The document discusses various aspects of corporate strategy formulation including: 1. Formulating a strategy that adds value for customers by meeting their needs better than competitors. 2. Developing a strategy that allows a company to understand how to position itself against competition and gain a sustainable advantage. 3. The importance of strategy formulation for a firm's success. Strategies are divided into corporate and competitive strategies.

1. CORPORATE STRATEGY FORMULATION
• FORMULATING A SUCCESSFUL STRATEGY MEANS ADDING VALUE FOR THE TARGETED
CUSTOMERS, WHICH AN ORGANISATION CAN ACHIEVE BY CONSISTENTLY BETTERING FROM ITS
COMPETITORS AS REGARD MEETING CUSTOMER NEEDS
• WITH APPROPRIATE STRATEGY, A COMPANY CAN BETTER UNDERSTAND HOW IT CAN
POSITION ITSELF AGAINST THE COMPETITION & GAIN A SUSTAINABLE COMPETITIVE
ADVANTAGE. A STRATEGY ALSO DETERMINES A COMPANIES KEY STRATEGIC PRIORITIES.
• STRATEGY FORMULATION IS VITAL TO A FIRM’S WELL BEING
• STRATEGY DIVIDED AS CORPORATE STRATEGY(CO DECIDES THE LINE OF BUSI TO
GET INVOLVED IN)
COMPETITIVE STRATEGY(WHERE THE FRAMEWORK FOR ACHIEVING
SUCCESS IS STRUCTURED)
BOTH ARE EQUALLY IMPORTANT FOR THE COMPANIES CAUSE

2. THEY INVOLVE:-
1. MARKETING ANAYSIS
2. PLANNING
3. SETTING OF GOALS & OBJECTIVES
4. STRINGENT MONITORING
5. COMMITMENT OF RESOURCES ETC
MISSION STATEMENT:-
 IMPORTANT NOT ONLY IN SHORT BUT ALSO IN LONG RUN
 THOSE BELONGING TO THE COMPANY WORK TOGETHER WITH A UNIFORM PURPOSE
 IDENTIFIES SCOPE OF THE COMPANIES OPERATIONS, DESCRIBES THE COMPANIES PRODUCT, IDENTIFY
THE MARKET TECHNOLOGICAL AREAS, REFLECT THE VALUE & PRIORITIES OF STRATEGIC DECESION
MAKERS

3.  REFLECTS THE INTENTION OF THE COMPANY(FUTURE INTENTION)
 FORMULATED WITH GREAT CAUTION..KEEPING IN MIND THE PRODUCT, ITS MARKET, TECHNOLOGY
USED, IMAGE OF COMPANY, ITS GOALS, & PHILOSOPHY.
 COVERS NOT ONLY OWN EMPLYOEES , CUSTOMERS, SHAREHOLDERS BUT ALSO LOCAL COMMUNITY &
SOCIETY.
 ETHICS & NORMS TO BE FOLLOWED.

4. UNDERSTANDING MISSION & PURPOSE
MISSIONIS DIVIDED AS “A STATEMENT WHICH DEFINES PURPOSE AS “ ANYTHING WHICH AN
ORGN STRIVES THE ROLE THAT AN ORGN PLAYS IN THE SOCIETY”. FOR”.
BOTH MISSION & PURPOSE GO HAND IN HAND & USED TOGETHER, MAINTAINING THE BASIC
DIFFERENCE BETWEEN THEM.
MISSION STRICTLY REFERS TO THE PARTICULAR NEEDS OF THE SOCIETY FOR INSTANCE:- ITS
INFORMATIONAL NEEDS.
PURPOSE RELATES TO WHAT THE ORGANISATION STRIVES TO ACHIEVE IN ORDER TO FULFILL ITS
MISSION TO THE SOCIETY.
CHARACTERSTICS OF MISSION STATEMENT:-
1. IT SHD BE FEASIBLE:- IT SHD BE REALISTIC & ACHIEVEABLE EG:- IN THE SIXTIES, THE US
NATIONAL AERONAUTICS & SPACE ADMINISTRATION(NASA) HAD A MISSION TO LAND ON
MOON. IT WAS A FEASIBLE MISSION THAT WAS ULTIMATELY REALISED.
2. IT SHD BE PRECISE:- SHD NOT BE NARROW AS TO RESTRICT THE ORGN ACTIVITIES NOR SHD
BE TOO BROAD TO MAKE ITSELF MEANINGLESS.

5. 3. IT SHD BE CLEAR:- CLEAR ENOUGH TO LEAD TO ACTION.. NOT BE MEANT FOR PUBLICITY PURPOSE.
MANY ORG’S DO
SO FOR EMPHASISING THEIR IDENTITY & CHARACTER. FOR EG:- ASIAN PAINTS STRESSES ‘ LEADERSHIP
THROUGH EXCELLENCE’. & BAJAJ AUTO’S BELIEVE IN PROVIDING ‘ VALUE FOR MONEY FOR YEARS’.
4. IT SHD BE MOTIVATING:- A MISSION STATEMENT SHD BE MOTIVATING FOR MEMBERS OF THE ORGN &
OF THE SOCIETY. A BANK WHICH LAYS GREAT EMPHASIS ON CUSTOMER SERVICE IS LIKELY TO MOTIVATE
ITS EMPLOYEES TO SERVE ITS CUSTOMERS WELL & TO ATTRACT CLIENTS.
5. IT SHD BE DISTINCTIVE:- A MISSION STATEMENT WHICH IS INDISCRIMINATE IS LIKELY TO HAVE LESS
IMPACT. IF ALL SCOOTER MANUFACTURING DEFINED THEIR MISSION IN A SIMILAR FASHION , THERE
WOULD NOT BE MUCH OF DIFFERENCE AMONG THEM. BUT IF ONE DEFINES IT AS SCOOTER THAT
PROVIDES ‘ VALUE FOR MONEY’ FOR YEARS IT CREATE AN IMPORTANT DISTINCTION IN THE PUBLIC
MIND.
6. IT SHD INDICATE MAJOR COMPONENTS OF STRATEGY:- IT SHD INDICATE THAT THE CO WILL FOLLOW A
COMBINATION OF STABILITY, GROWTH, & DIVERSIFICATION STRATEGIES IN FUTURE.
7. IT SHD INDICATE HOW OBJ’S ARE TO BE ACCOMPLISHED:- MISSION STATEMENT SHD ALSO PROVIDE

6. VISION
• VISION IS A POWERFULL MOTIVATOR & KEEPS AN ORGN MOVING FIND IN THE INTENDED
DIRECTION.
• MOSTLY VISION & MISSION MAY SEEM OVERLAPPING OR SIMILAR, FACT IS VISON OF CO IS NOT
ALWAYS AS SPECIFIC AS THE MISSION STATEMENT.
• USUALLY VISION IS IMPERSONAL & NOT EVEN WRITTEN DOWN
• EG:- CADILA HEALTHCARE LTD FOUNDED IN-
1952- IS TO COME UP WITH HEALTH CARE SOLUTION, PRODUCE ACTIVE PHARMACEUTICAL
INGRIENTS, HERBAL PRODUCTS, VACCINES ETC.
1955-GROUP CAME TO BE KNOWN AS ZYDUS CADILA GROUP.
ZYDUS GROUP NOT AIMING TO BE GLOBAL PLAYER BUT ALSO PURSUING AN AMBITION OF
BECOMING TOP THREE HEALTH CARE COMPANIES IN INDIA.
ALREADY MADE ITS PRESENCE IN MARKETS OF US, BRAZIL, SOUTH AFRICA & ALGERIA.
NOW ITS VISION:- ‘ZYDUS SHALL BE A LEADING HEALTHCARE PROVIDER WITH A ROBUST
PRODUCT PIPELINE & SALE OF OVER $ 1 BILLION BY 2010. WE SHALL ACHIEVE SALES OF OVER

7. OBJECTIVES &GOALS
• GOALS &OBJ’S ARE USED MANY TIMES INTERCHANGEABLY BUT MANY SCHOLARS HAVE MADE
DISTINCTION BETWEEN THEM.
• KING & CLELAND STATE THAT OBJ’S ARE BROAD AND TIMELESS STATEMENT IN QUANTITATIVE
TERMS
• GOALS ON THE OTHER HAND ARE MORE SPECIFIC & POSITIVE & TIME BASED
• GOALS EMPHASIZE ON MEASUREMENT OF PROGRESS TOWARDS ACHIEVING THE OBJECTIVES
• OBJ’S ARE OPEN ENDED(LONG TERM) ATTRIBUTES THAT DENOTES THE FUTURE STATE OR OUTCOME.
• GOALS ARE CLOSE ENDED(SHORT TERM) ATTRIBUTES WHICH ARE PRECISE & EXPRESSED IN SPECIFIC
TERMS.
USE OF COMPANY’S OBJECTIVES:- OBJ’S ARE VITAL FOR AN ORGN. THEY
• EXPRESS THE MISSION IN A CLEARER WAY
• PROVIDE A SPECIFIC DIRECTION TO ALL ORGANIZATIONAL AREAS & LEVELS.
• ARE CHANGED REGULARLY TO KEEP UP WITH THE CHANGES IN THE ENVIRONMENT.
• AID IN STRATEGIC DECISION MAKING

8. HIERARCHY OF OBJ’S:- OBJ’S HAVE A HIERARCHY. THEY ARE AS FOLLOWS: (IMP ACC TO QUES IN
PAPER)
• CORPORATE LEVEL
• SBU OR DIVISIONAL LEVEL
• FUNCTIONAL LEVEL
• DEPARTMENTAL LEVEL
• SECTIONAL LEVEL
• INDIVIDUAL LEVEL
AREAS OF OBJECTIVE SETTING:-
• MARKET STANDING
• INNOVATION
• PRODUCTIVITY
• PROFITABILITY
• PHYSICAL & FINANCIAL RESOURCES
• MANAGER’S PERFORMANCE & DEVELOPMENT
• WORKER PERFORMANCE & ATTITUDE
• PUBLIC RESPONSIBILITY

9. GUIDELINES FOR EFFECTIVE OBJ’S:-
• SPECIFIC
• CLEAR
• MULTIPLE(COVER ALL ASPECTS)
• PERIODICAL
• TIME BOUND
• CHALLENGING
• VERIFIABLE
• REALISTIC
• MEASUREABLE
ROLE OF OBJECTIVES:- (IMP ACC TO QUES PAPER FROM GUPTA)
 OBJ’S DEFINES THE ORGN’S RELATIONSHIP WITH ITS ENVIRONMENT.
 OBJ’S HELP AN ORGN TO PURSUE ITS MISSION & PURPOSE.
 OBJ’S PROVIDE THE BASIS FOR STRATEGIC DECISION MAKING
 OBJ’S PROVIDE THE STANDARD FOR PERFORMANCE APPRAISAL

10. CHARACTERSTICS:-
 OBJ’S SHD BE UNDERSTANDABLE
 OBJ’S SHD BE CONCRETE & SPECIFIC
 OBJ’S SHD BE RELATED TO A TIME FRAME
 OBJ’S SHD BE MEASUREABLE & CONTROLABLE
 OBJ’S SHD BE CHALLENGING
 DIFFERENT OBJ’S SHD CORRELATE WITH EACH OTHER
 OBJ’S SHD BE SET WITHIN CONSTRAINTS
POLICIES(STRATEGIC INTENT):-
• A POLICY IS TYPICALLY DESCRIBED AS PRINCIPLE OR RULE TO QUIDE DECISIONS & ACHIEVE
RATIONAL OUTCOMES.
• POLICY WILL CONTAIN THE “ WHAT” & “WHY” , PROCEDURE OR PROTOCOLS CONTAIN ‘ WHAT”
, “HOW” , “WHERE” & “WHEN”.
• POLICIES ARE GENERALLY ADOPTED BY BOARD OF OR SENIOR GOVERNANCE BODY WITHIN AN
ORGANISATION WHEREAS PROCEDURES OR PROTOCOLS WOULD BE DEVELOPED & ADOPTED BY
SENIOR EXECUTIVE OFFICERS.
• A POLICY MAY BE CONSIDERED AS A “ STATEMENT OF INTENT” OR A “COMMITMENT”. FOR
THAT REASON AT LEAST, WE CAN HELD ACCOUNTABLE FOR OUR POLICY.

11. CORPORATE PHILOSOPHY
• PEOPLE WHO MAKE UP THE ORGANISATION ARE LIVING ENTITIES & WHAT THEY SHARE IN
COMMON OVER A CERTAIN TIME PERIOD CONSTITUTE VALUE.THESE SHARED VALUES MAKE UP
THE CORPORATE CULTURE.
• A GOOD CORPORATE CULTURE RESULTS IN SUCCESSFUL ORGANIZATION.
• MANY SMALL BUSINESS OWNERS IMPLEMENT A CORPORATE PHILOSOPHY WITHIN THE
FRAMEWORK OF THEIR BUSINESS. A CORPORATE PHILOSOPHY ENLIGHTENS A COMPANY’S
CUSTOMERS & EMPLOYEES OF THE INTENTION OF THE ORGANIZATION, HELPING TO BUILD
MORE MEANINGFUL RELATIONSHIPS.
• A BUSINESS OWNER SHOULD SPEND TIME DEVELOPING A PHILOSOPHY THAT ALIGNS HIS GOALS
& VISION FOR HIS BUSINESS
• CORPORATE PHILOSOPHY STATEMENTS CAN HELP A BUSINESS OWNER DEVELOP A POLICY
CATERED TO HIS BUSINESS.
• CORPORATE PHILOSOPHY CONSISTS OF FOUR PILLARS:-
MISSION
BUSINESS DOMAIN
MANAGEMENT GOALS

12. CORPORATE GOVERNANCE
• C.G. HELPS TO MANAGE A CO FOR THE BENEFIT OF SHAREHOLDERS, CUSTOMERS, EMPLOYEES,
SUPPLIERS ETC.
• GOVERNANCE IS AN AGE OLD CONCEPT PARTICULARLY IN CONTEXT OF STATE
ADMINISTRATION.
• CONTENTS OF C.G. CODE:-
1. CONSTITUTION OF BOD:-CODE COVERS THE CONSTITUTION OF BOD, NON EXECUTIVE,
DIRECTORS ROLE, THE BOARD MEETING, IMPORTANT MATTERS THAT NEED TO BE LOOKED
INTO BY THE BOARD.
2. DISCLOSURE OF INFORMATION:- THE ANNUAL & PERIODICAL REPORT MUST HAVE FINANCIAL
& OTHER INFORMATION.
3. MANAGEMENT PRACTICES:- THE PRACTICES SHD PROTECT THE INTEREST OF CONSUMERS,
FINANCERS, CREDITORS, DISTRIBUTORS, GOVERNMENT & SOCIETY.
• C.G. IS SET OF PROCESSES ,CUSTOMS , POLICIES. LAWS & INSTITUTION AFFECTING THE WAY A
CORPORATION IS DIRECTED , ADMINISTERED OR CONTROLLED.
• C.G. IS THE TERM THAT REFERS BROADLY TO THE RULES, PROCESSES OR LAWS BY WHICH

17. FOUR PILLARS OF CORPORATE GOVERNANCE
1. ACCOUNTABILITY
2. FAIRNESS
3. TRANSPARENCY
4. INDEPENDENCE
1.ACCONTABILITY:-
• ENSURE THAT MANAGEMENT IS ACCOUNTABLE TO THE BOARD
• ENSURE THAT THE BOARD IS ACCOUNTABLE TO SHAREHOLDERS
2. FAIRNES
• PROTECT SHAREHOLDER RIGHTS
• TREAT ALL SHAREHOLDERS INCLUDING MINORITIES, EQUITABLY
• PROVIDE EFFECTIVE REDRESS FOR VIOLATIONS

18. 3. TRANSPARENCY:-
• ENSURE TIMELY , ACCURATE DISCLOSURE ON ALL MATERIAL MATTERS, INCLUDING THE FINANCIAL
SITUATION , PERFORMANCE, OWNERSHIP, AND CORPORATE GOVERNANCE.
4. INDEPENDENCE:-
• PROCEDURES & STRUCTURES ARE IN PLACE SO AS TO MINIMISE , OR AVOID COMPLETELY CONFLICTS OF
INTERESTS..
• INDEPENDENT DIRECTORS AND ADVISERS I.E. FREE FROM THE INFLUENCE OF OTHERS.

19. CORPORATE CULTURE
• ACCORDING TO J.A PEARCE II & R.B. ROBINSON JR. CORPORATE CULTURE IS “ THE SET OF
IMPORTANT ASSUMPTIONS OFTEN UNSTATED- THAT MEMBERS OF ORGN SHARE IN COMMON.
• A BLEND OF VALUE, BELIEFS, SYMBOLS, RITUALS & MYTHS ALL COMPANIES DEVELOP OVER
TIME.
• WHETHER WRITTEN AS MISSION STATEMENT, SPOKEN OR MERELY UNDERSTOOD, CORPORATE
CULTURE DESCRIBES & GOVERNS THE WAY A COMPANIES OWNERS & EMPLOYEES THINK, FEEL &
ACT.
• YOUR OWN BUSINESS CULTURE MAY BE BASED ON BELIEFS SPELLED OUT IN YOUR MISSION
STATEMENT
• IT COULD CONSIST IN PART OF A CORPORATE SYMBOL LIKE THE RAINBOW COLORED APPLE
THAT SYMBOLIZES APPLE COMPUTER.
• WHATEVER SHAPE IT TAKES YOUR COMPANIES CORPORATE CULTURE PLAYS A BIG ROLE IN
DETERMINING HOW WELL YOUR BUSINESS WILL DO…
• CORPORATE CULTURE CA BE SEEN IN :-
SHARED FEELINGS:- WHAT PEOPLE FEEL ABOUT ORGANIZATION
SHARED SAYING :- WHAT PEOPLE TALK ABOUT ORGANIZATION