Chapter II Charting a Companys Direction

PART 1
Quotes by Famous
People
1. Sound strategy starts with having the right goal.

--Michael Porter，Professor and consultant
2. Purpose must be deliberately conceived and
chosen, and then pursued.
--Clayton Christensen-Professor and consultant
3. A vision without a strategy remains an illusion.
--Lee Bolman-Author and leadership consultant
Learning Objectives
1. Understand why it is critical for managers to have a clear strategic vision of where the
company needs to head.
2. Explain the importance of setting both strategic and financial objectives.
3. Explain why the strategic initiatives taken at various organizational levels must be tightly
coordinated.
4. Recognize what a company must do to execute its strategy proficiently.
5. Comprehend the role and responsibility of a company's board of directors in overseeing the
strategic management process.
Questions
Crafting and executing strategy are the heart and soul of managing a business
enterprise.
This chapter presents an overview of the ins and outs of crafting and executing
company strategies.
• The focus is on management's direction-setting responsibilities
-- charting a strategic course, setting performance targets, and
choosing .
We explain why strategy-making is a task for a company's entire
management team and which kinds of strategic decisions tend
to be made at which levels of management.
• The chapter concludes with a look at the roles and
responsibilities of a company's board of directors and how good
corporate governance protects shareholder interests and
promotes good management.
01
1 Developing a strategic vision
2 Setting objectives
3 Crafting a strategy
4 Executing
5 Monitoring, evaluating & initiating

CORE CONCEPT
A strategic inflection point is the point at which the

extent of industry change requires management to
consider changing the company's strategic vision.
see the Factors Shaping Decisions in the Strategy-Making,

Strategy-Execution Process
next
• Does sticking with the company's present strategic course
present attractive opportunities for growth and profltability?
• What kind of competitive forces are industry members
facing, and are they acting to enhance or weaken the
company's prospects for growth and profitability?
• What factors are driving Industry change, and what impact
on the company's prospects will they have?
• How are industry rivals positioned, and what strategic
moves are they likely to make next?
• What are the key factors of future competitive success,
and does the industry offer good prospects for attractive
profits for companies possessing those capabllities?
• Does the company have an appealing customer value proposition?
• What are the company's competitively important resources and
capabilities, and are they potent enough to produce a sustainable
competitive advantage?
• Does the company have sufficient business and competitive
strength to seize market opportunities and nullify extemal threats?
• Are the company's costs competitive with those of key rivals?
• Is the company competitively stronger or weaker than key rivals?
• Does the company have an appealing customer value
proposition?
• What are the company's competitively important
resources and capabilities, and are they potent enough to
produce a sustainable competitive advantage?
• Does the company have sufficient business and
competitive strength to seize market opportunities and
nulify external threats?
• Are the company's costs competitive with those of key
rivals?
• Is the company competitively stronger or weaker than key
rivals?
ILLUSTRATION
CAPSULE
How Well Do They Measure Up?

Examples of Strategic Visions--
(1)Whole Foods
(2)Keurig Dr. Pepper
(3)Nike
l Whole Foods Market is a dynamic leader in the quality food
business. We are a mission-driven company that aims to set the
standards of excellence for food retailers. We are building a
business in which high standards pemeate all aspects of our
company. Quality is a state of mind at Whole Foods MarketOur
Vision motto-Whole Foods,Whole People, Whole Planet-emphasizes that
Statement our vision reaches far beyondjust being a food retailer. Our
success in fulfilling our vision is measured by customer
of satisfaction,team member happiness and excellence, retum on
capital investment,improvement in the state of the environment
and local and larger community support.
l Our ability to instill a clear sense of interdependence among our
various stakeholders (the people who are interested and benefit
from the success of our company) is contingent upon our
effortsto communicate more often, more openly.and more
compassionately. Better communication equals better
understanding and more trust.
Analysis
l Effective Elements
l Forward-looking
l Graphic
l Focused
l Makes good business sense
l Shortcomings
l Long
l Not memorable
Keurig Dr. Pepper
Effective
Vision Statement Shortcomings
Elements
A leading producer
and distributor of hot
and cold beverages l Easy to l Not distinctive
to satisfy every communicate l Not forward-
consumer need, l Focused looking
anytime and
anywhere.
Nike
Effective
Vision Statement Shortcomings
Elements
NIKE, Inc. fosters a culture

of invention. We create
products, services and
experiences for today's l Forward-looking l Vague
athlete' while solving
l Flexible l Not focused
problems for the next
generation.
If you have a body，you
are an athlete.
ASSURANC OF
LEARNINGE
Exercise
based on LO1 & Table2-1

Using the information in Table 2.1, critique the adequacy and merit of the following
vision statements, listing effective elements and shortcomings. Rank the vision
statements from best to worst once you complete your evaluation.
LO5 Execerise
LO5: Comprehend the role and responsibility of a company's

board of directors in overseeing the strategic management
process.
Based on the information provided in Illustration Capsule
2.4( refer to our wechat group), describe the ways in which
Volkswagen did not fulfill the requirements of effective
corporate governance. In what ways did the board of
directors sidestep its obligations to protect shareholder
interests? How could Volkswagen better select its board of
directors to avoid mistakes such as the emissions scandal in
2015?
EXERCISES
FOR
SIMULATION
For the Final big group project

Questions for Simulation
1. Which of the five stages of the strategy formulation, strategy execution process
apply to your company in the simulation? (Ref. to LO2-5)
2. Meet with your co-managers and prepare a strategic vision statement for your
company. It should be at least one sentence long and no longer than a brief
paragraph.When you are finished, check to see if your vision statement meets the
conditions for an effectively worded strategic vision set forth in Table 2.1. If not,
then revise it accordingly. (Ref. to LO2-1)
3. What would be a good slogan that captures the essence of your strategic vision
and that could be used to help communicate the vision to company personnel,
shareholders, and other stakeholders? (Ref. to LO2-2)
4. What are your company's financial objectives? What are your company's strategic
objectives? What are the three to four key elements of your company's strategy?
(Ref. to LO2-3)
5. The strategy execution process for your company in the business simulation
includes which principle aspects? (Ref. to LO2-4)

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PART 1

1. Sound strategy starts with having the right goal.

5 Monitoring, evaluating & initiating

A strategic inflection point is the point at which the

see the Factors Shaping Decisions in the Strategy-Making,

How Well Do They Measure Up?

NIKE, Inc. fosters a culture

based on LO1 & Table2-1

LO5: Comprehend the role and responsibility of a company's

For the Final big group project

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