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CHAPTER 2
THE BUSINESS VISION & MISSION


      Strategic Management:
          Concepts & Cases
           13th Edition
          Global Edition
           Fred David




                                Ch 2 -1
Ch 2 -2
Vision


  “The last thing IBM needs right now is a
  vision.” (July 1993)



  “What IBM needs most right now is a
  vision.” (March 1996)

   – Louis V. Gerstner, Jr., CEO, IBM Corporation

                                                    Ch 2 -3
Vision



 Agreement on the basic vision for which the
 firm strives to achieve in the long term is
 especially important.




                                               Ch 2 -4
Vision




 “What do we want to become?”




                                Ch 2 -5
Vision Statement Examples



 Tyson Foods’ vision is to be the
 world’s first choice for protein
 solutions while maximising
 shareholder value.



                                    Ch 2 -6
Vision Statement Examples




 General Motors’ vision is to be the world
 leader in transportation products and
 related services.




                                        Ch 2 -7
Vision Statement Examples



 PepsiCo’s responsibility is to continually
 improve all aspects of the world in which we
 operate – environment, social, economic –
 creating a better tomorrow than today.




                                            Ch 2 -8
Vision Statement Examples



 Dell’s vision is to create a company culture
 where environmental excellence is second
 nature.




                                                Ch 2 -9
Vision



         Clear Business
             Vision


                       Comprehensive
                      Mission Statement




                                     Ch 2 -10
Mission Statement


• Answers the question:
  • “What is our business?”


• Reveals:
  • what the organisation wants to be
  • whom we want to serve


                                        Ch 2 -11
Mission Statement


• An enduring statement of purpose that
  distinguishes one organisation from other
  similar enterprises
• A declaration of an organisation’s “reason for
  being”



                                              Ch 2 -12
MISSION STATEMENTS ARE ALSO
CALLED
• Creed statement
• Statement of purpose
• Statement of philosophy
• Statement of beliefs
• Statement of business principles
• A statement “defining our business”

                                        Ch 2 -13
Mission Statement Examples
Fleetwood Enterprises will lead the recreational vehicle and
manufactured housing industries in providing quality products
with a passion for customer-driven innovation. We will
emphasize training, embrace diversity and provide growth
opportunities for our associates and our dealers. We will lead
our industry in the application of appropriate technologies. We
will operate at the highest levels of ethics and compliance with
a focus on exemplary corporate governance. We will deliver
value to our shareholders, positive operating results and
industry-leading earnings.




                                                           Ch 2 -14
Mission Statement Examples
 We aspire to make PepsiCo the world’s premier
 consumer products company, focused on convenient
 foods and beverages. We seek to produce healthy
 financial rewards for investors as we provide
 opportunities for growth and enrichment to our
 employees, our business partners and the communities
 in which we operate. And in everything we do, we strive
 to act with honesty, openness, fairness and integrity.




                                                    Ch 2 -15
Mission Statement Examples

 Dell’s mission is to be the most successful
 computer company in the world at delivering
 the best customer experience in markets we
 serve. In doing so, Dell will meet consumer
 expectations of highest quality; leading
 technology; competitive pricing; individual and
 company accountability; best-in-class service
 and support; flexible customization capability;
 superior corporate citizenship; financial
 stability.

                                            Ch 2 -16
Mission Statement Examples

 Proctor & Gamble will provide branded
 products and services of superior quality and
 value that improve the lives of the world’s
 consumers. As a result, consumers will
 reward us with industry leadership in sales,
 profit, and value creation, allowing our people,
 our shareholders, and the communities in
 which we live and work to prosper.




                                             Ch 2 -17
Mission Statement Examples

 At L’Oreal, we believe that lasting business
 success is built upon ethical standards which
 guide growth and on a genuine sense of
 responsibility to our employees, our
 consumers, our environment and to the
 communities in which we operate.



                                            Ch 2 -18
VISION & MISSION
• Great benefits can be achieved if an
  organisation
  • Systematically revisits their vision and
    mission statement
  • Treats them as living documents
  • Considers them to be an integral part of the
    firm’s culture

                                             Ch 2 -19
Vision & Mission



Profit & vision are necessary to
effectively motivate a workforce




                                   Ch 2 -20
Vision & Mission


Shared vision creates a community of
interests




                                  Ch 2 -21
Developing Vision & Mission



A clear mission is needed before
alternative strategies can be
formulated and implemented




                                   Ch 2 -22
Developing Vision & Mission


Participation by as many managers as
possible is important in developing the
mission because through involvement
people become committed to an
organisation



                                     Ch 2 -23
STEPS TO DEVELOPING VISION &
MISSION STATEMENTS
1. Have managers read related articles
2. Have managers prepare a vision and
   mission statement for the organisation
3. Merge the documents into one and
   distribute
4. Gather feedback from managers
5. Meet to revise the final document

                                            Ch 2 -24
BENEFITS OF MISSION STATEMENTS
• Better financial results
• Unanimity of purpose
• Resource allocation
• Establishment of culture
• Focal point for individuals
• Establishment of work structure
• Basis of assessment and control
• Resolution of divergent views


                                    Ch 2 -25
Ch 2 -26
RESOLUTION OF DIVERGENT VIEWS

• A genuine decision must be based on
  divergent views to have a chance to be a right
  and effective decision


• Considerable disagreement over vision and
  mission statements can cause trouble if not
  resolved

                                             Ch 2 -27
VISION & MISSION STATEMENTS

•   Provide unity of direction
•   Promote shared expectations
•   Consolidate values
•   Project a sense of worth and intent
•   Affirm the company’s commitment to
    responsible action

                                          Ch 2 -28
Declaration of
Attitude
             Broad in scope

             Generate strategic alternatives

             Not overly specific

             Reconciles interests among
             diverse stakeholders

             Finely balanced between
             specificity & generality




                                                Ch 2 -29
Declaration of
Attitude


             Arouse positive feelings &
             emotions

             Motivate readers to action

             Generate favorable impression
             of the firm




                                              Ch 2 -30
Declaration of
Attitude


            Reflect future growth

            Provide criteria for strategy
            selection

            Basis for generating &
            evaluating strategic options

            Dynamic in nature




                                             Ch 2 -31
Mission & Customer
Orientation – Vern McGinnis
• Define what the organisation is
• Define what it aspires to be
• Limited to exclude some ventures
• Broad enough to allow for growth
• Distinguishes firm from all others
• Framework for evaluating activities
• Stated clearly – understood by all

                                        Ch 2 -32
MISSION & CUSTOMER ORIENTATION
• An effective mission statement:
  • Anticipates customer needs
  • Identifies customer needs
  • Provides product/service to satisfy needs
  • Identifies the utility of a firm’s products to
    its customers

                                                 Ch 2 -33
UTILITY OF FIRM’S PRODUCTS TO
CUSTOMERS
• Do not offer me things.
• Do not offer me clothes. Offer me attractive looks.
• Do not offer me shoes. Offer me comfort for my feet
  and the pleasure of walking.
• Do not offer me a house. Offer me security, comfort,
  and a place that is clean and happy.
• Do not offer me books. Offer me hours of pleasure and
  the benefit of knowledge.


                                                         Ch 2 -34
UTILITY OF FIRM’S PRODUCTS TO
CUSTOMERS
• Do not offer me CDs. Offer me leisure and the sound of
  music.
• Do not offer me tools. Offer me the benefits and the
  pleasure that come from making beautiful things.
• Do not offer me furniture. Offer me comfort and the
  quietness of a cozy place.
• Do not offer me things. Offer me ideas, emotions,
  ambience, feelings, and benefits.
• Please, do not offer me THINGS.
                                                         Ch 2 -35
Products or
                 Services             Markets
  Customers




                       Mission              Technology
Employees            Components


                                                Survival,
                                                Growth,
  Public                                         Profits
  Image
              Self-Concept    Philosophy




                                                      Ch 2 -36
Ch 2 -37
GROUP EXERCISE

• Create a vision and mission statement for
  Wesjet




                                              Ch 2 -38
FOR NEXT WEEK
• Readings 3 & 4 Strategic management
  Supplement for Southern Africa
• Assurance of Learning exercise 2A
• Assurance of Learning exercise 2C
• Create a career vision and mission statement
  that is personal to you
• Read Business Report, www.busrep.co.za
• Read CNBC, www.cnbc.com
• Read Knowledge to power your business,
  www.quickmba.com, specifically hierarchical
  levels to strategy, PEST analysis and SWOT
  analysis

                                                 Ch 2 -39

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Strategic Management Lecture 2

  • 1. CHAPTER 2 THE BUSINESS VISION & MISSION Strategic Management: Concepts & Cases 13th Edition Global Edition Fred David Ch 2 -1
  • 3. Vision “The last thing IBM needs right now is a vision.” (July 1993) “What IBM needs most right now is a vision.” (March 1996) – Louis V. Gerstner, Jr., CEO, IBM Corporation Ch 2 -3
  • 4. Vision Agreement on the basic vision for which the firm strives to achieve in the long term is especially important. Ch 2 -4
  • 5. Vision “What do we want to become?” Ch 2 -5
  • 6. Vision Statement Examples Tyson Foods’ vision is to be the world’s first choice for protein solutions while maximising shareholder value. Ch 2 -6
  • 7. Vision Statement Examples General Motors’ vision is to be the world leader in transportation products and related services. Ch 2 -7
  • 8. Vision Statement Examples PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today. Ch 2 -8
  • 9. Vision Statement Examples Dell’s vision is to create a company culture where environmental excellence is second nature. Ch 2 -9
  • 10. Vision Clear Business Vision Comprehensive Mission Statement Ch 2 -10
  • 11. Mission Statement • Answers the question: • “What is our business?” • Reveals: • what the organisation wants to be • whom we want to serve Ch 2 -11
  • 12. Mission Statement • An enduring statement of purpose that distinguishes one organisation from other similar enterprises • A declaration of an organisation’s “reason for being” Ch 2 -12
  • 13. MISSION STATEMENTS ARE ALSO CALLED • Creed statement • Statement of purpose • Statement of philosophy • Statement of beliefs • Statement of business principles • A statement “defining our business” Ch 2 -13
  • 14. Mission Statement Examples Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries in providing quality products with a passion for customer-driven innovation. We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers. We will lead our industry in the application of appropriate technologies. We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance. We will deliver value to our shareholders, positive operating results and industry-leading earnings. Ch 2 -14
  • 15. Mission Statement Examples We aspire to make PepsiCo the world’s premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity. Ch 2 -15
  • 16. Mission Statement Examples Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best-in-class service and support; flexible customization capability; superior corporate citizenship; financial stability. Ch 2 -16
  • 17. Mission Statement Examples Proctor & Gamble will provide branded products and services of superior quality and value that improve the lives of the world’s consumers. As a result, consumers will reward us with industry leadership in sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. Ch 2 -17
  • 18. Mission Statement Examples At L’Oreal, we believe that lasting business success is built upon ethical standards which guide growth and on a genuine sense of responsibility to our employees, our consumers, our environment and to the communities in which we operate. Ch 2 -18
  • 19. VISION & MISSION • Great benefits can be achieved if an organisation • Systematically revisits their vision and mission statement • Treats them as living documents • Considers them to be an integral part of the firm’s culture Ch 2 -19
  • 20. Vision & Mission Profit & vision are necessary to effectively motivate a workforce Ch 2 -20
  • 21. Vision & Mission Shared vision creates a community of interests Ch 2 -21
  • 22. Developing Vision & Mission A clear mission is needed before alternative strategies can be formulated and implemented Ch 2 -22
  • 23. Developing Vision & Mission Participation by as many managers as possible is important in developing the mission because through involvement people become committed to an organisation Ch 2 -23
  • 24. STEPS TO DEVELOPING VISION & MISSION STATEMENTS 1. Have managers read related articles 2. Have managers prepare a vision and mission statement for the organisation 3. Merge the documents into one and distribute 4. Gather feedback from managers 5. Meet to revise the final document Ch 2 -24
  • 25. BENEFITS OF MISSION STATEMENTS • Better financial results • Unanimity of purpose • Resource allocation • Establishment of culture • Focal point for individuals • Establishment of work structure • Basis of assessment and control • Resolution of divergent views Ch 2 -25
  • 27. RESOLUTION OF DIVERGENT VIEWS • A genuine decision must be based on divergent views to have a chance to be a right and effective decision • Considerable disagreement over vision and mission statements can cause trouble if not resolved Ch 2 -27
  • 28. VISION & MISSION STATEMENTS • Provide unity of direction • Promote shared expectations • Consolidate values • Project a sense of worth and intent • Affirm the company’s commitment to responsible action Ch 2 -28
  • 29. Declaration of Attitude Broad in scope Generate strategic alternatives Not overly specific Reconciles interests among diverse stakeholders Finely balanced between specificity & generality Ch 2 -29
  • 30. Declaration of Attitude Arouse positive feelings & emotions Motivate readers to action Generate favorable impression of the firm Ch 2 -30
  • 31. Declaration of Attitude Reflect future growth Provide criteria for strategy selection Basis for generating & evaluating strategic options Dynamic in nature Ch 2 -31
  • 32. Mission & Customer Orientation – Vern McGinnis • Define what the organisation is • Define what it aspires to be • Limited to exclude some ventures • Broad enough to allow for growth • Distinguishes firm from all others • Framework for evaluating activities • Stated clearly – understood by all Ch 2 -32
  • 33. MISSION & CUSTOMER ORIENTATION • An effective mission statement: • Anticipates customer needs • Identifies customer needs • Provides product/service to satisfy needs • Identifies the utility of a firm’s products to its customers Ch 2 -33
  • 34. UTILITY OF FIRM’S PRODUCTS TO CUSTOMERS • Do not offer me things. • Do not offer me clothes. Offer me attractive looks. • Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. • Do not offer me a house. Offer me security, comfort, and a place that is clean and happy. • Do not offer me books. Offer me hours of pleasure and the benefit of knowledge. Ch 2 -34
  • 35. UTILITY OF FIRM’S PRODUCTS TO CUSTOMERS • Do not offer me CDs. Offer me leisure and the sound of music. • Do not offer me tools. Offer me the benefits and the pleasure that come from making beautiful things. • Do not offer me furniture. Offer me comfort and the quietness of a cozy place. • Do not offer me things. Offer me ideas, emotions, ambience, feelings, and benefits. • Please, do not offer me THINGS. Ch 2 -35
  • 36. Products or Services Markets Customers Mission Technology Employees Components Survival, Growth, Public Profits Image Self-Concept Philosophy Ch 2 -36
  • 38. GROUP EXERCISE • Create a vision and mission statement for Wesjet Ch 2 -38
  • 39. FOR NEXT WEEK • Readings 3 & 4 Strategic management Supplement for Southern Africa • Assurance of Learning exercise 2A • Assurance of Learning exercise 2C • Create a career vision and mission statement that is personal to you • Read Business Report, www.busrep.co.za • Read CNBC, www.cnbc.com • Read Knowledge to power your business, www.quickmba.com, specifically hierarchical levels to strategy, PEST analysis and SWOT analysis Ch 2 -39