NOTES

MISSION VISION STATEMENTS

The vision statement focuses on TOMORROW; to motivate.

The mission statement focuses on TODAY; to inform.

A mission then explains the tasks that the company will do in order to achieve its ultimate aim, which is the
vision.

Mission statements provide workers with an explicit goal and can improve their performance at work.
Potential investors and other interested parties may also utilize the vision statement to describe the
company's ambitions

IMPORTANCE

 give employees a feeling of identity

 bringing everyone together and ensuring that everyone is working toward the same goal
 directing an organization's resources toward reaching a successful future.
 The vision statement makes sure that all actions are appropriately in line with what the organization
intends to accomplish. The mission statement gives the company a clear and effective framework for
decision-making.

FUNCTIONS

 they inform strategy creation

 explain the organization's purpose to stakeholders
 help create measurable goals and objectives that can be used to assess its effectiveness.

CHARACTERISTICS OF A MISSION STATEMENT

 CUSTOMER ORIENTATION

BENEFITS (BOOK)

1. Achieve clarity of purpose among all managers and employees.

2. Provide a basis for all other strategic planning activities, including the internal and external assessment
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.

BENEFITS (MToolBox)

1.Exhibits undivided focus.

2. Provides direction and clarity.
3. Gives the ability to run on limited resources.
4. Defines the culture of the company.
5. Supports different teams to collaborate.
6. Helps attract the right talent.
7. Assists in taking the correct decisions
8. Creates a stable framework against organization restructuring.
9. Aids in building a strong PR brand image.
10. Inspires all the stakeholders.

COMPONENTS OF A MISSION STATEMENT

1. Customer (who?)
2. Products (what?)
3. Markets (geographically where?)
4. Technology (is it tech. current?)
5. Concerns for Survival and Growth (is it commited to growth?)
6. Philosophy (basic beliefs and ethics?)
7. Self-Concept (major competitive advantage?)
8. Concern for Public Image (is it responsive to environment?)
9. Concern for Employees (are employees important?)

(9) NINE CHARACTERISTICS OF A MISSION STATEMENT

 Broad in scope; do not include monetary amounts, numbers, percentages, ratios, or objectives.
 Less than 250 words
 Inspiring
 Identify the utility of a firm’s products
 Reveal that the firm is socially responsible
 Reveal that the firm is environmentally responsible
 Include the nine components of mission statement
 Reconciliatory
 Enduring

EXTERNAL ASSESSMENT

NATURE OF EXTERNAL AUDIT

An external audit's objective is to develop a concise list of opportunities that could benefit a company and
threats that should be prevented.

KEY EXTERNAL FORCES

 Economic (e.g inflation)

 Social, Cultural, Demographic, and Natural Environment (sex roles)
 Political, Governmental, and Legal (changes in laws)
 Technological (internet)
 Competitive (direct = how low price comp., indirect = creates a ceiling for profits)

COMPETITIVE INTELLIGENCE PROGRAM

-A systematic and ethical process for gathering and analyzing information about the competition’s activities
and general business trends to further a business’s own goals.

OBJECTIVES
 to provide a general understanding of an industry and its competitors
 to identify areas in which competitors are vulnerable and to assess the impact strategic actions would
have on competitors
 to identify potential moves that a competitor might make that would endanger a firm’s position in the
market.

CHARACTERISTICS

 Flexibility
 Usefulness
 Timeliness
 Cross-Functional Cooperation

PROCESS OF PERFORMING EXTERNAL AUDIT

Step 1: Gathering of Information

Step 2: Assimilating and Evaluating Intelligence
Step 3: Distributing and communicating

According to Freund, the most important key external factors should:

-Importance in achieving long-term and annual objectives
-Measurable
-Applicable to competing firms
-Hierarchical within the organization

INDUSTRIAL ORGANIZATION APPROACH

 contributes significantly to our understanding of how to achieve a competitive advantage

 makes us realize that external forces have a greater influence on a firm's performance than internal
functional considerations
 The I/O view has enhanced our understanding of strategic management.

COMPETITIVE ANALYSIS: PORTER'S FIVE FORCES MODEL

 This framework assists strategists in understanding what makes an industry profitable and offers the
information required to make strategic decisions.

1. RIVALRY AMONG COMPETING FIRMS

- most powerful; investigates the level of competitiveness

2. POTENTIAL ENTRY OF NEW COMPETITORS

- competition increases; probable reduce profitability

3. POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS

- substitutes are influence by switching costs and willingness.

4. BARGAINING POWER OF SUPPLIERS

- large number of suppliers may cause the competition to be intense

5. BARGAINING POWER OF CONSUMERS

- major force especially when it talks about consumers
SOURCES OF EXTERNAL INFORMATION

Unpublished : More on interviews

Published: Newspapers and Magazines

FORECASTING TOOLS

When unexpected circumstances occur, Quantitative are more reliable than Qualitative.

EFE (External Factor Evaluation)

The EFE Matrix summarizes and evaluates: (10 EXTERNAL AREAS)

Economic
Social
Cultural
Demographic
Environmental
Political
Legal
Governmental
Technological
Competitive

PURPOSE

The main purpose of this matrix is to allow the strategists to summarize and evaluate the external variables
in terms of threats & opportunity.

IMPORTANCE

Understanding the factors used in the EFE Matrix is more important than the actual weights and ratings
assigned.

CPM (Competitive Profile Model)

PURPOSE

Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s
strategic positions