
 The level of strategy concerned with the question,The level of strategy concerned with the question, “What“What
business are we in?”business are we in?”. Pertains to the organization as a. Pertains to the organization as a
whole and the combination of business units andwhole and the combination of business units and
product lines that make it up.product lines that make it up.
 Business-Level StrategyBusiness-Level Strategy
 The level of strategy concerned with the question,The level of strategy concerned with the question, “How“How
do we compete?”do we compete?”. Pertains to each business unit or. Pertains to each business unit or
product line within the organization.product line within the organization.
 Functional-Level StrategyFunctional-Level Strategy
 The level of strategy concerned with the question,The level of strategy concerned with the question, “How“How
do we support the business-level strategy?”do we support the business-level strategy?”. Pertains to. Pertains to
all of the organization’s major departments.all of the organization’s major departments.

18. Three Levels of Strategy in OrganizationThree Levels of Strategy in Organization
Corporation
Textile Units Chemicals Unit Auto Parts Unit
Finance R & D Manufacturing Marketing
Corporate-Level Strategy:
What business are we in?
Business-Level Strategy:
How do we compete?
Functional-Level Strategy:
How do we support the business-level strategy?

19. Corporation
Textile Units
Finance R & D Manufacturing Marketing
Corporate-Level Strategy:
What business are we in?
Business-Level Strategy:
How do we compete?
Functional-Level Strategy:
How do we support the business-level strategy?

20. Strategy Formulation Versus ImplementationStrategy Formulation Versus Implementation
 Strategy FormulationStrategy Formulation
The stage of strategic management that involvesThe stage of strategic management that involves
the planning and decision making that lead to thethe planning and decision making that lead to the
establishment of the organization’s goals and of aestablishment of the organization’s goals and of a
specific strategic plan.specific strategic plan.
 Strategy ImplementationStrategy Implementation
The stage of strategic management that involvesThe stage of strategic management that involves
the use of managerial and organizational tools tothe use of managerial and organizational tools to
direct resources toward achieving strategicdirect resources toward achieving strategic
outcomes.outcomes.

21. Situation AnalysisSituation Analysis
Analysis of the strengths, weaknesses,Analysis of the strengths, weaknesses,
opportunities, and threats (SWOT) that affectopportunities, and threats (SWOT) that affect
organizational performance.organizational performance.
 StrengthsStrengths
 Positive internal characteristics that the organization can exploit toPositive internal characteristics that the organization can exploit to
achieve its strategic performance goals.achieve its strategic performance goals.
 WeaknessesWeaknesses
 Internal characteristics that might inhibit or restrict theInternal characteristics that might inhibit or restrict the
organization’s performance.organization’s performance.
 OpportunitiesOpportunities
 Characteristics of the external environment that have the potentialCharacteristics of the external environment that have the potential
to help the organization achieve or exceed its strategic goals.to help the organization achieve or exceed its strategic goals.
 ThreatsThreats
 Characteristics of the external environment that may prevent theCharacteristics of the external environment that may prevent the
organization from achieving its strategic goals.organization from achieving its strategic goals.

22. Competitive StrategiesCompetitive Strategies
1.1. DifferentiationDifferentiation
 a type of competitive strategy with which thea type of competitive strategy with which the
organization seeks to distinguish its products ororganization seeks to distinguish its products or
services from competitors.services from competitors.
1.1. Cost LeadershipCost Leadership
 A type of competitive strategy with which theA type of competitive strategy with which the
organization aggressively seeks efficientorganization aggressively seeks efficient
facilities, cuts costs, and employs tight costfacilities, cuts costs, and employs tight cost
controls to be more efficient than competitors.controls to be more efficient than competitors.
1.1. FocusFocus
 A type of competitive strategy that emphasizesA type of competitive strategy that emphasizes
concentration on a specific regional market orconcentration on a specific regional market or
buyer group.buyer group.

23. Formulating Functional-Level StrategyFormulating Functional-Level Strategy
the action plans adopted by majorthe action plans adopted by major
departments to support the execution ofdepartments to support the execution of
business-level strategy.business-level strategy.
major organizational functions includemajor organizational functions include
marketing, production, finance, humanmarketing, production, finance, human
resources, and research & development.resources, and research & development.

24. Strategy Implementation and ControlStrategy Implementation and Control
Implementation is the final step in theImplementation is the final step in the
strategic management process and it isstrategic management process and it is
how strategy put into action.how strategy put into action.
Some people argue that strategySome people argue that strategy
implementation is the most difficult andimplementation is the most difficult and
important part of strategic management.important part of strategic management.

25. STRUCTURAL DESIGN
• Design organization chart
• Create teams
• Determine centralization
• Arrange facilities, task
design
LEADERSHIP
• Use persuasion
• Motivate employees
• Shape culture/values
HUMAN RESOURCES
• Recruit/select employees
• Manage
transfers/promotions/training
• Direct layoffs/recalls
INFORMATION AND
CONTROL SYSTEMS
• Revise pay, reward system
• Change budget allocations
• Implement information
systems
• Apply rules and procedures
OrganizationEnvironment
Strategy
Performance
Tools for Putting Strategy into ActionTools for Putting Strategy into Action

26. The group of stockholderThe group of stockholder
representatives and strategicrepresentatives and strategic
managers responsible formanagers responsible for
overseeing the creation andoverseeing the creation and
accomplishment of the companyaccomplishment of the company
mission.mission.
Board of DirectorsBoard of Directors

27. Organizational Structure ofOrganizational Structure of
CorporationsCorporations
Stockholders
Directors
Officers (Top
Management)
President Vice Treasurer Secretary
President
elect
elect

28. Board of Directors- job responsibilitiesBoard of Directors- job responsibilities
 To establish and update the company missionTo establish and update the company mission
 To elect the company’s top officers (CEO)To elect the company’s top officers (CEO)
 To establish the compensation levels of the topTo establish the compensation levels of the top
officers, including the salaries and bonusesofficers, including the salaries and bonuses
 To set broad company policy on such matters asTo set broad company policy on such matters as
labor-management relations, product or service lineslabor-management relations, product or service lines
of business, and employee benefit packagesof business, and employee benefit packages
 To set company’s objectives and to authorizeTo set company’s objectives and to authorize
managers to implement the long term strategies thatmanagers to implement the long term strategies that
the top officers and the board have found agreeablethe top officers and the board have found agreeable
 To mandate company compliance with legal andTo mandate company compliance with legal and
ethical dictatesethical dictates
 To determine the amount and timing of theTo determine the amount and timing of the
dividends paid to stockholdersdividends paid to stockholders

29. THE ENDTHE END
Any clarification?Any clarification?
HAVE A NICE DAY!!!HAVE A NICE DAY!!! 