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1.3

1.4

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Strategy: A course of action, including the specification of resources required, to achieve a specific objective. Is a long term planning Levels of strategy: Corporate Strategy: depends upon purpose, scope of organisation, merger & acquisition decisions, closure of business unit, relation with government and key stakeholders, and development of policies. Business Strategy: relates with Strategic business unit approaches, concern with marketing issues i.e 4Ps, make sure about SBU performance. Functional Strategy: relates to organisation operations, like sales, production, purchasing, finance, day to day operations, helps the SBU. Model of the Rational Strategy Process: Consisting of following major steps. 1. Analysis of current position 2. Mission, Objectives and Goals 3. Link b/w Mission, Objectives and Goals 4. Goal Structure 5. External Environmental and competitive Analysis PEST Analysis Porter Five Forces 6. Internal Analysis and Position Audit Value Chain Analysis SWOT Analysis 7. Formulation of Strategic Options 8. Implementation of Strategies 9. Monitor, Review and Analysis Mission Statement, purpose in line with values and expectations of stakeholders, reflects with core value. Role of Mission Statement; help at four places in the rational model. 1. Mission and Objectives; provides the long term framework 2. Corporate Appraisal; consider only those strengths, weakness, opportunities which can affect the mission 3. Strategic Evaluation; Evaluation of different options must be based on mission. 4. Review & Control; Key targets (division & function) should be related to mission. Purpose of Mission Statement (Hooley et al 1992) 1. Provide a basis for planning decision 2. Help in translating purpose and direction into objectives 3. Provide a purpose of different stakeholders. 4. Establish Goals and ethics 5. Enhance understanding & support from external stakeholders. Link B/w Mission, Objectives and Goals Strategic objectives and goals translate mission into strategic milestone Objectives will possess four characteristics 1. A Precise formulation of attributes 2. An Index or measure for progress 3. A target 4. A time-frame Objectives must be SMART (Specific, Measurable, Attainable, Relevant, Time bound) The Goal Structure, Objectives is having number of functions or (PRIME Functions) o Planning, provide the framework for planning o Responsibilities, being as responsibilities on division manager, communicate them about activities, projects, and output. o Integration, senior management co-ordination within the firm. o Motivation, Objectives must be motivated with context instead of only financial grounds. o Evaluation, evaluation of objective achievement, like by setting ROI and the monitoring after actual result. External Environment and Competitive Analysis.

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