ategic Intent
■ TABLE OF CONTENTS
1. Concept of Strategic Intent Pg 3
2. Stretch, Leverage and Fit Pg 4
3. Vision Pg 5
4. Mission and Purpose Pg 6
5. Business Definition Pg 8
6. Business Model Pg 9
7. Objectives and Goals Pg 11
8. Stakeholders in Business & Their Roles Pg 12
9. Quick Revision Summary Pg 14
1. ■ Concept of Strategic Intent
Strategic Intent is a company's burning desire to achieve a big, ambitious goal in the future —
even when current resources may seem insufficient. It is about setting a challenging long-term
dream that pushes the entire organisation to work harder, think bigger, and perform better.
Who Introduced This Concept?
• Gary Hamel and C.K. Prahalad introduced the concept of Strategic Intent in their famous
1989 article in the Harvard Business Review.
• They argued that most Western companies were too focused on fitting their strategies to
existing resources. Instead, companies should set ambitious goals that stretch beyond
current capabilities.
■ Example: When Komatsu (a Japanese company) wanted to beat the American giant Caterpillar,
their strategic intent was simply: 'Encircle Caterpillar'. This one phrase united every employee
toward a single mission — and they achieved it!
Key Features of Strategic Intent:
1. Long-Term & Ambitious
• Strategic intent is set for the DISTANT future — usually 10 to 20 years. It is not a small target;
it is a BIG dream.
■ Example: Honda's strategic intent in the 1970s: 'We will destroy Yamaha.' They wanted to
become the #1 motorcycle company in the world.
2. Consistent & Stable
• The intent does not keep changing. Even if the method changes, the dream stays the same. It
gives direction and stability.
■ Example: Apple's consistent intent: Always create the most innovative, beautifully designed
technology products in the world.
3. Obsessive Focus
• Every employee in the company is focused on achieving the strategic intent. It becomes the
company's identity.
■ Example: NASA in the 1960s: Every single person — from scientists to janitors — was focused
on one goal: 'Put a man on the moon.'
4. Motivates & Energises
• A powerful strategic intent creates excitement and motivates employees to go beyond their
limits.
■ Example: Reliance Jio's intent: 'Digital India for every Indian.' This motivated thousands of
employees to build the largest telecom network in India.
5. Sets Direction
• It tells the company WHERE it is going, even if the exact path (strategy) changes along the
way.
■ Example: Amazon's intent: 'To be the Earth's most customer-centric company.' This direction
guides every single Amazon decision.
■ Key Point: Strategic Intent = Big Dream + Burning Desire + Focused Energy. It tells a company:
'This is where we MUST reach, no matter what!'
2. ■ Stretch, Leverage and Fit
Hamel and Prahalad gave us three very important ideas connected to Strategic Intent: Stretch,
Leverage, and Fit. These three concepts explain HOW a company can achieve big goals even
with limited resources.
■ STRETCH
■ Definition: Stretch means setting goals that are BEYOND your current resources and
capabilities. It is about aiming higher than what seems possible right now — and then working
hard to close that gap.
Think of it like this:
■■ Fitness Analogy: A person who can only do 10 push-ups sets a goal of 100 push-ups. That
gap between 10 and 100 is the STRETCH. It forces them to train harder every day.
• Without stretch: Companies set easy targets → employees get comfortable → no innovation
→ company falls behind.
• With stretch: Companies set challenging targets → employees think creatively → innovation
happens → company grows.
• Stretch creates a gap between what the company HAS now and what it WANTS to achieve.
This gap is the engine of growth.
■ Example: In 1961, US President Kennedy said: 'We will put a man on the Moon by the end of
the decade.' NASA had NO idea how to do it at that time. That was the ultimate STRETCH goal —
and they achieved it in 1969!
■ LEVERAGE
■ Definition: Leverage means making the MOST out of your existing resources. Instead of
always asking for more money or more people, you use what you already have in smarter, more
creative ways.
■ Simple Analogy: A lever allows a small force to lift a heavy object. Similarly, leverage in
business means using a small resource to achieve a BIG result.
Ways to Leverage Resources:
• Concentrate: Focus all resources on the most important priorities.
• Accumulate: Keep learning and adding new knowledge and skills over time.
• Complement: Combine different resources together so they create more value.
• Conserve: Avoid wasting resources — use them efficiently.
• Recover: Get returns from investments quickly so resources can be reused.
■ Example: Honda entered the US motorcycle market with very little money. Instead of spending
on factories first, they LEVERAGED their existing small engines technology. They started with
small, affordable bikes (no competitors made those), became popular, earned money, and then
expanded to bigger bikes.
■ FIT
■ Definition: Fit means making sure your strategy matches your available resources and
external environment. It is about alignment — your capabilities fit the opportunities you pursue.
■ Shoe Analogy: Fit is like wearing the right size shoes. If the shoe is too big (strategy too
ambitious for resources), you stumble. If too small (underusing resources), you're uncomfortable.
The PERFECT fit gives best performance.
• Strategic Fit = Company's Strengths match the Market's Opportunities.
• Hamel & Prahalad said: Fit ALONE is not enough. Companies that only focus on fit become
too conservative and fall behind innovative competitors.
• The best approach = Fit + Stretch + Leverage together.
■ Example: A small bakery (limited resources) should fit its strategy with its capabilities — it
should NOT try to compete with a giant like Britannia by opening 500 outlets. Instead it fits its
strategy: focus on a local area, make premium handmade cakes, and charge higher prices. That is
good strategic fit.
Stretch vs Leverage vs Fit — Quick Comparison:
Set goals BEYOND current resources. Create an aspirational gap that drives
Stretch
the company forward.
Use existing resources MORE smartly and creatively to achieve more with
Leverage
less.
Match your strategy to your resources and the environment. Be realistic about
Fit
capabilities.
Best companies do ALL THREE — they dream big (Stretch), use resources
Together
smartly (Leverage), and stay grounded in reality (Fit).
3. ■ Vision
A Vision Statement describes what a company wants to BECOME in the future. It is the
company's long-term dream — where it sees itself after 10, 20, or even 50 years. It inspires and
gives direction to everyone in the organisation.
■ Simple Definition: Vision = 'What do we WANT TO BE in the future?' It is the company's
dream.
Characteristics of a Good Vision Statement:
Characteristic Meaning
Future-Oriented It talks about what the company will BECOME — not what it is today.
Inspiring & Motivating It should excite employees and stakeholders about the future.
Clear & Understandable Anyone — even a new employee — should understand it easily.
Achievable (but
It should be a big dream, but not completely impossible.
ambitious)
It should reflect the company's own identity — not copy someone
Unique
else's vision.
Vision does not change frequently. It remains stable over a long
Timeless
period.
Famous Vision Statements:
Company Vision Statement
To organize the world's information and make it universally accessible and
Google
useful.
To empower every person and every organization on the planet to achieve
Microsoft
more.
Amazon To be Earth's most customer-centric company.
To create the most compelling car company of the 21st century by driving the
Tesla
world's transition to electric vehicles.
To be a globally respected corporation that provides best-of-breed business
Infosys
solutions.
Tata Group To improve the quality of life of the communities we serve globally.
Importance of Vision:
• Gives Direction: Tells everyone in the company where they are heading.
• Motivates Employees: People work harder when they believe in a bigger purpose.
• Helps in Decision Making: When in doubt, managers ask: 'Does this align with our vision?'
• Attracts Investors & Talent: A compelling vision attracts the best people and investors.
• Creates Unity: All departments work toward the same future goal.
■ Key Point: Vision is like the NORTH STAR for a company — it may seem far away, but it always
guides the direction of travel.
4. ■ Mission and Purpose
What is Mission?
A Mission Statement describes WHY the company exists TODAY — what it does, for whom it
does it, and how it does it. While Vision is about the future, Mission is about the PRESENT.
■ Simple Definition: Mission = 'What do we DO today and WHY do we exist?' It is the company's
current purpose.
What Does a Mission Statement Tell Us?
Question the Mission Answers What it Covers
What does the company DO? Products or services offered
WHO are its customers? Target market or audience
WHAT values guide it? Core values and principles
HOW does it operate? The unique way it serves customers
WHY does it exist? The fundamental purpose or reason
Famous Mission Statements:
Company Mission Statement
To organize the world's information and make it universally accessible and
Google
useful. (Same as Vision — sometimes they overlap!)
Tesla To accelerate the world's transition to sustainable energy.
To give people the power to build community and bring the world closer
Facebook/Meta
together.
Nike To bring inspiration and innovation to every athlete in the world.
McDonald's To be our customers' favourite place and way to eat and drink.
Infosys To achieve our objectives in an environment of fairness, honesty, and courtesy.
Vision vs Mission — Key Differences:
<b>Vision</b> <b>Mission</b>
Future-focused (where we WANT TO BE) Present-focused (what we DO today)
Describes the dream Describes the purpose
Inspires and motivates Guides day-to-day actions
Rarely changes Can be updated as business evolves
Example: 'Become world's best airline' Example: 'Provide safe, comfortable, on-time flights'
What is Purpose?
Purpose goes even deeper than Mission. It is the company's fundamental reason for existing —
beyond just making money. It answers the question: 'Why should the world care that we exist?'
Purpose is about the IMPACT on society.
■ Example: Patagonia (clothing brand) Purpose: 'We're in business to save our home planet.'
They donate 1% of all sales to environmental causes. Their PURPOSE goes beyond selling
jackets — it is about saving the environment.
■ Example: Tata Group Purpose: 'Improving the quality of life of the communities we serve.' That
is why Tata builds hospitals, schools, and townships — not just for profit.
■ Key Point: Vision = Where we want to GO | Mission = What we DO today | Purpose = WHY we
exist for society. All three must align for a company to be truly great.
5. ■■ Business Definition
Business Definition means clearly defining WHAT business you are in. It answers: 'What
exactly does our company do? Who are our customers? What needs do we satisfy?' A clear
business definition prevents a company from drifting in the wrong direction.
Derek Abell's 3-Dimensional Model of Business Definition:
Professor Derek Abell said that a business should be defined using THREE dimensions:
■ DIMENSION 1: Customer Groups
WHO are we serving? — Which specific group of customers does the business target?
■ Example: A children's clothing company serves 'parents with children aged 0–12 years'. An
MBA college serves 'working professionals who want to advance their career'.
■ DIMENSION 2: Customer Functions / Needs
WHAT need do we satisfy? — What problem are we solving for the customer? What benefit do we
provide?
■ Example: Domino's satisfies the need for 'convenient, fast, and tasty food at home'. A gym
satisfies the need for 'fitness, health, and weight management'.
■■ DIMENSION 3: Technology / How we do it
HOW do we satisfy the need? — What technology, method, or approach do we use to serve the
customer?
■ Example: Domino's uses 'an app + delivery network + standardised recipes'. A gym uses
'equipment + trained trainers + fitness programs'.
■ Remember: A company that defines its business too NARROWLY misses opportunities. A
company that defines it too BROADLY loses focus. The right definition is key!
Why is Business Definition Important?
• Avoids Marketing Myopia: Theodore Levitt warned that companies focusing only on their
PRODUCT (not the need) will fail. Railways lost to cars because they defined themselves as
'railroad business' not 'transportation business'.
• Identifies Real Competitors: Netflix competes not just with Amazon Prime but with ALL forms
of entertainment — games, YouTube, even sleep (said Netflix CEO)!
• Opens New Opportunities: Amazon defined itself as 'the everything store' not just a
'bookshop' — this opened doors to cloud computing (AWS), music, video, and more.
• Guides Strategy: A clear definition tells managers what to invest in and what to ignore.
6. ■ Business Model
A Business Model describes HOW a company creates value, delivers it to customers, and
earns money from it. It is like a blueprint that shows how the company works — how it makes
products/services, who it sells to, and how it generates profit.
■ Simple Analogy: Think of a business model like a recipe. The recipe tells you: What ingredients
you need, how to prepare them, and what the final dish will be. A business model tells you: what
you offer, to whom, and how you make money.
Key Components of a Business Model:
1. Value Proposition
• What it means: What VALUE does the company offer to customers? Why should customers
choose YOU over competitors?
■ Example: Ola's value proposition: 'Affordable, safe, and convenient rides available at the tap of
a button.'
2. Customer Segments
• What it means: WHO are the target customers? Which groups of people does the company
serve?
■ Example: Starbucks targets: Urban professionals, students, and coffee enthusiasts who want a
premium experience.
3. Revenue Streams
• What it means: HOW does the company EARN MONEY? What do customers pay for?
■ Example: Netflix earns through monthly subscription fees. Google earns through advertising.
Apple earns through product sales + App Store commission.
4. Key Resources
• What it means: What RESOURCES does the company need to operate? (People, technology,
money, brand)
■ Example: Uber's key resource = Its App + Driver network + Customer base. Without these, Uber
cannot function.
5. Key Activities
• What it means: What KEY ACTIVITIES must the company perform every day to deliver value?
■ Example: Amazon's key activities = Managing warehouses, running the website, handling
deliveries, and maintaining the app.
6. Key Partnerships
• What it means: Who are the KEY PARTNERS that help the company work? (Suppliers,
distributors)
■ Example: McDonald's partners with local farmers for vegetables and meat, and with real estate
firms for restaurant locations.
7. Cost Structure
• What it means: What are the main COSTS of running the business? Where does the money
go?
■ Example: Airlines' main costs = Fuel, pilot salaries, aircraft maintenance, and airport fees.
8. Customer Relationships
• What it means: How does the company BUILD and MAINTAIN its relationship with
customers?
■ Example: Amazon maintains customer relationships through: fast delivery, easy returns,
personalized recommendations, and Prime membership.
9. Channels
• What it means: How does the company REACH and DELIVER to its customers?
■ Example: Flipkart reaches customers through: website, mobile app, and email/SMS marketing.
Famous Business Models — Examples:
Business Model How it Works Example
Customers pay regularly
Subscription Model Netflix, Spotify, Amazon Prime
(monthly/yearly). Predictable income.
Basic version is FREE. Advanced LinkedIn, Dropbox,
Freemium Model
features cost money. Grammarly
Platform connects buyers and sellers.
Marketplace Model Amazon, Flipkart, Ola, Airbnb
Earns commission.
Service is FREE for users. Revenue
Advertising Model Google, Facebook, YouTube
comes from advertisers.
Company licenses its brand and
Franchise Model McDonald's, Subway, DTDC
system to local operators.
Direct-to-Consumer Company sells directly to customers, Boat Lifestyle, Mamaearth,
(D2C) cutting out middlemen. Sugar Cosmetics
7. ■ Objectives and Goals
After setting Vision and Mission, a company must define GOALS and OBJECTIVES — the
specific targets it wants to achieve. These convert the big dream into concrete, measurable steps.
Goals vs Objectives:
Goals Objectives
Broad, general statements of what the company Specific, measurable targets that support the
wants to achieve goals
Long-term oriented Short to medium term
Qualitative (not always measured) Quantitative (measured with numbers)
Example: 'Achieve patient satisfaction score of
Example: 'Become the best hospital in India'
95% by Dec 2025'
Example: 'Increase market share from 15% to
Example: 'Grow our market share'
20% in 2 years'
SMART Objectives Framework:
Good objectives must be SMART:
Lette
Stands For Meaning Example
r
Clearly defined — not vague.
Not: 'Improve sales.' Better:
Specific What exactly do you want to
S 'Increase iPhone 15 sales in India.'
achieve?
Can be tracked with numbers.
Not: 'Get more customers.' Better:
Measurable How will you know you've
M 'Get 10,000 new customers.'
achieved it?
Realistic and possible with
Not: 'Become #1 in the world in 3
Achievable available resources. Not
A months.' That is unrealistic.
impossible.
Connected to the company's
A hospital's objective should relate
Relevant vision and mission. Makes
R to health, not fashion!
strategic sense.
Not: 'Someday we will expand.'
Has a clear deadline. When must
Time-bound Better: 'Expand to 5 cities by
T it be achieved by?
December 2026.'
Types of Objectives:
• Financial Objectives: Related to money — profit, revenue, ROI. Example: 'Achieve 15% net
profit margin this year.'
• Market Objectives: Related to customers and market share. Example: 'Be the top-selling car
brand in India.'
• Growth Objectives: Expansion goals. Example: 'Open 50 new stores in Tier-2 cities by 2026.'
• Social/CSR Objectives: Impact on society. Example: 'Plant 1 million trees by 2027.'
• Operational Objectives: Efficiency targets. Example: 'Reduce production cost by 10% in 1
year.'
■ Example: Zomato's Objective Example: 'Deliver 50% of all orders in under 20 minutes in top 10
cities by 2025.' This is Specific (top 10 cities, 20 mins), Measurable (50% orders), Achievable (with
Zomato's network), Relevant (to food delivery mission), and Time-bound (by 2025).
8. ■ Stakeholders in Business & Their Roles in Strategic
Management
A Stakeholder is any person or group who is affected by or can affect a company's decisions
and activities. They have an 'interest' (stake) in what the company does. Strategic management
must consider ALL stakeholders — not just the owners.
■ Simple Analogy: Think of a company as a cricket team. The stakeholders are: players
(employees), coach (managers), team owner (shareholders), fans (customers), BCCI
(government), sponsors (investors), and media. All of them have a stake in the team's
performance!
Types of Stakeholders:
Internal Stakeholders — People INSIDE the company:
■ Shareholders / Owners
Who they are: People who OWN the company by buying shares. They invest money and expect
returns.
Role in Strategic Management:
• They SET the overall direction and approve major strategies.
• They want: profits, dividends, and growth in share value.
• Their power: Can hire or fire the CEO; approve or reject big decisions.
• Example: Mukesh Ambani is the largest shareholder of Reliance Industries — his vision
shapes the entire company's strategy.
■ Board of Directors
Who they are: A group of senior people elected by shareholders to GOVERN the company.
Role in Strategic Management:
• They approve the company's strategy and major investments.
• They monitor the CEO's performance.
• They protect shareholders' interests.
• Example: The Tata Sons Board approves whether Tata Group should enter a new industry or
acquire another company.
■■■ Top Management (CEO, CFO, etc.)
Who they are: The most senior executives who RUN the company day-to-day.
Role in Strategic Management:
• They FORMULATE the strategy (what to do).
• They IMPLEMENT the strategy (how to do it).
• They make major decisions on resources, expansions, partnerships.
• Example: Sundar Pichai (CEO of Google) decides Google's AI strategy.
■ Employees & Workers
Who they are: People who actually DO the work — from managers to factory workers.
Role in Strategic Management:
• They IMPLEMENT the strategy at the ground level.
• Their skills, motivation, and commitment determine strategy success.
• Unhappy employees can cause strategy to FAIL.
• Example: Jio's 40,000+ employees laid optical fibre cables across India, implementing the
strategy of nationwide 4G coverage.
External Stakeholders — People OUTSIDE the company:
■ Customers
Who they are: People who BUY the company's products or services.
Role in Strategic Management:
• Their needs and preferences DRIVE the strategy.
• Customer feedback shapes product development and pricing.
• If customers are unhappy, the whole strategy fails.
• Example: When customers demanded electric scooters, Ola Electric launched its EV scooter
— driven entirely by customer demand.
■ Suppliers
Who they are: Companies or individuals who provide RAW MATERIALS or services to the company.
Role in Strategic Management:
• Their reliability affects the company's ability to produce and deliver.
• Strong supplier relationships = strategic advantage.
• Example: Samsung supplies screens to Apple for iPhones — a key strategic supplier
relationship.
■ Investors & Creditors (Banks)
Who they are: People or institutions who LEND MONEY or invest in the company.
Role in Strategic Management:
• They fund the company's strategic plans and expansions.
• They expect returns on investment and timely repayment.
• A company needs investor approval before major strategic changes.
• Example: Paytm raised billions from investors (Alibaba, SoftBank) to fund its expansion
strategy.
■■ Government & Regulators
Who they are: The government, regulatory agencies, and legal bodies that set the RULES for
business.
Role in Strategic Management:
• Laws and regulations shape what strategies are possible.
• Companies must comply with tax laws, environmental laws, labour laws.
• Example: When the Indian government banned Chinese apps (like TikTok), it forced
companies to change their digital strategies. Indian apps like Moj benefited.
■ Community & Society
Who they are: The general public and local communities where the company operates.
Role in Strategic Management:
• A company's actions affect the community (pollution, employment, etc.).
• Companies with poor CSR (Corporate Social Responsibility) face boycotts.
• Example: When Vedanta wanted to expand its copper plant in Thoothukudi, local community
protests forced the government to shut it down — showing community power over strategy.
■ Media
Who they are: Journalists, news channels, and social media that REPORT on the company.
Role in Strategic Management:
• Media can make or break a company's reputation.
• Bad press can kill a product launch or strategy.
• Example: When Maggi was found to have unsafe lead levels, media coverage forced Nestle to
withdraw Maggi from Indian markets — a massive strategic setback.
■ Competitors
Who they are: Other companies in the same industry.
Role in Strategic Management:
• Competitors' actions directly influence strategy.
• A competitor's new product can make your strategy obsolete.
• Example: When Jio launched free data in 2016, it forced Airtel, Vodafone, and Idea to
completely rethink their pricing strategy.
■ Key Point: Successful strategic management requires BALANCING the needs of ALL
stakeholders. A strategy that benefits shareholders but harms employees, customers, or society is
NOT truly successful in the long run.
9. ■ Quick Revision Summary – Unit 2
A company's big, ambitious, long-term dream that pushes it to go
Strategic Intent
beyond current resources. Introduced by Hamel & Prahalad.
Setting goals BEYOND current resources. Creates an aspiration gap
Stretch
that drives innovation. Example: NASA putting man on moon.
Using existing resources MORE smartly to achieve big goals with less.
Leverage
Use what you have wisely.
Making strategy match your resources and environment. Being realistic
Fit
while pursuing goals.
What the company wants to BECOME in the future. Long-term dream.
Vision
Example: Google — 'organise world's information'.
WHY the company exists TODAY. What it does and for whom.
Mission
Example: Tesla — 'accelerate world's transition to sustainable energy'.
Deeper reason for existence — impact on society. Example: Tata —
Purpose
'improve quality of life of communities'.
Clearly defining what business you are in using Abell's 3 dimensions:
Business Definition
Customer Groups + Customer Needs + Technology.
How a company creates, delivers, and earns money from value.
Business Model
Components: value proposition, revenue streams, cost structure, etc.
Broad, general targets the company wants to achieve. Qualitative and
Goals
long-term.
Specific, measurable, time-bound targets. Must be SMART (Specific,
Objectives
Measurable, Achievable, Relevant, Time-bound).
Anyone affected by or who can affect the company. Internal:
Stakeholders shareholders, board, management, employees. External: customers,
government, suppliers, media, competitors.
■ Exam Tips: 1) Always give real examples — Indian companies preferred (Tata, Jio, Infosys,
Reliance). 2) Know the difference between Vision, Mission, and Purpose. 3) Remember Abell's 3
dimensions and Mintzberg's 5Ps. 4) For stakeholders, give one example each for internal and
external.
Unit 2 – Strategic Intent | Detailed Notes | Strategic Management