Strategy Formulation

4.1 Vision and Mission

Vision: A long-term, inspirational aspiration of where the organisation wants to be. Short, memorable, aspirational.

• ISRO Vision: "Harness space technology for national development while pursuing space science research and planetary exploration"
• Infosys Vision: "To be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best-in-class people"

Mission: Describes the organisation's current purpose — what it does, for whom, and how. More specific than vision.

• Mission should answer: What is our business? Who is our customer? What do they value? What should our business be?
• Peter Drucker (1973): "What is our business?" is the most important question management can ask.

Objectives translate mission into measurable targets. SMART criteria:

• Specific: Clear, precise
• Measurable: Quantifiable
• Achievable: Realistic
• Relevant: Aligned to mission
• Time-bound: Deadline set

4.2 Porter's Generic Competitive Strategies

Michael Porter (1980) identified three generic strategies for achieving sustainable competitive advantage:

Strategy	Mechanism	Indian Example
Cost Leadership	Become the lowest-cost producer in the industry without sacrificing quality	DMart (Avenue Supermarts) — EDLP (Every Day Low Prices), high inventory turnover; Jio — aggressive price disruption
Differentiation	Offer unique products/services that customers value and will pay a premium for	Taj Hotels (luxury hospitality); Apple iPhone (premium ecosystem); Tanishq (trusted gold jewellery certification)
Focus — Cost Focus	Low-cost strategy directed at a narrow segment	Air Deccan (low-cost aviation for price-sensitive segment, 2003-2008)
Focus — Differentiation Focus	Differentiation within a narrow segment	Fabindia (premium Indian ethnic products for urban educated consumers)

Stuck in the middle: Firms that do not commit clearly to any of these strategies often perform poorly — neither the lowest cost nor meaningfully differentiated, they struggle to attract or retain customers.

4.3 BCG Growth-Share Matrix

The BCG Matrix classifies strategic business units on two axes: market growth and relative market share.

Quadrant	Market Growth	Market Share	Strategic Implication	Example
Stars	High	High	Invest heavily and defend share	Reliance Jio (telecom)
Cash Cows	Low	High	Harvest cash and use it to fund Stars	HUL's Surf Excel (detergents)
Question Marks	High	Low	Invest selectively or divest	Early-stage electric vehicle business
Dogs	Low	Low	Divest or liquidate	Landline telephone segment

4.4 Ansoff's Product-Market Growth Matrix (1957)

Igor Ansoff proposed four growth strategies based on products (existing/new) × markets (existing/new):

Strategy	Products	Markets	Risk Level	Example
Market Penetration	Existing	Existing	Lowest	Colgate increasing toothbrush usage frequency through campaigns
Market Development	Existing	New	Medium	Maruti Suzuki entering African markets with existing models
Product Development	New	Existing	Medium	HDFC launching new credit card variants for existing customers
Diversification	New	New	Highest	Reliance entering e-commerce (JioMart) from telecom/retail base

Related vs. unrelated diversification:

• Related (Concentric): New products sharing technological or marketing links — e.g., ITC diversifying from cigarettes into hotels, FMCG, agribusiness, and paper
• Unrelated (Conglomerate): No logical connection — e.g., Tata Group operating in steel, automobiles, IT (TCS), salt, hotels, airlines

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