Mission Statement While the essence of vision is a forward-looking view of what an organisation wishes to become, mission is what

an organisation is and why it exists. Mission is a statement, which defines the role that an organisation plays in a society. It refers to the particular needs of that society, for instance, its information needs. A book publisher and a magazine editor are both engaged in satisfying the information needs of society but they do it through different means. A book publisher may aim at producing excellent reading material while a magazine editor may strive to present news analysis in a balanced and unbiased manner. Both have different objectives but an identical mission. A mission was earlier considered as the scope of the business activities a firm pursues. The definition of mission has gradually expanded to represent a concept that embodies the purpose behind the existence of an organisation. Thompson (1997) defines mission as the "essential purpose of the organisation, concerning particularly why it is in existence, the nature of the businesses it is in, and the customers it seeks to serve and satisfy" Hunger and Wheelen (1999) say that mission is the "purpose or reason for the organization's existence". Now there is not much difference of opinion about the definition of mission. Yet, there are instances of organisations confusing mission with vision or objectives. In strategic management literature, mission occupies a definite place as a part of strategic intent. A mission statement, once formulated, should serve an organisation for many years. But a mission may become unclear as the organisation grows and adds new products, markets and technologies to it activities. Then the mission has to be reconsidered and reexamined to either change or discard it, and evolve a fresh statement of organisational mission. Formulation of Mission Statement Truly speaking, an organisation's mission statement lies in the basic philosophy of those who create and manage the organisation as shown in figure Most organisations derive their mission statements from a particular set of tasks they are called upon to perform in the light of their individual, national or global priorities. Several public sector organisations, set up in India during the 1950s and 60s owe their existence to the vision of Jawaharlal Nehru,the first prime minister, who worked for the national aim of building a strong basic infrastructural independence. Role of Entrepreneur Usually, entrepreneurs lay down the corporate philosophy which an organisation follows in its strategic and operational activities. Such a philosophy may not be consciously and formally stated but may gradually evolve due to the entrepreneur's actions. Generally an entrepreneur has a perception of the type of organisation that he, wants his company to be. Mission statements could be formulated on the basis of e vision that an entrepreneur decides on in the initial stages of an organisation's, growth. Role of Strategists and Executives Major strategists could also contribute to the development of a mission statement. They do this informally by lending a hand in the creation of a particular corporate identity or formally through discussions and the writing down of a mission statement. Chief executives plan a major role in formulating a mission statement both formally and informally. They may set up executive committees to formally discuss and decide on a mission statement or enunciate a corporate philosophy to be followed for strategic management. Consultants may also be called upon to make an in-depth analysis of the organisation to suggest an appropriate mission statement. Characteristics of a Mission Statement A mission statement defines the basic reason for the existence of that organisation. Such a statement reflects the corporate philosophy, identity, character, and image of an organisation. It may be defined explicitly or could be deduced from the management's actions, decisions, or the chief executive's press statements. When explicitly defined it provides enlightenment to the insiders and outsiders on what the organisation stands for. In order to be effective, a mission statement should possess the following seven characteristics. 1. It should be feasible. A mission should always aim high but it should not be an impossible statement. It should be realistic and achievableits followers must find it to be credible. But feasibility depends on the

The specific client needs our team strives to meet: 4. 3. If all scooter manufacturers defined their mission in a similar fashion. therefore is an important purpose for a banking institution. It should be distinctive. It should not be a high sounding set of platitudes meant for publicity purposes. content. value for money. growth. A mission statement should be motivating for members of the organisation and of society. while India Today sees itself as 'the complete news magazine'. The specific ways in which we serve our clients: . and they should feel it worthwhile working for such an organisation or being its customers. Philosophy: What are the basic beliefs. which is indiscriminate. a mission statement should be clear enough to lead to action. Besides indicating the broad strategies to be adopted a mission statement should also provide clues regarding the manner in which the objectives are to be accomplished. The chief executive of Indal expressed his intentions by saying that his company "begins its fifth decade of committed entrepreneurship with the promise of a highly diversified company retaining aluminum as its mainline business. It should be precise. To be useful. Many organisations do adopt such statements but probably they do so for emphasizing their identity and character. A mission statement along with the organisational purpose should indicate the major components of the strategy to be adopted. It should indicate how objectives are to be accomplished.resources available to work towards a mission. A mission statement should not be so narrow as to restrict the organisation's activities nor should it be too broad to make itself meaningless. 7. of these essential components. electronics and industrial equipment business". For example. 1. Who our team serves: 2. The Administrative Staff College of India considers itself as 'the college for practicing managers' and Bajaj Auto believes in 'Providing. It should indicate major components of strategy. Concern for survival. 'Manufacturing bicycles' is a narrow mission statement since it severely limits the organisation's activities. format and specificity. A mission should be clear enough to lead to action. Products or services: What are the firm's major products or services? 3. A bank. Concern for public image: What is the firm's public image? 9. it will create an important distinction in the public mind. Components and corresponding questions that a mission statement should answer are given here. if not all. It should be motivating. Since a mission statement is often the most visible and public part of the strategic management process. Self-concept: What are the firm's major strengths and competitive advantages? 8. Why we serve these people: 3. This statement indicates that the company is likely to follow a combination of stability. Markets: Where does the firm compete? 4. It should be clear. is likely to have little impact.there would not be much of a difference among them. Most practitioners and academicians of strategic management consider an effectively written mission statement to exhibit nine characteristics or mission statement components. 4. while mobility business' is too broad a term as it does not define the reasonable contour within which the organisation could operate. Customers: Who are the enterprise's customers? 2. aspirations and philosophical priorities of the firm? 7. Concern for employees: What is the firm's attitude/orientation towards employees? 1. Asian Paints stresses 'leadership through excellence'. A mission statement. But if one defines it as providing scooters that would provide 'value for money. but with an active presence in the chemical.like Bajaj. for years'. 2. for years'. Technology: What is the firm's basic technology? 5. For instance. which lays great emphasis on customer service is likely to motivate its employees to serve its customers well and to attract clients. it is important that it include most. growth and diversification strategies in the future. COMPONENTS OF AN EFFECTIVE MISSION STATEMENT Mission statements can and do vary in length. and profitability: What is the firm's commitment towards economic objectives? 6. 5. core values. Customer service. 6.

Tip: OK. measures and desired result. To create your mission statement. and is the reason that customers will come to you and not your competitors (see tip below). How we communicate our mission to the community and our clients: 6. 5. Next identify the key measures of your success. so we're a bit glib here talking about the "winning idea" – this is a prime subject of the discipline of business strategy. shape and test. Tip: Mission Statements and Vision Statements usually refer to an organization or an organizational unit. Then we create vision statements. A Mission Statement defines the organization's purpose and primary objectives. but this time they do so in terms of the organization's values rather than bottom line measures (values are guiding beliefs about how things should be done. it shapes customers' understanding of why they should work with the organization. This is the idea or approach that will make your organization stand out from its competitors. F RES H ES T F ARM P RO DUC E . which expresses your ideas. and it can take a lot of effort to find. Vision Statements also define the organizations purpose. Combine your winning idea and success measures into a tangible and measurable goal. M IS S IO N S TATEM ENT C RE AT ION 1. and make sure you do the homework needed! Example: Take the example of a produce store whose winning idea is "farm freshness". Refine the words until you have a concise and precise statement of your mission.) The vision statement communicates both the purpose and values of the organization. Shared with customers. Team Charters can have a similar role when briefing teams. 3. 2. How we measure how well we’re fulfilling our mission: "Mission Statements" and "Vision Statements" do two distinctly different jobs." . Its prime function is internal – to define the key measure or measures of the organization's success – and its prime audience is the leadership team and stockholders. The owner identifies two keys measures of her success: freshness and customer satisfaction.5. She creates her mission statement – which is the action goal that combines the winning idea and measures of success. first identify your organization's "winning idea". First we look at creating mission statements. For employees. SWOT Analysis and Core Competence Analysis for starting points. The mission statement of Farm Fresh Produce is: "T O B ECO M E TH E NUMB ER O NE P RO DUCE S TO RE I N M AI N S TREET B Y S ELLI NG TH E H IG H ES T Q UALI TY . Make sure you choose the most important measures (and not too many of them!) 4. it gives direction about how they are expected to behave and inspires them to give their best. See our articles on USP Analysis. F RO M F ARM TO CUS TOM ER I N UNDER 24 H O URS O N 75% OF O UR RANG E AND WI T H 98% CUS TOM ER S ATI SF ACTI O N .

evaluate the progress. her customers and her employees value about her mission. Next. Using the example mission statement developed for Farm Fresh Produce. First identify your organization's mission. 7. 6. and make adjustments as necessary to stay on track. 8. tastiest and most nutritious local produce: From local farms to your table in under 24 hours. tastiness and "local-ness" of the produce. the owner examines what she. The four most important things she identifies are: freshness. 5. budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. and polish the words until you have a vision statement inspiring enough to energize and motivate people inside and outside your organization. 8. identify what you. healthiness. 2. 4. 9. Then uncover the real. 4. S TRATEGIC MANAGEMENT Need of Strategic Management:1. 3. 2. Due to change To provide guide lines Research and development Probability for business performance Systemized decision Improves Communication Allocation of resource Improves Coordination Helps the managers to have holistic approach Importance of Strategic Management:1. Here's the Vision Statement she creates and shares with employees. implement the strategy. human value in that mission. Combine your mission and values. your customers and other stakeholders will value most about how your organization will achieve this mission. 2. The firm must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy. 3. 3. Distil these into the values that your organization has or should have. move on to create your vision statement: 1. 5. 6. customers and farmers alike: "We help the families of Main Town live happier and healthier lives by providing the freshest. To the shape the Future of business Effective strategic idea Mangers and employer are innovative and creative Its decentralized the Management Its helps to increase the productivity To Makes discipline To Make control To makes forward s thinking The Strategic Planning Process: In today's highly competitive business environment. A simplified view of the strategic planning process is shown by the following diagram: . 7.V IS ION S T ATEM ENT C REAT IO N Once you've created your mission statement.

the firm should match its strengths to the opportunities that it has identified. Financial objectives involve measures such as sales targets and earnings growth. suppliers. and industry rivalry. weaknesses. Strategic objectives are related to the firm's business position. customers. opportunities. Michael Porter identified three industryindependent generic strategies from which the firm can choose. S TRATEG Y F O RM ULATI O N Given the information from the environmental scan. and may include measures such as market share and reputation. substitute products. Guided by the business vision.The Strategic Planning Process The Strategic Planning Process Mission & Objectives Environmental Scanning Strategy Formulation Strategy Implementation Evaluation & Control Mission and Objectives The mission statement describes the company's business vision. This framework evaluates entry barriers. . the firm's leaders can define measurable financial and strategic objectives. To attain superior profitability. A profile of the strengths. and threats is generated by means of a SWOT analysis An industry analysis can be performed using a framework developed by Michael Porter known as Porter's five forces. while addressing its weaknesses and external threats. A competitive advantage can be based on cost or differentiation. E NVI RO NM ENTAL S CAN The environmental scan includes the following components:    Internal analysis of the firm Analysis of the firm's industry (task environment) External microenvironment (PEST analysis) The internal analysis can identify the firm's strengths and weaknesses and the external analysis reveals opportunities and threats. including the unchanging values and purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities. the firm seeks to develop a competitive advantage over its rivals.

the implementation might not succeed if the strategy is misunderstood or if lower-level managers resist its implementation because they do not understand why the particular strategy was selected. budgets. For this reason. Define parameters to be measured Define target values for those parameters Perform measurements Compare measured results to the pre-defined standard Make necessary changes Strategic management . Implementation involves organization of the firm's resources and motivation of the staff to achieve objectives. 2. 4. those who implement the strategy likely will be different people from those who formulated it. Otherwise. The way in which the strategy is implemented can have a significant impact on whether it will be successful.S TRATEG Y I MP LEM ENTATI O N The selected strategy is implemented by means of programs. care must be taken to communicate the strategy and the reasoning behind it. 5. 3. E VALUATI O N & C O NTRO L The implementation of the strategy must be monitored and adjustments made as needed. Evaluation and control consists of the following steps: 1. In a large company. and procedures.

older products can be sold in lesser developed countries o Operational flexibility .Global Strategic Management During the last half of the twentieth century. etc. wars)  Learning o Broaden learning opportunities due to diversity of operating environments . However. raw materials o Extend the product life cycle . S O URCES OF C O MP ETI TI VE A DVANTAG E F RO M A G LOB AL S TRATEG Y A well-designed global strategy can help a firm to gain a competitive advantage. This advantage can arise from the following sources:  Efficiency o Economies of scale from access to more customers and markets o Exploit another country's resources . many barriers to international trade fell and a wave of firms began pursuing global strategies to gain a competitive advantage. exchange rates.labor. some industries benefit more from globalization than do others. change over time Strategic o First mover advantage and only provider of a product to a market o Cross subsidization between countries o Transfer price Risk o o   Diversify macroeconomic risks (business cycles not perfectly correlated among countries) Diversify operational risks (labor problems. To create a successful global strategy. managers first must understand the nature of global industries and the dynamics of global competition. and some nations have a comparative advantage over other nations in certain industries.shift production as costs. earthquakes.

Remember that Cost Leadership is about minimizing the cost to the organization of delivering products and services. Reputation o Crossover customers between markets . These are shown in Figure 1 below. and to organizations of all sizes. "Differentiation" (creating uniquely desirable products and services) and "Focus" (offering a specialized service in a niche market). smaller airlines try to make the most of their detailed knowledge of just a few routes to provide better or cheaper services than their larger. Simply being amongst the lowest-cost producers is not good enough. The luxury airlines. of course. developing the "edge" that gets you the sale and takes it away from your competitors. Meanwhile. there are some very different options available. international rivals. There are two main ways of achieving this within a Cost Leadership strategy:  Increasing profits by reducing costs. The cost or price paid by the customer is a separate issue! The Cost Leadership strategy is exactly that – it involves being the leader in terms of cost in your industry or market. This helps them grab market share and ensure their planes are as full as possible. Remember that Cost Focus means emphasizing cost-minimization within a focused market. T H E C O S T L EADERS H IP S TRATEG Y Porter's generic strategies are ways of gaining competitive advantage – in other words. . Why is this so? The answer is that each of these airlines has chosen a different way of achieving competitive advantage in a crowded marketplace. The terms "Cost Focus" and "Differentiation Focus" can be a little confusing. But the point we're making here is that when you come to book a flight. and Differentiation Focus means pursuing strategic differentiation within a focused market. as they could be interpreted as meaning "A focus on cost" or "A focus on differentiation". no-frills airline. These three approaches are examples of "generic strategies". Companies that are successful in achieving Cost Leadership usually have:  Access to the capital needed to invest in technology that will bring costs down. on the other hand. focus their efforts on making their service as wonderful as possible. because they can be applied to products or services in all industries. as you leave yourself wide open to attack by other low cost producers who may undercut your prices and therefore block your attempts to increase market share. The no-frills operators have opted to cut costs to a minimum and pass their savings on to customers in lower prices. They were first set out by Michael Porter in 1985 in his book Competitive Advantage: Creating and Sustaining Superior Performance. and the higher prices they can command as a result make up for their higher costs.  Increasing market share through charging lower prices. He then subdivided the Focus strategy into two parts: "Cost Focus" and "Differentiation Focus". You therefore need to be confident that you can achieve and maintain the number one position before choosing the Cost Leadership route.reputation and brand identification P OR T E R ' S G E NE R I C S T R AT E GI E S C HOOSI N G Y OU R R OU TE T O C OMP ET IT I VE A D V A NT A GE Which do you prefer when you fly: a cheap. or a more expensive operator with fantastic service levels and maximum comfort? And would you ever consider going with a small company which focuses on just a few routes? The choice is up to you. while still making a reasonable profit on each sale because you've reduced costs. further driving down cost. Porter called the generic strategies "Cost Leadership" (no frills). while charging industry-average prices.

The greatest risk in pursuing a Cost Leadership strategy is that these sources of cost reduction are not unique to you. Otherwise. Cost Leadership . One of the most important reasons why this is wise advice is that the things you need to do to make each type of strategy work appeal to different types of people.Very efficient logistics. you risk competing against better-resourced broad market companies' offerings. they risk attack on several fronts by competitors pursuing Focus Differentiation strategies in different market segments. the key to making a success of a generic Focus strategy is to ensure that you are adding something extra as a result of serving only that market niche. so it's worth spending time to get it right.) The "something extra" that you add can contribute to reducing costs (perhaps through your knowledge of specialist suppliers) or to increasing differentiation (though your deep understanding of customers' needs). but will typically involve features. But you do need to make a decision: Porter specifically warns against trying to "hedge your bets" by following more than one strategy. C H OO S I NG TH E R I GH T G ENERI C S TRATEGY Your choice of which generic strategy to pursue underpins every other strategic decision you make. even if the volume of work they do as a result is lower. To make a success of a Differentiation strategy. But whether you use Cost Focus or Differentiation Focus. How you do this depends on the exact nature of your industry and of the products and services themselves. facilities). T H E F O CUS S TRATEG Y Companies that use Focus strategies concentrate on particular niche markets and.  Generic strategies apply to not-for-profit organizations too. development and innovation. Large organizations pursuing a differentiation strategy need to stay agile with their new product development processes. support and also brand image that your customers value. This is why it's important to continuously find ways of reducing every cost. and that other competitors copy your cost reduction strategies. One successful way of doing this is by adopting the Japanese Kaizenphilosophy of "continuous improvement". develop uniquely low cost or wellspecified products for the market. by understanding the dynamics of that market and the unique needs of customers within it. durability. It's simply not enough to focus on only one market segment because your organization is too small to serve a broader market (if you do. T H E D IFF ERENTI ATI O N S TRATEGY Mind Tools on Strategy:  SWOT Analysis  TOWS Analysis  PEST Analysis  Core Competence Analysis  Value Chain Analysis  Porter's Five Forces  Porter's Generic Strategies  Bowman's Strategy Clock  Scenario Analysis Differentiation involves making your products or services different from and more attractive those of your competitors. functionality. A not-for-profit can use a Cost Leadership strategy to minimize the cost of getting donations and achieving more for their income. it is still essential to decide whether you will pursue Cost Leadership or Differentiation once you have selected a Focus strategy as your main approach: Focus is not normally enough on its own.  The ability to deliver high-quality products or services.  Effective sales and marketing.  A low cost base (labor. so that the market understands the benefits offered by the differentiated offerings. Local charities are great examples of organizations using Focus strategies to get donations and contribute to their communities. Because they serve customers in their market uniquely well. materials. and a way of sustainably cutting costs below those of other competitors. while one with pursing a Differentiation strategy will be committed to the very best outcomes. This makes their particular market segment less attractive to competitors. As with broad market strategies. they tend to build strong brand loyalty amongst their customers. organizations need:  Good research.

Select the generic strategy that gives you the strongest set of options .  Reduce or eliminate the threat of substitution.requires a very detailed internal focus on processes.  Reduce or eliminate the threat of new entry. demands an outwardfacing. So. when you come to choose which of the three generic strategies is for you. For each strategic option. if you adopted that strategy. ask yourself how you could use that strategy to:  Reduce or manage supplier power. Having done this. Step 2: Use Five Forces Analysis to understand the nature of the industry you are in. Step 3: Compare the SWOT Analyses of the viable strategic options with the results of your Five Forces analysis. carry out a SWOT Analysis of your strengths and weaknesses. highly creative approach. and the opportunities and threats you would face. on the other hand. Differentiation. it's vital that you take your organization's competencies and strengths into account. it may be clear that your organization is unlikely to be able to make a success of some of the generic strategies.  Come out on top of the competitive rivalry.  Reduce or manage buyer/customer power. Step 1: For each generic strategy. Use the following steps to help you choose.

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