vision mission strategy 111

8/17/2019 Vision Mission Strategy 111

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McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All RighsReser!e".

What is Strategy?

• Large-scale, future-oriented plan for

interacting with the competitive

environment to achieve objectives

• ompany!s "game plan#

• $ramewor% for managerial decisions


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'imensions of Strategic 'ecisions

• Strategic issues

• (e)uire top-management decisions

• (e)uire large amounts of the firm!s resources

• *ften affect the firm!s long-term prosperity

• +re future oriented

•sually have multifunctional or multibusinessconse)uences

• (e)uire considering the firm!s eternal environment


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/hree Levels of Strategy

10 orporate level

&0 usiness level.0 $unctional level


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3hibit 1-&4 Single-business $irms

P O M / R & D

s t r a t e g i e s

F i n a n c i a l /

a c c o u n t i n gs t r a t e g i e s

M a r k e t i n g

s t r a t e g i e s

H u m a n

r e l a t i o n ss t r a t e g i e s

C o r p o r a t e /

b u s i n e s s l e v e l


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3 1-&4 6ultiple business $irms

B u s i n e s s 1T p e t i t l e ! e r e

P O M / R & D

s t r a t e g i e s

F i n a n c i a l /

a c c o u n t i n gs t r a t e g i e s

M a r k e t i n g

s t r a t e g i e s

H u m a n

r e l a t i o n ss t r a t e g i e s

B u s i n e s s "T p e t i t l e ! e r e

B u s i n e s s #T p e t i t l e ! e r e

C o r p o r a t es t r a t e g i e s


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haracteristics of Strategic 6anagement

'ecisions

$unctional-

level

decisions

$unctional-

level

decisions

;mplement overall strategy

;nvolve action-oriented

operational issues

+re relatively short range

and low ris%

;ncur only modest costs


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haracteristics of Strategic 6anagement

'ecisions

usiness-level

decisions

ridge decisions at

corporate and functional

levels

+re less costly, ris%y, and

potentially profitable than

corporate-level decisions

+re more costly, ris%y, and

potentially profitable than

functional-level decisions


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What is a ompany 6ission?

/he fundamental purpose that sets a

firm apart from other firms of its

type and identifies the scope of its

operations in product and mar%et

terms


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haracteristics of a 6ission Statement

• 3mbodies the business philosophy of the firm!s

strategic decision ma%ers

• ;mplies image firm see%s to project

• (eflects firm!s self-concept

• ;ndicates

• firm!s principal product or service areas

• primary customer needs the firm will attempt to

satisfy


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uestions +ddressed y a 6ission

Statement

• Why is this firm in business?

• What are our economic goals?

• What is our operating philosophy in terms of )uality,company image, and self-concept?

• What are our core competencies and competitiveadvantages?

• What customers do and can we serve?• @ow do we view our responsibilities to stoc%holders,

employees, communities, environment, social issues,competitors?


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omponents of a 6ission Statement

• Specifies basic type of product or service to be offered

• ;dentifies primary mar%et or customer groups to be served

• Specifies the technology to be used in production ordelivery

• (eflects the firm!s fundamental concern for survivalthrough growth and profitability

•(eflects the firm!s managerial philosophy• ;dentifies the public image the firm see%s

• Specifies the self-concept those affiliated with the firmshould have of it


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3 &-&4 Aractical 3amples of 6ission

Statement omponentsustomer-mar%et

/o anticipate and meet mar%et needs of farmers, ranchers,

and rural communities within Borth +merica C3B3DE

Aroduct-service

+6+D!s principal products are molybdenum, coal, iron

ore, copper, lead, 9inc, petroleum and natural gas,0 potash

phosphates, nic%el, tungsten, silver, gold, and magnesium


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3 &-& Ccontd0E

8eographic domain

We are dedicated to total success of orning 8lass Wor%s as

a worldwide competitor

/echnology

/he common technology in these areas relates to discrete

particle coatings CB+S@+E

oncern for Survival

;n this respect, the company will conduct its operations

prudently, and will provide the profits and growth which

will assure @oover!s ultimate success


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3 &-& Ccontd0E

Ahilosophy

Self-concept

oncern for Aublic ;mage

We are committed to improve health care throughout the world

Cater /ravenolE

@oover niversal is a diversified, multi-industry corporation

with strong manufacturing capabilities, entrepreneurial

policies, and individual business unit autonomy

We are responsible to the communities in which we live and

wor% and to the world community as well CFohnson G FohnsonE


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Bewest /rends in 6ission

omponents

• Sensitivity to customer wants

• "/he customer is our top priorityH#

• 3mphasis on etensive product safety programs

• oncern for )uality

• "uality is job oneH#

• 3mphasis on )uality in manufacturing

• Bew philosophy I )uality is the norm


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Bewest /rends in 6ission

omponents

• Statements of company vision

• 'eveloped to epress the aspirations of the

eecutive leadership

• Aresents the firm!s strategic intent

• "+ computer on every des%, and in every home,

running on 6icrosoft software#


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30 &-114 ;nputs to 'evelopment of

6ission Statement

;nside Sta%eholders

3ecutive officers

oard of directors

Stoc%holders

3mployees

*utside Sta%eholders

ustomersSuppliers

reditors

8overnments

nions

ompetitors8eneral

public

ompany

6ission


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/ypes of Long-/erm *bjectives

• Arofitability

• Aroductivity• ompetitive position

• 3mployee development

• 3mployee relations

• /echnological leadership

• Aublic responsibility


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ualities of Long-/erm *bjectives

riteria used

in preparing

objectives

+cceptable

$leible

6easurable6otivating

Suitable

nderstandable

+chievable


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8eneric Strategies

Low-cost Leadership

'ifferentiation $ocus


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30 7-.4 (e)uirements for 8eneric

ompetitive Strategies

8enericStrategy

ommonly (e)uired S%ills and(esources

ommon *rgani9ational(e)uirements

*verall ostLeadership •Sustained capital investmentand access to capital

•Arocess engineering s%ills

•;ntense supervision of labor

•Aroducts designed for ease in

manufacture•Low-cost distribution system

•/ight cost control•$re)uent, detailed

control reports

•Structured

organi9ation and

responsibilities•;ncentives based on

meeting strict

)uantitative targets


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30 7-24 (is%s of the 8eneric Strategies

(is%s of ost Leadership (is%s of 'ifferentiation (is%s of $ocus

ost leadership is notsustained

•ompetitors imitate•/echnology changes

•*ther bases for costleadership erode

Aroimity in differentiationis lost

ost focusers achieve evenlower cost in segments

'ifferentiation is notsustained

•ompetitors imitate•ases for differentiation become less important to buyers

ost proimity is lost

'ifferentiation focusersachieve greaterdifferentiation in segments

$ocus strategy is imitated

/arget segment becomes

unattractive•Structure erodes

•'emand disappears

roadly target competitorsoverwhelm segments

•Segment!s differences from

others narrow•+dvantages of broad lineincrease


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/ypes of 8rand Strategies

• oncentrated growth

• 6ar%et development

• Aroduct development

• ;nnovation

• @ori9ontal integration

• Jertical integration• oncentric

diversification

• onglomeratediversification

• /urnaround• 'ivestiture

• Li)uidation

•an%ruptcy• Foint ventures

• Strategic alliances

• onsortia


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@ori9ontal and Jertical ;ntegration

Strategies

Horizontal Integration

• ased on growth via acquisition of one or more similar

firms operating at the same stage of the production-mar%eting chain

Vertical Integration

• ;nvolves ac)uiring firms

• /hat supply ac)uiring firm with inputs CbackwardintegrationE or

• +re customers for firm!s outputs C forward integrationE


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30 7-


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McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Righs

6otivations for 'iversification

;ncrease firm!s stoc% value

;ncrease growth rate of firm

;nvestment is better use of funds than using them forinternal growth

;mproves stability of earnings and sales

alance or fill out product line

'iversify product line

+c)uire a needed resource )uic%ly

+chieve ta savings

;ncrease efficiency and profitability

vision mission strategy 111

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