Strategic Management Concepts Chapter 2

Strategic Management Concepts: A Competitive Advantage Approach, Concepts and Cases, Chapter 2

• 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 cyclical model with various chapters (10, 3, 2, 5, 6, 8, 4, 11) interconnected.
• Includes external and internal assessments, strategies, implementation, and evaluation.

Core Values Statement

• Defines a firm's commitment to integrity, fairness, discipline, equal employment opportunity, teamwork, accountability, continuous improvement, or other positive attributes.

Vision Statement

• Answers the question: "What do we want to become?"
• Should be short (ideally a single sentence) and inspirational.
• Should clearly reveal the type of business the firm engages in.

What Do We Want to Become?

• Vision statements should be concise (ideally one sentence) and developed with input from multiple managers.
• They should explicitly define the type of business the firm operates within or seeks to operate within.

Vision Statement Examples

• Dr Pepper Snapple: Striving to be the leading beverage company globally, known for refreshment, fun, and flavor.
• Starbucks: To maintain leadership position as the premier purveyor of the finest coffee worldwide, while upholding strict ethical and environmental standards.

Mission Statement (1 of 2)

• Describes an organization's purpose or reason for being.
• Answers the question: "What is our business?"
• Crucial for establishing objectives and strategic planning.

Mission Statement (2 of 2)

• Reveals what an organization wants to be and whom it wants to serve.
• May also be called a creed statement, statement of purpose, statement of philosophy, statement of beliefs, or statement of business principles.

Characteristics Of a Mission Statement (1 of 4)

• Allows generation and consideration of feasible objectives and strategies without restricting creativity.
• Must be broad enough to reconcile differing viewpoints among stakeholders.

Characteristics Of a Mission Statement (2 of 4)

• Stakeholders include employees, managers, stockholders, boards of directors, customers, suppliers, distributors, creditors, governments, unions, competitors, environmental groups, and the general public. -NGO & Trade Unions examples given

Characteristics of a Mission Statement (3 of 4)

• Avoids monetary figures, percentages, and objectives; scope must be broad.
• Fewer than 150 words.
• Inspiring.
• Identifies the utility of products.
• Shows social responsibility.
• Demonstrates environmental responsibility.

Characteristics of a Mission Statement (4 of 4)

• Has nine components, for instance: customers, products/services, markets, technology, concern for survival/growth/profits, philosophy, self-concept, concern for public image, concern for employees.
• Reconciliatory in nature.
• Enduring.

Insight on Scope of Mission Statement

• Mission statements aim to motivate and provide direction, image, and philosophy for the enterprise, rather than specify concrete ends.
• Too much detail may cause opposition, so consensus is key.

Considerations (1 of 2)

• Focus on experiences and benefits rather than the actual things offered.
• Offer attractive qualities, comfort, pleasure, and the benefit of knowledge instead of tangible possessions.

Considerations (2 of 2)

• Instead of tools, emphasize the beauty and craftsmanship associated.
• Impart a sense of comfort and quietness instead of physical furniture.
• Do not offer physical goods; offer ideas, emotions, atmosphere, feelings, and benefits.

Mission Statement Components (1 of 2)

• Customers: Who are they?
• Products/Services: What are a firm's major offerings?
• Markets: Where geographically does the firm compete?
• Technology: Is the firm technologically current?
• Survival, Growth, and Profitability: Is the firm committed to financial growth?

Mission Statement Components (2 of 2)

• Philosophy: What are a firm's beliefs, values, aspirations, and ethical priorities?
• Distinctive Competence: What is a firm's competitive edge?
• Public Image: Is the firm responsive to social, community, and environmental concerns?
• Employees: Are employees valuable assets to the firm?

Importance of Vision and Mission Statements

• Ensures employees/managers understand the firm's purpose.
• Prioritizes internal and external factors for feasible strategies
• Guides resource allocation
• Organizes work around a common purpose.

Table 2.5 Ten Benefits of Having a Clear Mission and Vision

• Clarity and purpose for managers/employees.
• Basis for strategic planning activities.
• Provides direction.
• Offers a viewpoint for stakeholders.
• Resolves differing views among managers.
• Creates shared expectations.
• Projects worth and organization's worthiness.
• Enhances organizational performance.
• Generates synergy among managers/employees.

Developing Vision and Mission Statements

• Managers read related articles to gain context.
• Each manager drafts a statement.
• A facilitator/committee merges statements into a single draft.
• Revisions, adjustments, and meetings follow.

Example Mission Statements (1 of 2)

• Hershey: "We bring sweet moments of Hershey happiness to the world every day." -Missing components: Customers, Technology, Survival/Growth/Profits, Distinctive competence, Public image, and Employees

Example Mission Statements (2 of 2)

• Proposed Hershey Mission Statement: "We aim to serve consumers of all ages and lifestyles by providing high-quality chocolate, candy, and snack products globally. We intend to grow by using robotics and business analytics, dedicated to supporting all communities, especially children at the Milton Hershey School. Our well-trained employees provide consumers with the best chocolate, wrapped in Hershey happiness."

Exemplary Proposed Mission Statement (1 of 2)

• Rite Aid: Dedicated to providing the best possible drugstore experience, offering state-of-the-art information to pharmacists about drug interactions. It's committed to customer safety and overall health with wellness programs, and expanding through various alliances.

Exemplary Proposed Mission Statement (2 of 2)

• UPS: Striving to be the most timely and dependable parcel delivery service globally by utilizing advanced tracking technology for profitable growth. UPS is committed to balancing customer needs, employee morale, shareholder interests, and community welfare.

Figure 2.2 How to Gain and Sustain Competitive Advantages

• A circular model showing the interconnected steps for gaining and sustaining competitive advantages, starting with establishing a clear vision and mission. The steps include evaluating and monitoring results, gaining and sustaining competitive advantage, formulating strategies, and implementing strategies.

This quiz explores key concepts in Chapter 2 of 'Strategic Management Concepts: A Competitive Advantage Approach'. It covers the importance and characteristics of core values, vision, and mission statements in strategic management. You'll evaluate their roles in achieving a competitive advantage for organizations.