CHAPTER TWO

COMPONENTS OF STRATEGY

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Contents
Vision Statement

Mission Statement

Business Values

Strategic Issues

Goals and Objectives

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Vision statement
 A vision statement is a company's road map,
indicating what the company wants to become by
setting a defined direction for the company's growth.
 A vision statement identifies where the organization
wants to be in future.
 It describes dreams and aspirations for future
 Vision statement developed first
 Short – preferably one sentence
 A vision is the potential to view things ahead of
themselves.
 It answers the question “where we want to be”.
 A clear vision provides the foundation for developing a
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comprehensive mission statement.
Vision statement
Examples:
 Bahir Dar University aspires to be one of the leading
Research-Intensive Universities in Africa and the first
choice in Ethiopia by 2030.
 Microsoft’s vision statement is “To assist individuals
and businesses throughout the globe fulfill their highest
potential”
 Walmart’s vision statement is “Be the destination for
customers to save money, no matter how they want to
shop.”
 Ford’s vision statement is “To become the world’s
most trusted company, designing smart vehicles for a
smart world.”
 Google’s vision statement is “To provide access to the
world’s information in one click.” 4
Vision Statement
An effective vision statement must have following
features:
– Forward-looking
– Motivating and inspirational
– Clarity
– Reflective of a company’s culture and core
values
– Brevity
– Rational/realistic
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Mission Statement
 Mission statement answers the question: "What is
our business?”
 Enduring statement of purpose that distinguishes one
organization from another in similar enterprises.
 Declaration of an organization’s “reason for being”
 A clear mission statement is essential for effectively
establishing objectives and formulating strategies.
 A business mission is the foundation for priorities,
strategies, plans, and work assignments.
 Mission statements also referred to as: creed statement,
statement of purpose, statement of philosophy and
statement of business principles. 6
Mission Statement
Examples:
BDU’s Mission:
– Promote advanced research and innovation on the
basis of the country’s requirements
– Produce graduates with relevant professions and
necessary competences to respond to the national
labor market requirements to eventually ascertain
the global competitiveness of the country
– Improve lives through evidence-based and
transformative community engagement
– Enhance demand-driven and problem solving
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technology transfer.
Mission Statement
Example…
 Microsoft’s mission is “To empower every
individual and every organization on the earth to
accomplish more.”
 Walmart’s mission is “To save people money so
they can live better.”
 Ford’s mission statement is “To make people’s
lives better by making mobility accessible and
affordable.”
 Google’s mission statement is “To organize the
world’s information and make it universally
accessible and useful.” 8
Mission Statement
Features of a Mission
– Mission must be feasible and attainable. It should
be possible to achieve it.
– Mission should be clear enough so that any
action can be taken.
– It should be inspiring for the management, staff
and society at large.
– It should be precise enough, i.e., it should be
neither too broad nor too narrow.
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Mission Statement
Features of a Mission…
– It should be unique and distinctive to leave an
impact in everyone’s mind.
– It should be analytical, i.e., it should analyze
the key components of the strategy.
– It should be credible, i.e., all stakeholders
should be able to believe it.

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Benefits Mission Statement
 To ensure unanimity of purpose
 To provide a basis for allocating resources
 To establish the necessary organizational climate
 To provide a basis for motivation
 To facilitate the translation of objectives into a
work structure
 To specify organizational purposes and then to
translate these purposes into objectives
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Mission Statement Components
 Customers: Who are the firm’s customers?
 Products or services: What are the firm’s major products or
services?
 Markets: Geographically, where does the firm compete?
 Technology: Is the firm technologically current?
 Concern for survival, growth, and profitability: Is the firm
committed to growth and financial soundness?
 Philosophy: What are the basic beliefs, values, aspirations,
and ethical priorities of the firm?
 Self-concept: What is the firm’s distinctive competence or
major competitive advantage?
 Concern for public image: Is the firm responsive to social,
community, and environmental concerns?
 Concern for employees: Are employees a valuable asset of
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the firm?
Business Values
 Company values are the core values or standards
that guide the way you do business.
 They sum up what your business stands for,
influences the organizational culture and drives
how and why you do things.
 While business plans and strategies may change,
the core values of your business will usually
remain the same. 13
Business Values
Types of company values include:
 Accountability
 Collaboration
 Customer focus
 Diversity
 Innovation
 Integrity
 Leadership
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Business Values
 One team
 Partnerships
 Passion
 Professional
 Quality
 Respect
 Staff development

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Business Values
Example:
The Core Values of Bahir Dar University are:
– Pursuit of wisdom
– Excellence
– Innovation
– Social responsibility
– Diversity
– Internationalization
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Business Values
Example…
Walmart’s Core Values:
– Frontline emphasis on the customer
– Listen
– Inclusive, innovative, and agile
– Exceptional performance
– Responsible
– Honesty
– Equality
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Business Values
Example…
Microsoft’s Core Values
– Innovation
– Dependable technology
– Equality and diversity
– Corporate social responsibility
– Philanthropy
– Environment
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Strategic Issues
 Good strategy takes more than just strong desire.
 Good strategy requires good input and analysis.
 It also requires good decision-making.
 That’s what the exercise known as “STRATEGIC
ISSUES” is all about.
 It is a pivotal step in the strategic planning process
that deals with answering the “Big Strategic
Questions.”
 A strategic issue is a fundamental policy question or
critical challenge affecting an organization's
mandates, mission, values, stakeholders, resources,
structure, processes, management, or product or
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service level.
Strategic Issues
 Strategic issues are important aspects that require
attention in order to achieve the business goals of a
company.
 Strategic issues require careful decisions and
clarifications to resolve, and have a critical impact on
the performance of a business.
 They include the organizational structure, products,
marketing, human resource management, customer
service, strategic partnerships, business models,
strategic management, product development and
strategic alliances.
 Failure to resolve these strategic issues hurts business
operations, leading to losses. 20
Strategic Issues
 Strategic issues are typically somewhat unique from
company to company.
 They will also change from year to year as some issues
are totally resolved and new ones arise.
 However, there are a few common sources/areas of
strategic issues in many businesses, including the
following:
→Strategic focus
→Strategic competencies
→Culture modification/Organizational change
→Resource limitations
→Strategic alliances/acquisitions/mergers/joint ventures
→E-commerce products 21
Strategic Issues
Example:
Bahir Dar University's Strategic Issues:
– Excellence in instruction and learning
– Excellence in research
– Excellence in community engagement
– Advance in human resource management
– Enhance good governance and leadership
– Advance in communication and partnership
– Improve infrastructure and resources
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Goals and Objectives
 A goal is a desired future state that an
organization tries to achieve.
 Goals specify in particular what must be done if
an organization is to attain mission or vision.
 Goals make mission more prominent and
concrete.
 They co-ordinate and integrate various functional
and departmental areas in an organization.
 Goals are perceived as broad statements of the
end results. 23
Goals and Objectives
 A goal is an open ended statement of what one
wants to accomplish, with no quantification of
what is to be achieved and no time criteria for
completion.
Examples of goals are:
 HR: cut absenteeism
 Finance: reduce bad debts
 Marketing: increase sales levels
 Production: cut production costs, etc.

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Goals and Objectives
 Objectives amplify the set goals with quantitative
terms-considered as specific and tangible ones
 Setting objectives means converting the strategic
vision and business mission into specific
performance outcomes the organization wants to
achieve.
 Objectives are the end results of planned activity.
 They should be stated as action verbs and tell what
is to be accomplished by when and quantified if
possible.
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Goals and Objectives
 The achievement of corporate objectives should
result in the fulfillment of a corporation’s mission.
 Effective goals and objectives have following
features:
– Multiple-They are not single for an organization.
– They should be both short-term as well as long-
term.
– Flexible- must respond and react to changes in
environment.
– They must be feasible-realistic and operational.
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Goals and Objectives
– They are precise and measurable.
– They must be challenging but achievable.
– They must be time bound-achieved within a
specific time frame.
– They include both financial as well as non-
financial components.

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Goals and Objectives
Some of the differences between goals and objectives are the following:
Goals Objectives
Broad in scope Narrow in scope
General intention or direction Specific/ Precise
Intangible or “soft” Tangible
Abstract Solid/ Concrete
Can’t be easily measured/ validated Can be easily measured/ validated

The end Ends in themselves

The result The means to the end
The whole Part of the whole, often with milestones
Longer-term Shorter-term
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Goals and Objectives
An example of a financial goal and objective:

 Goal: Moha Soft Drink Company wants to

increase its market share and enhance its profit.

 Objective: The objective of Moha Soft Drink

Company is to increase its market share by 20%
and enhance its profit by 30% for the coming 2
years.
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