RIFT VALLEY UNIVERSITY

ADAMA MAIN CAMPUS

FACULTY OF BUSINESS AND SOCIAL SCIENCE
DEPARTMENT OF: - BUMA

PROGRAM: - 4THYEAR, REGULAR

SUBJECT: - STRATEGIC MANAGEMENT

GROUP: - 5

STUDENT NAME ID
DESTA ZELEKE......................................................................................................0500/19

SUBMITED TO: - M.R SEID A (MBA)

SUMITED DATE: - 08/05/2023 E.C

1. What do we mean by strategy? How is a business model different from a strategy?
Strategy is a long-term plan of action designed to achieve a particular goal or set of
objectives. It is a plan that outlines the direction a company wants to take in order to achieve
its goals and objectives. Strategy sets out the means by which an organization will achieve its
goals and objectives, and involves making choices about where to invest, which markets to
target, and how to differentiate from competitors.
Business model, on the other hand, is a framework for creating and capturing value in a
particular market. It explains how a company intends to generate revenue and make a profit
by offering a product or service to a specific group of customers. The business model is a
description of how the company creates, delivers, and captures value.
 The key difference between a business model and a strategy is that a
 Business model focuses on how a company generates revenue and profits, while
 Strategy focuses on how the company will achieve its goals and objectives.
 In other words, the business model is a subset of the strategy.
 Business model describes how a company generates revenue and profits, whereas
 Strategy outlines the plan for how the company will achieve its goals and
objectives.
 While a business model is important for generating revenue,
 A strategy is essential for long-term success and sustainability.
2. What does mission statement state about?

A mission statement is a formal declaration of an organization's core purpose and the reasons for
its existence. It defines the company's objectives and describes the products or services it offers.
It communicates the company's overall strategy to employees, stakeholders, and customers.

The mission statement is usually drafted by the senior management team, after a thorough
understanding of the organization's values, goals, and target market. It is a concise statement that
sums up the company's purpose, priorities, and guiding principles.

A mission statement typically covers the following elements:

I. Purpose: It describes what the organization does and why it exists. It should be clear and
easily understood by stakeholders.
II. Values: It outlines the company's core values that guide its decisions and actions. Values
are principles, beliefs, and attitudes that guide behavior.
III. Products or Services: It describes the products or services offered by the company and how
they are different from competitors.
IV. Target Audience: It identifies the customers that the company is trying to serve.
V. Goals and Objectives: It outlines the company's objectives, goals, and priorities. This
includes targets related to sales, profits, customer satisfaction, and market share.
The goal of a mission statement is to provide clarity and focus to the organization's strategy and
operations. It should communicate the company's unique selling proposition (USP) and highlight
its competitive advantage. It is also a tool for aligning everyone's focus on a common purpose,
which helps the organization to work more efficiently and effectively.

Overall, a clear and engaging mission statement is crucial for inspiring and motivating
employees, attracting customers, and communicating the company's overall strategy.

3. Differentiate mission and vision statements?

Mission and vision statements are both important components of a company's overall strategic
planning. They both provide clarity and direction for the organization but differ in terms of the
focus and scope of each.

Mission Statement:

A mission statement is a written declaration of an organization's core purpose, the reason for its
existence, and the nature of the business it is in. It should be comprehensive and provide a clear
statement of the company's objectives, the products or services it offers, and its target audience.
In short, a mission statement defines what the organization is all about and what it stands for.

The mission statement needs to be well-thought-out and easily understood by all stakeholders,
including employees, customers, and investors. It should convey a sense of direction and
inspiration to motivate employees to work towards the company's goals. A mission statement
must also be measurable and time-bound, which makes it possible to track the organization's
performance and adjust future strategies accordingly.

For example, Google's mission statement is "to organize the world's information and make it
universally accessible and useful." This statement clearly outlines what Google aims to
accomplish and how it plans to do it. The statement also helps align employee focus and
encourages them to work towards the company's objectives.

Vision Statement:

A vision statement is a forward-looking statement that describes what an organization hopes to

achieve in the future. It outlines the company's aspirations, hopes, and dreams and articulates its
ambitions for the future. In essence, a vision statement serves as a north star, guiding the
organization towards its long-term objectives.

Similar to a mission statement, a vision statement needs to be inspirational and aspirational,

providing a sense of direction and motivation for all stakeholders. Additionally, it provides
clarity and focus, helps with decision-making, and aligns everyone towards a common goal.
For example, Tesla's vision statement is "to create the most compelling car company of the 21st
century by driving the world's transition to electric vehicles." This statement lays out Tesla's
long-term objective and its role in shaping the future of the auto industry.

In summary, mission statements define the company's purpose, while vision statements outline
its goals and aspirations. Together, they can provide a powerful tool for motivating and directing
employees, attracting customers, and guiding overall business strategy. Both are important
components in creating a well-oiled, successful business model.

4. What is the importance of formulating vision and mission statement?

Formulating a vision and mission statement is essential for building a strong corporate
culture and steering the organization towards its goals. The following are some of the key
reasons why it is essential to have a vision and mission statement:

I. Provides Direction: A vision and mission statement provide clarity and direction to the
organization's long-term goals and objectives. It helps to create a roadmap that guides the
company's decision-making process, aligning efforts to achieve their vision.
II. Enhances Focus: A clear and concise vision and mission statement improves the
company's focus on its goals, avoiding distractions that may disrupt the organization's
objective.
III. Builds Internal Consensus: Clearly articulating a vision and mission statement assists in
building internal consensus within the organization. All employees work towards the
same goals as the vision statement clarifies the company's purpose in a simple,
understandable, and well-communicated manner.
IV. Attracts Key Stakeholders: A well-formulated vision and mission statement will attract
critical stakeholders to the organization, such as customers, investors, and employees,
aligning everyone with a shared sense of purpose.
V. Encourages Accountability: A defined vision and mission statement promote
accountability, both for individual actions and for the organization as a whole, ensuring
that everyone works towards achieving the same objective.
VI. Provides a Framework for Decision Making: A clear vision and mission statement help
decision-makers to use a framework to evaluate options and make effective and
consistent decisions.
A vision and mission statement are essential for creating a strong corporate culture,
building consensus, enhancing focus, attracting key stakeholders, promoting
accountability, and providing a framework for decision making.
5. Identify the components which are mentioned in this mission statement.

Dell’s mission statement”……….. Is to be the most successful computer company in the world
at delivering the best customer experience in markets we serve. In doing so, so dell will meet
customer expectations of highest quality; leading technology; competitive pricing; individual and
company accountability; best-in-class service and support; flexible customization capability;
superior corporate citizenship; financial stability”.

Components mentioned in Dell's mission statement are as follows:

I.Mission: The mission statement sets out the primary goals of the company, which is to
become the most successful computer company in the world.
II.Customer Experience: The company places a high premium on customer experience
and aims to deliver the best customer experience in the markets they serve. The company
believes that providing excellent customer experience is one of the most critical factors in
achieving their mission.
III.Meeting Customer Expectations: Dell aims to meet and exceed customer expectations
by delivering the highest quality, leading technology, competitive pricing, and best-in-
class service and support.
IV.Accountability: Dell believes in individual and company accountability, meaning that
every individual employee is responsible for their work, and the company is also
accountable for the overall results and performance.
V.Customization Capability: The company aims to provide flexible customization
capabilities to its customers. This means that customers can personalize and tailor the
products and services to meet their specific needs and requirements.
VI.Superior Corporate Citizenship: Dell aims to adopt superior corporate citizenship
practices, which includes environmentally-friendly operations, ethical practices, and
community involvement.
VII.Financial Stability: Finally, Dell aims to maintain financial stability by generating
profits, managing cash flows, and reducing operational costs.

In conclusion, Dell's mission statement shows that the company is committed to

becoming the most successful computer company in the world by focusing on customer
experience, exceeding customer expectations, promoting accountability, providing
customization capability, adopting superior corporate citizenship practices, and
maintaining financial stability. This mission statement is crucial in guiding the company's
strategic decision-making process and ensuring that all employees work towards
achieving the same goals.
6. Assume that XYZ power Ltd. Set up a factory for manufacturing solar lanterns in a remote
village as there was no reliable supply of electricity in rural areas. The revenue earned by the
company was sufficient to cover the costs and the risks the demand of lanterns was increasing
day to day, so the company decided to increase production to generate higher sales. For this
they decided to employ people from the nearby village as very few job opportunities were
available in that area. The company also decided to open schools and crèches for the children of
its employees.
i. Identify and explain the objectives of management discussed above.
ii. State and two values which the company wanted to communicate to the society.

i. The objectives of management discussed in the given scenario are as follows:

a) Increase in production: The primary objective of management in this case is to

increase the production of solar lanterns. This is because the demand for these lanterns is
increasing day-to-day, and the company needs to fulfill the demand.

b) Employment generation: The Company has decided to hire people from the nearby
village to work in their factory. This objective shows that management is concerned
about creating job opportunities for the people living in remote areas.

c) Social responsibility: The Company has decided to open schools and crèches for the
children of its employees. This objective shows that management is committed to
fulfilling its social responsibilities towards the community.

d) Cost management: The revenue earned by the company was sufficient to cover the
costs and the risks. Therefore, another objective of management in this case would be to
manage the costs and risks associated with the business.

ii. The two values which the company wanted to communicate to the society are:

a) Social responsibility: the Company’s decision to open schools and crèches for the
children of its employees shows their commitment towards fulfilling their social
responsibilities towards the community.

b) Employment generation: the Company’s decision to hire people from the nearby
village for their factory shows their commitment towards generating employment
opportunities for the people living in remote areas.

In conclusion, the given scenario highlights the importance of managing business

operations effectively while also fulfilling social responsibilities towards the community.
The company decided to increase production, generate employment opportunities, and
fulfill their social responsibilities by opening schools and creches for the children of their
employees. The values they wanted to communicate to the society were social
responsibility and employment generation.