Strategic Management Chapter 2 Quiz

Strategic Management Concepts: A Competitive Advantage Approach, Concepts and Cases

• Chapter 2: Business Vision and Mission
• Learning Objectives (1 of 2):
  • Explain the need for core values statements in strategic management
  • Describe the nature and role of vision statements in strategic management
  • Identify the characteristics of a vision statement
  • Describe the nature and role of mission statements in strategic management
  • Identify and discuss the characteristics of an effective mission statement
• Learning Objectives (2 of 2):
  • Identify the components of mission statements
  • Discuss the benefits for a firm of having clear vision and mission statements
  • Evaluate and write mission statements for different organizations
• Figure 2.1: A Comprehensive Strategic-Management Model. A diagram showing the relationship between different chapters in the textbook.
• Core Values Statement: A statement specifying a firm's commitment to integrity, fairness, discipline, equal opportunity, teamwork, accountability, continuous improvement, or similar attributes.
• Vision Statement: Answers the question "What do we want to become?". It should be short, one sentence, inspiring, and reveal the type of business.
• What Do We Want To Become?: Vision statements should be short, and many managers should participate in creating them. They should explicitly define the type of business.
• Vision Statement Examples:
  • Dr Pepper Snapple: to be the best beverage business globally.
  • Starbucks: to be the premier purveyor of the finest coffee in the world.
• Mission Statement (1 of 2):
  • A declaration of an organization's reason for being.
  • Answers the question "What is our business?".
  • Essential for establishing objectives and formulating strategies.
  • Short mission statements (less than 50 words) are preferred.
  • Nine components in a good mission statement.
  • Mission statements consider the utility or value of products.
• Mission Statement (2 of 2):
  • Reveals what an organization wants to be and whom it wants to serve.
  • Is also called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, and a statement of business principles.
• Characteristics of a Mission Statement (1 of 4):
  • Flexible enough to allow for different strategies without being limiting.
  • Broad enough to appeal to diverse stakeholders and reconcile stakeholder differences.
• Characteristics of a Mission Statement (2 of 4):
  • Stakeholders include employees, managers, stockholders, directors, customers, suppliers, distributors, creditors, governments, unions, competitors, environmental groups and general public.
• Characteristics of a Mission Statement (3 of 4):
  • Broad in scope, avoids monetary amounts, percentages, ratios, and objectives
  • Should not be more than 150 words.
  • Inspiring
  • Explains the utility of products.
  • Indicates social responsibility.
  • Indicates environmental responsibility.
• Characteristics of a Mission Statement (4 of 4):
  • Includes 9 components: customers, products/services, markets, technology, survival/growth/profits, philosophy, self-concept, public image, and employees.
  • Should be reconciliatory between different concerns.
  • Should be enduring
• Insight on Scope of Mission Statement:
  • Mission statements are not intended to state specific goals.
  • They are intended to provide motivation, direction, image, and a philosophy to guide the enterprise.
  • Excessive detail may create opposition from within the organization.
• Considerations (1 of 2): Focusing on customer needs, not just products.
• Considerations (2 of 2): Focus on benefits, ideas, ambience, emotions, not just physical things.
• Mission Statement Components (1 of 2):
  • Customers (Who are the customers)
  • Products/Services (What are the firm's major products or services)
  • Markets (Where does the firm compete geographically)
  • Technology (Is the firm technologically current)
  • Survival/Growth/Profitability (Is the firm committed to growth and financial soundness)
• Mission Statement Components (2 of 2):
  • Philosophy (What are the firm's basic beliefs, values, aspirations, and ethical priorities)
  • Distinctive Competence (What is the firm's major competitive advantage)
  • Public Image (Is the firm responsive to social, community, and environmental concerns)
  • Employees (Are employees a valuable asset of the firm)
• Importance of Vision and Mission Statements:
  • Ensures all employees understand the firm's purpose.
  • Provides a basis for prioritizing key internal and external factors used in formulating feasible strategies.
  • Provides a basis for allocating resources and organizing work, departments, activities, and segments around a common purpose.
• Table 2.5 Ten Benefits of Having a Clear Mission and Vision.
  • Achieve clarity of purpose among all managers and employees.
  • Provide a basis for strategic planning.
  • Providing direction.
  • Promotes shared expectations.
  • Projects worth and intent.
  • Enhances organizational performance.
  • Fosters synergy.
• Developing Vision and Mission Statements: A common approach for creating these statements involves seeking input from managers, merging statements into a single document, seeking feedback and revisions, and clarifying the finalized statements.
•  Example Mission Statements: Hershey, proposed statement; Rite Aid; United Parcel Service (UPS)
• Examples of statements that lack some of the defined components are shown for comparison
• Figure 2.2: How to Gain and Sustain Competitive Advantages. Illustrates a circular process, starting with establishing a clear vision and mission, followed by gaining competitive advantages through identifying strategies and implementing those strategies while monitoring results for adjusting when necessary.

Test your understanding of Chapter 2 from 'Strategic Management Concepts'. This quiz covers the importance and characteristics of business vision and mission statements, their roles in strategic management, and the benefits of clear statements for organizations. Assess your knowledge on core values and effective mission statements.