Strategic Intent of a Business
Module 2
1
Index
Takeaways
Concept of Strategic Intent
Vision
Mission
Values
Defining Business and its Dimensions
Setting Objectives of Business
Concept of Stretch, Leverage, and fit
2
Your Takeaways
Discuss the concept of Strategic Intent
Elaborate on the Vision statement of an Organization
Explain the Mission statement of an Organization
Define Business and Business Dimensions
Set objectives of business
Explain the concept of critical success factors of an
Organization
3
Strategic Intent
What an Organization wants to achieve in the Long term and
the Means to achieve its long term goals.
• According to Hamel and Prahalad, “strategic intent is an ambitious and
compelling dream that provides the emotional and intellectual energy
for the Journey to the future.”
4
Way to Go-3D effect
There are 3 basic feature of Strategic Intent
Decision + Discovery + Destiny = Strategic Intent
1. Create a Long term Vision
2. Communicate the vision to all stake holders to bring them on the same
plane
3. Develop a mission statement that includes the means of achieving the
Vision
4. Defining the Business dimensions
5. Setting the Organizational objectives and Goals
5
Process
1. Setting the Strategic Intent
2. Defining the Challenge
3. Empowering the Strategic Intent
6
Importance of Strategic Intent
Sense of Purpose Requires Motivates and
Clarity
Inspiration
Focus
of the commitment from Encourages
organization the Employee’s individuals to
for the Employees The Organization pursue
communicate the Organizational
Can make them Goals
Stake holders if intent to all
communicated employees so that Established core
well. they focus on their values and
respective tasks to principles to
achieve common create a unique
goals organizational
culture
7
Vision
A well-written vision statement should describe a future state of what an
organization wants to achieve over time. It should excite and motivate
your employees about your organization and the progress to be made in
the near future.
Toyota Kirloskar Motors(TKM)
Delight our customers through Innovative products, by utilizing
advanced technologies and services.
Ensure Growth that makes us a Major player in the Indian Auto Industry.
Contribute to the Indian Economy by involving all stakeholders
Become the most admired and respected company in India following
the Toyota way and be a Core company in the Toyota Global
Operations.
8
TKM Vision
It creates a sense of Purpose
Inspires the Organization to achieve its aim
Fosters long term thinking within
Making a mark in the market place by being unique,
original and competitive
Fostering experimentation and Innovation
Elevating the self esteem and energy of the
Stakeholders in the Organization
9
Creating a Vision Statement
1. Starting from a Core ideology which has core values
and Core Purpose.
2. Envisioned Future stating long term goals with a Vivid
Description
10
Mission
A Mission statement describes what your company does and how you
are different from other organizations in your competitive space.
The mission is timeless, but the vision is time-bound and a bit more
tangible.
Mission Defines an organizations business, its objectives and
approach to reach these objectives.
11
Mission Statement
12
Need for a Mission statement
Serves as a focal point to identify the organization’s purpose
and direction.
Develops a basis or standard for allocating Organizational
resources.
Helps in motivating employees to use the resources efficiently.
Establishes stability of purpose within the organization.
Facilitates transformation of objective and goals into the
work structure of the Organization.
13
Features of a Mission Statement
Feasible: It must be realistic in nature.
Clear: Transparent, Simple and structured.
Motivational: Encourage members of the organization to work
towards the Organizational goal.
Unique: Unique and distinctive to attract the attention of the Society.
14
Creating a Mission Statement
Process is as follows:
1. Analyzing the Vision Statement
2. Defining the Business
3. Formulating a Mission
15
Values
Deeply held convictions, priorities and underlying assumptions
that influence the attitudes and behaviors of employees.
These values could be:
I. Implicit: These values are implied but not directly stated;
example Honesty, independence, hard work
II. Explicit: Include concern towards employee development,
transparency in all internal and external business transactions,
relationships with customers and community etc.
16
Starbucks Value Proposition
With our Partners, our Coffee and Our customers at our Core, we
live these values:
Creating a culture of Warmth and belonging
Acting with courage, challenging the status Quo and finding new
ways to grow our company and each other.
Being present, connecting with transparency, dignity and respect.
Delivering our very best in all we do, holding ourselves
accountable for results.
We are performance driven, through the lens of Humanity.
17
Patagonia Value Statements
Our values reflect those of a business started by a band of
Climbers and surfers , and the minimalistic style they promoted.
Our approach to design demonstrates a bias for simplicity and
Utility.
A love for the wild and beautiful places demands participation in
the fight to save them and help reverse the decline in the
environmental health of our planet., creates
Our business activity from lighting stores to dyeing shirts, crates
pollution and we work to reduce those harms. We used recycled
Polyester in many of our clothes and only organic instead of
pesticide intensive cotton.
Staying true to our values during our thirty plus years in business
has helped created a successful company that we are proud to
run. 18
Value Statements of Patagonia Meant:
1. Restore the Environment> “Reduce, Reuse and Recycle”
2. Inspire Conscious Consumption> Focus should be to
inspire thoughtful consideration of each purchase –From
Immediate impact of products you buy to the broader impacts
created by their Lifecycles.
3. Create a Just and equitable world >We are committed to
make sure that everyone of our company interacts with –
Farmers who grow lavender, to the Customers who use our
products, are treated fairly and with respect.
19
Defining Business and Its dimensions
It refers to an act of Providing good, services or both to
consumers.
Harvard Professor Derek Abell defined Business on these 3
dimensions:
1. Customer Groups: they solve the “Who” aspect, that is, who
is being satisfied through the Business.
2. Customer Functions: They describe, What customer needs
are being satisfied by the business: therefore, it takes the
“What” aspect into consideration.
3. Technologies: it solves the “How” aspect. It provides an
approach in which a function can be performed.
20
Setting Objectives of Business
Objectives split the Vision and Mission into implementable
actions.
Objectives are set because they:
1. Define the relationship of the organization with its external
and internal environment
2. Provide the basis for strategic decision making
3. Help in pursuing the Vision and Mission
4. Provide a yardstick for measuring the performance of the
Organization
5. Serve as a motivating force to achieve organizational
goals
21
Feature of the Objectives
1. Understandable: Implies that the Objectives be clearly
Defined.
2. Specific Time Horizon: Implies that objectives should be
designed for a particular time frame.
3. Set Within Constraints: It means that the organization faces
various constraints internally and externally.
4. Measurable and Controllable: Quantifiable and manageable
in nature.
5. Form a Hierarchy: It should begin with a vision and mission
and end with the realization of the Goals.
22
Objectives Vs. Goals
Goals Objectives
1. Broadly stated aims 1. Specific aims
2. Qualitative in Nature 2. Quantitative in Nature
3. Long term 3. Short term
4. Cannot be measured in 4. Measurable in most
most cases cases
23
Hierarchy of Objectives
Overall objectives
Top Management
Divisional and
Departmental Objectives
Individual and Performance based
objectives
24
Factors affecting Objectives
1. Environmental Forces: Dynamic internal and External Forces in
nature that effect the interest of Various stakeholders
2. Availability of Resources: Implies that resource capability of an
organization influences objective setting e.g. Availability of Human and
Material Resources help in setting realistic objectives.
3. Value of Top Management: It influences the choice of Objectives. The
Philosophy and values of the Top Management are shaped by beliefs,
attitudes, and culture which have a great impact on setting objectives.
4. Awareness of past Objectives: It helps in setting new objectives for
the Organization . The organization cannot deviate much from the path
that it has been following in the past.
25
Strategic Objectives and Financial Objectives
Strategic: Focus on • Penetrating New market Segments
organizational • Achieving lower costs
competitive strength • Achieving Global product coverage
Organizational Objectives
• Improving global sales and distribution
and long term Properties
market strength • Having a large network of wholesale
distributors
• Increasing Annual Revenue by X %
Financial: Related to • Enhancing Quantum Dividends
financial targets set • Increase net profit and earnings per Share
• Building significant share holder value
by the Organization
26
Critical Success Factors
Factors that facilitate the growth of an organization are known
as Critical success Factors(CSF) or Growth facilitating
factors.
CSF’s are defined as Key factors, such as skills or resources
which are crucial for the success of the organization
3 Step procedures for determining CSF’s are:
1. Generating Success Factors: What makes Business
Successful?
2. Refining CSF’s into Objectives: What are the goals of the
organization WRT CSF’s?
3. Identifying the measures of Performance: What methods
should employed to assess success factors of an
organization?
27
Identification of CSF’s
It helps in employing resources into those areas, where the
organization spots an opportunity to Attain profit.
CSF’s are generated through creative techniques , such as brain
storming and require a certain degree of intuition and experience of an
individual for their assessments.
They are evaluated through Key Performance Indicators(PI’s) which
help in defining and measuring the progress of the Organization.
The KPI is expressed in terms of the product rejection rate and the
number of complaints.
28
Concept of Stretch, Leverage and Fit
Prof. Hamel and Prahalad introduced the concept.
Fewer resources and more aspirations lead to a STRETCH
situation.
LEVERAGE lead to stretching a meagre resource base by
concentrating, accumulating and conserving resources.
A FIT implies a situation where the resources fit or match
with the environment through techniques like SWOT analysis.
29
“Competing for the Future”-The book states..
If strategic architecture is the Brain, Strategic intent is the heart.
It should convey a sense of stretch –Current resource and
capabilities are not sufficient for the task.
Western Organizations traditionally follow the FIT approach.
Japanese organizations achieved success through LEVERAGE.
30
31
