SM - Ch2

Strategic Management Concepts: A
Competitive Advantage Approach

Sixteenth Edition
Chapter 2
The Business Vision and
Mission
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
Learning Objectives (1 of 2)
2.1 Describe the nature and role of vision statements in
strategic management.
2.2 Describe the nature and role of mission statements in
strategic management.
2.3 Discuss the process of developing a vision and mission
statement.
2.4 Discuss how clear vision and mission statements can
benefit other strategic-management activities.
2.5 Describe the characteristics of a good mission
statement.
2.6 Identify the components of mission statements.
Learning Objectives (2 of 2)
2.7 Evaluate mission statements of different organizations
and write effective vision and mission statements.
Vision Statements
➢ This is the place to dream

big!
➢ Imagine the organization

was wildly successful, with
unlimited resources and no
barriers whatsoever.
➢ If you achieve your vision,

how would the world be
different?
Vision Statement
A vision is a picture of future success.
A vision is a short sentence that reflects your big

dream. That comes when we think far enough
ahead to realize there will be important
challenges that we can prepare for now.
Answers the question of:
– what do we want to become (our Big Dream)?
Vision
Criteria for a Meaningful Vision

▪ A vision engages the heart and the spirit.
▪ ... leads toward a worthwhile goal.
▪ ... gives meaning to an effort.
▪ ... is simple.
▪ ... is attainable.
▪ ... Short and brief.
7
Shared Vision
• Shared vision creates a commonality of interests that

can lift workers out of the monotony of daily work
and put them into a new world of opportunity and
challenge.
Vision Statement Examples
• General Motors’ vision is to be the world leader in
transportation products and related services.
• PepsiCo’s responsibility is to continually improve all

aspects of the world in which we operate-environment,
social, economic creating a better tomorrow than today.
• Tyson Foods' vision is to be the world's first choice for

protein solutions while maximizing shareholder value.
Vision Statement Examples
• Samsonite's vision is “To provide innovative solutions

for the traveling world”
• Microsoft's vision is "There will be a personal

computer on every desk running Microsoft software."
Source: Strategic management: concepts and cases / Fred R. David.—15th ed. (2013)
Mission Statement:
• Mission statement
– a declaration of an organization’s “reason for being.”
– answers the pivotal question
“What is our business?”
– essential for effectively establishing objectives and
formulating strategies
Mission Statement
• Mission statement
– reveals what an organization wants to be and whom
it wants to serve
– Also called a creed statement, a statement of
purpose, a statement of philosophy, a statement of
beliefs, and a statement of business principles
Mission Statement Components
1. Customers—Who are the firm’s customers?
2. Products or services—What are the firm’s major
products or services?
3. Markets—Geographically, where does the firm
compete?
4. Technology—Is the firm technologically current?
5. Concern for survival, growth, and profitability—Is
the firm committed to growth and financial soundness?
6. Philosophy—What are the basic beliefs, values,
aspirations, and ethical priorities of the firm?
Mission Statement Components
7. Self-concept—What is the firm’s distinctive

competence or major competitive advantage?
8. Concern for public image—Is the firm responsive to
social, community, and environmental concerns?
9. Concern for employees—Are employees a valuable
asset of the firm?
Example Mission Statements (1 of 2)
PepsiCo
• We aspire to make PepsiCo the world’s (3) premier
consumer products company, focused on convenient foods
and beverages (2). We seek to produce healthy financial
rewards for investors (5) as we provide opportunities for
growth and enrichment to our employees (9), our business
partners and the communities (8) in which we operate. And
in everything we do, we strive to act with honesty,
openness, fairness and integrity (6).
Exemplary Proposed Mission Statement (1 of 2)
Avon
• Our mission is to provide women (1) quality fragrances,
cosmetics, and jewelry (2) at reasonable prices backed by
outstanding customer service provided by our thousands
of door-to-door sales representatives (7, 9) operating
globally (3). We use the latest technology (4) to profitably
develop and market products desired by women all over
the world (5). Avon representatives put integrity first (6) in
setting a good example in every community (8) they
operate-as they sell beauty.
Exemplary Proposed Mission Statement (2 of 2)
L’Oreal
• Our mission is to design, produce, and distribute the
world’s best fragrances, perfumes, and personal care
products (2) to women, men, and children (1) by utilizing
the latest technological improvements (4). We empower
our highly creative team of researchers to develop safe,
eco-friendly (7) products that will enable our firm to
profitably grow (5) through thousands of retail outlets. We
strive to be one of the most socially responsible (8) firms
on the planet (3) and appreciate our employees (9) making
that happen, while following the “golden rule” in all that we
do (6).
Example Mission Statements
• Fleetwood Enterprises will lead the recreational vehicle
and manufactured housing industries (2) in providing
quality products, with a passion for customer-driven
innovation (1). We will emphasize training, embrace
diversity and provide growth opportunities for our
associates and our dealers (9). We will lead our
industries in the application of appropriate technologies
(4). We will operate at the highest levels of ethics and
compliance with a focus on exemplary corporate
governance (6). We will deliver value to our
shareholders, positive operating results and industry-
leading earnings (5).
Example Mission Statements
• Dell’s mission is to be the most successful computer

company (2) in the world (3) at delivering the best
customer experience in markets we serve (1). In doing
so, Dell will meet customer expectations of highest
quality; leading technology (4); competitive pricing;
individual and company accountability (6); best-in-class
service and support (7); flexible customization capability
(7); superior corporate citizenship (8); financial stability
(5).
The Process of Developing Mission Statement
• Select several articles about these statements and

ask all managers to read these as background
information.
• Ask managers themselves to prepare a vision and
mission statement for the organization.
The Process of Developing Mission
Statement
• Merge these statements into a single document

and distribute the draft statements to all managers
• Process should create an “emotional bond” and
“sense of mission” between the organization and
its employees
Importance of Vision and Mission
Statements
• To make sure all employees/managers understand the
firm’s purpose or reason for being.
• To provide a basis for prioritization of key internal and
external factors utilized to formulate feasible strategies.
• To provide a basis for the allocation of resources.
• To provide a basis for organizing work, departments,
activities, and segments around a common purpose.
Table 2-2 Ten Benefits of Having a Clear
Mission and Vision
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including internal and
external assessment, establishing objectives, developing strategies, choosing
among alternative strategies, devising policies, establishing organizational
structure, allocating resources, and evaluating
performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
10. Achieve synergy among all managers and employees.
Characteristics of a Mission Statement (1 of 4)
• A good mission statement allows for the generation and
consideration of a range of feasible alternative objectives
and strategies without unduly stifling management
creativity.
• A mission statement needs to be broad to reconcile
differences effectively among, and appeal to, an
organization's diverse stakeholders
• Stakeholders
– include employees, managers, stockholders, boards of
directors, customers, suppliers, distributors, creditors,
governments (local, state, federal, and foreign), unions,
competitors, environmental groups, and the general
public.
1. Broad in scope; does not include monetary amounts,
numbers, percentages, ratios, or objectives
2. Fewer than 150 words in length
3. Inspiring
4. Identifies the utility of a firm’s products
5. Reveals that the firm is socially responsible
6. Reveals that the firm is environmentally responsible
7. Includes nine components: customers, products or
services, markets, technology, concern for
survival/growth/profits, philosophy, self-concept, concern
for public image, concern for employees
8. Reconciliatory
9. Enduring
A Customer Orientation (1 of 3)
A mission statement should:
• Define what the organization is and what the organization
aspires to be
• Be limited enough to exclude some ventures and broad
enough to allow for creative growth
• Distinguish a given organization from all others
A mission statement should also:
• Serve as a framework for evaluating both current and
prospective activities
• Be stated in terms sufficiently clear to be widely
understood throughout the organization
• A good mission statement reflects the anticipations of
customers.
• The operating philosophy of organizations should be to
identify customers' needs and then provide a product or
service to fulfill those needs.
Considerations (1 of 2)
• Do not offer me things.
• Do not offer me clothes. Offer me attractive looks.
• Do not offer me shoes. Offer me comfort for my feet and
the pleasure of walking.
• Do not offer me a house. Offer me security, comfort, and a
place that is clean and happy.
• Do not offer me books. Offer me hours of pleasure and the
benefit of knowledge.
• Do not offer me CDs. Offer me leisure and the sound of
music.
Considerations (2 of 2)
• Do not offer me tools. Offer me the benefits and the
pleasure that come from making beautiful things.
• Do not offer me furniture. Offer me comfort and the
quietness of a cozy place.
• Do not offer me things. Offer me ideas, emotions,
ambience, feelings, and benefits.
• Please, do not offer me things.
REVIEW QUESTIONS
Questions-Choose one Best Answer
• 1) Which statement is TRUE?
A) Companies must choose between having a mission

statement or a vision statement.
B) Companies are required by law to have both mission and
vision statements.
C) The vision statement should be established before the
mission statement.
D) A vision statement cannot be established until a company
has developed its mission statement.
E) A company can't have a mission statement unless it has
a vision statement.
• 2) Which of these basic questions should a vision

statement answer?
A) What are our challenges?

B) Who are our employees?
C) What is our business?
D) Who are our competitors?
E) What do we want to become?
• 3) A good mission statement has
A) an employee orientation.
B) a customer orientation.
C) an environmental orientation.
D) a shareholder orientation.
E) a profit orientation.
• 4) The purpose of a mission statement is to declare all

of these EXCEPT
A) whom it wants to serve.

B) a reason for being.
C) a statement of beliefs.
D) a statement of purpose.
E) an annual financial plan.
• 5) In the process of developing a mission statement, it

is important to involve _______
A) as few managers as possible.
B) the board of directors only.
C) as many managers as possible.
D) lower-level management only.
E) upper-level management only.
• 6) The following excerpt from a mission statement
illustrates which of the nine essential components of a
mission statement?
"We believe our first responsibility is to the doctors, nurses,
patients, mothers, and all others who use our products and
services."
A) Concern for Public Image

B) Technology
C) Concern for Employees
D) Customers
E) Markets
• 7) Which group would be classified as stakeholders?

A) Creditors
B) Governments
C) Employees
D) Suppliers
E) All of the above
• 8) Which question(s) are answered in an effective mission

statement?
A) Are employees a valuable asset of the firm?
B) Is the firm committed to growth and financial soundness?
C) Who are the firm's customers?
D) Geographically, where does the firm compete?
E) All of the above
• 9) An effective mission statement should do all of
the following EXCEPT
A) be inspiring.
B) identify the utility of a firm's products.
C) include monetary amounts, numbers,
percentages and ratios.
D) reveal that the firm is environmentally
responsible.
E) be reconciliatory.
• 10) Which component of a mission statement

addresses the basic beliefs, values, aspirations,
and ethical priorities of the firm?
A) Technology
B) Philosophy
C) Self-concept
D) Concern for public image
E) Customers
11) Effective and carefully planned mission statements
A) require major changes every few quarters.

B) require major revision every few years.
C) become ineffective in the first year.
D) require major changes every few months.
E) stand the test of time.
Thank You
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Strategic Management Concepts: A

Competitive Advantage Approach

➢ This is the place to dream

➢ Imagine the organization

➢ If you achieve your vision,

A vision is a picture of future success.

A vision is a short sentence that reflects your big

Criteria for a Meaningful Vision

• Shared vision creates a commonality of interests that

• PepsiCo’s responsibility is to continually improve all

• Tyson Foods' vision is to be the world's first choice for

• Samsonite's vision is “To provide innovative solutions

• Microsoft's vision is "There will be a personal

7. Self-concept—What is the firm’s distinctive

• Dell’s mission is to be the most successful computer

• Select several articles about these statements and

• Merge these statements into a single document

A) Companies must choose between having a mission

• 2) Which of these basic questions should a vision

A) What are our challenges?

• 3) A good mission statement has

• 4) The purpose of a mission statement is to declare all

A) whom it wants to serve.

• 5) In the process of developing a mission statement, it

A) Concern for Public Image

• 7) Which group would be classified as stakeholders?

• 8) Which question(s) are answered in an effective mission

• 10) Which component of a mission statement

A) require major changes every few quarters.

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