Unit 3 STRATEGY FORMULATION

Vision

 Answers the question “what do you want to become?”

CHARACTERISTICS OF A GOOD VISION STATEMENT

1. Graphic – the vision projects to the market the kind of company that
the management wants to create and the kind of company it aspires
to be.
2. Directional - it describes the path where the company wants to go
and presents specific plans and purpose to move forward in the
future.
3. Focused – the vision is very specific so managers are properly guided
on what to do in terms of resources and strategies.
4. Flexible – although the vision should be focused, it allows room for
managers to change based on market situations, technological
advancements, and customer preferences.
5. Feasible – a vision is achievable and realistic.
6. Desirable - the vision is clear on why the path is practically sensible
and serves the interests of members in the long run.
7. Easy to communicate and understand – the vision is easy to
understand, articulated, and can be simplified into a powerful slogan.
8. Brief but comprehensive –
9. Stirs excitement -

Vision Statement

Bicol University

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BUSINESS POLICY AND STRATEGY: Strategy Formulation

Developing the MISSION

Mission

 Answer the questions “who are you? and “what do you do?”
 Tells the reason of the organization’s existence

Rules of thumb in creating MISSION STATEMENTS

 Describe who, what and where of the organization.

 Be brief but comprehensive
 Choose simple descriptive words which are easy to understand
 Avoid how statements

Developing the GUIDING PRINCIPLES

 It represents the organization’s value system

 A concept that applies to all levels

Passion, Excellence, Professionalism, Service and Integrity.

BUSINESS POLICY AND STRATEGY: Strategy Formulation

THE FIVE POWER P’s

1. Position

2. Power

3. Pace

4. Potential

5. Performance

PORTER’S GENERIC STARTEGIES

 Cost Approach
 Differentiation Approach
 Focus Approach

POWER STARTEGIES

 Horizontal Integration

 Vertical Integration

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ADAPTIVE STRATEGIES

 Prospector Approach

 Defender Approach

 Analyzer Approach

BUSINESS POLICY AND STRATEGY: Strategy Formulation

ADAPTIVE STRATEGIES

Building Blocks Hub and Spokes

Molecular Compound Chess Game

Amoeba Niching

Concentric Circle Leaping Frog

BUSINESS POLICY AND STRATEGY: Strategy Formulation

ESSENTIALS OF POTENTIAL STARTEGIES

 Transferability

 Competitive Dominance

 Uniqueness

 Substitutability

 Durability

GROWTH STRATEGIES

 Diversification

 Market Development

 Product Development

 Market Penetration

BALANCED SCORECARD

 A system that measures the organization’s progress in accomplishing its strategic objectives.

4 Implementing strategies

1. Developing a clear-cut strategy.

2. Communicating the strategic objectives.
3. Planning strategies.
4. Monitoring strategic implementation.

BUSINESS POLICY AND STRATEGY: Strategy Formulation

4 Basic Processes

FINANCIAL

BUSINESS
STRATEGY CUSTOMER
PROCESS

LEARNING
& GROWTH

BUSINESS POLICY AND STRATEGY: Strategy Formulation