Strategic Management Chapter 2: Vision and Mission

Study Notes

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

Strategic Management: A competitive advantage approach, seventeenth edition
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

Shows a model illustrating the interconnectedness of various strategic topics.
Includes crucial chapters like Vision and Mission, Strategies in Action, Strategy Analysis, Implementation, Evaluation, and Governance

Core Values Statement

A core values statement details a company's commitment to attributes like integrity, fairness, discipline, equal opportunity, teamwork, accountability, continuous improvement, and more

Vision Statement

A vision statement answers the question "What do we want to become?"
It should be short (ideally one sentence)
Should reveal the type of business the firm is in
Inspiring and motivating

What Do We Want to Become?

Vision statements should be short, ideally one sentence
Multiple managers should contribute to crafting the vision statement.
The vision should reflect the firm's type of business

Vision Statement Examples

Dr. Pepper Snapple: Striving to be the best beverage company globally, known for refreshment, fun, and flavor.
Starbucks: Aiming to be the world's premier coffee provider, while maintaining their exceptional principles and consistent growth

Mission Statement (1 of 2)

A declaration of a company's reason for existence
Answers the crucial question of "What is our business?"
Essential for goal setting and strategy development
Should be concise; preferably less than 50 words
Includes nine components

Mission Statement (2 of 2)

Reveals the organization's goals and target audience
A mission statement is also called a creed statement, statement of purpose, philosophy statement, beliefs statement, or statement of business principles

Characteristics of a Mission Statement (1 of 4)

A good mission statement permits the exploration of various objectives and strategies without hindering management creativity
The statement should be comprehensive to reflect diverse stakeholder views

Characteristics of a Mission Statement (2 of 4)

Stakeholders: Employees, managers, stockholders, directors, customers, suppliers, and the public
(additional note) NGOs and trade Unions (example given in the document)

Characteristics of a Mission Statement (3 of 4)

Scope: Broad, not focusing on figures or specifics
Length: Under 150 words
Inspiring message
Utility of products: Identifying usefulness of products
Socially responsible business practices
Environmentally responsible business practices

Characteristics of a Mission Statement (4 of 4)

Components: Customers, products/services, markets, technology, survival/growth/profits, philosophy, self-concept, concern for public image, concern for employees.
Important attributes: Reconciliatory approach and enduring

Insight on Scope of Mission Statement

Statements are not designed to explicitly detail goals, but rather to inspire motivation, provide direction, portray a vision, and guide the enterprise. Excessive detail can hinder unity and lead to opposition.

Considerations (1 of 2)

Avoid offering tangible products; instead, emphasize benefits and experiences

Considerations (2 of 2)

Focus on what a customer gains, not just the product itself. Offer emotions, ambience, and benefits.

Mission Statement Components (1 of 2)

Detailed breakdown of components crucial for defining a mission statement: customers, service/products, markets (geography), technology, survival/growth/profitability

Mission Statement Components (2 of 2)

Additional critical elements: Philosophy, distinctive competence, public image, and employees.

Importance of Vision and Mission Statements

Crucial for establishing a shared understanding of the company's purpose among employees and managers.
Provides a foundation for strategic planning, which includes prioritizing both internal and external factors to establish feasible strategies for resource allocation, and structuring activities for a common goal

Table 2.5 Ten Benefits of Having a Clear Mission and Vision

Key benefits include clarity of purpose, strategic planning support, establishing direction, managing stakeholders' expectations, promoting shared ideals, fostering worthwhile projects, achieving higher organizational performance, and achieving synergy.

Developing Vision and Mission Statements

Procedures for producing vision and mission statements: research, individual input, integration, and revision

Example Mission Statements (1 of 2): Hershey

Focused on delivering sweet moments
Shortcomings in alignment with recommended guidelines identified in the text

Example Mission Statements (2 of 2): A Proposed Mission Statement for Hershey

A more comprehensive mission statement for Hershey, encompassing crucial aspects missing.

Exemplary Proposed Mission Statement (1 of 2) Rite Aid

Emphasizing a customer-centric approach to experience and overall health improvement.
Holistic approach toward customers and wellness.

Exemplary Proposed Mission Statement (2 of 2): United Parcel Service (UPS)

Focus on timely and dependable service aligned with modern technology across various logistical networks.

Figure 2.2 How to Gain and Sustain Competitive Advantages

Shows a circular model with clear steps involved in achieving and maintaining competitive edge: establish vision/mission, analyze and refine, formulate strategies, implement effectively, and review outcomes