TOPIC AREAS COVERED IN A CORPORATE MISSION STATEMENT

1. Products or services provided 2. Customer needs to be met 3. Technology to be used 4. Survival, growth and profitability 5. Managements philosophy 6. The firms Self Concept

7. Public image and social responsibility

FUNCTIONS OF A CORPORATE MISSION STATEMENT

Ensure unanimity of purpose.
Motivating the use of the organizations resources As a basis for allocating organizational resources Setting a general tone or climate As a focal point for the organizations identity Aids in translating goals and objectives into a working strategy Specifies organizational purposes so they can be controlled.

The Mission of Southwest Airlines

The Mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

To Our Employees
We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer. -January 1988

Internal Analysis and its Roles

Internal analysis provides a comparative look at a firms capabilities and helps answer the following questions

What are the firms strengths? What are the firms weaknesses? How do these strengths & weaknesses compare to competitors? Are resources and capabilities strengths and/or weaknesses? Are resources and capabilities likely sources of competitive advantage? Can the firm establish strategies that will exploit any sources of competitive advantage

The VRIO Framework

Four Important Questions:

Is the resource Valuable?
is the resource Rare? Is the resource Imitable? Can the Organization make use of it?

Applying the VRIO Framework

The Question of Value
in theory: Does the resource enable the firm to exploit an external opportunity or neutralize an external threat?
the practical: Does the resource result in an increase in revenues, a decrease in costs, or some combination of the two? (Levis reputation allows it to charge a premium for its Dockers pants)

Applying the VRIO Framework

The Question of Rarity
if a resource is not rare, then perfect competition dynamics are likely to be observed (i.e., no competitive advantage, no above normal profits)

a resource must be rare enough that perfect competition has not set in
thus, there may be other firms that possess the resource, but still few enough that there is scarcity (several pharmaceuticals sell cholesterol-lowering drugs, but the drugs are still scarcelook at prices)

Applying the VRIO Framework

The Question of Imitability
the temporary competitive advantage of valuable and rare resources can be sustained only if competitors face a cost or other in disadvantage imitating the resource intangible resources are usually more costly to imitate than tangible resources (Harley-Davidsons styles may be easily imitated, but its reputation cannot)

The Question of Imitability

Barriers to Imitation
Unique Historical Conditions (Caterpillar) first mover advantages path dependence
Causal Ambiguity (Southwest Airlines)
causal links between resources and competitive advantage may not be understood Patents offer a period of protection if the firm is able to defend its patent rights required disclosure may actually decrease the cost of imitation, and the timing

Applying the VRIO Framework

Value, Rarity, & Imitability
If a firms resources are: Valuable, Rare, but not Costly to Imitate
Valuable, Rare, and Costly to Imitate

The firm can expect: Temporary Competitive Advantage

Sustained Competitive Advantage (if Organized appropriately)

SWOT MATRIX
Strengths
Internal Competitive Advantage Distinctive Competence

Opportunities
External Future Oriented Niches

Weaknesses
Internal

Threats
External

Disadvantage
Area for Improvement

Vulnerability
Attack Point

Purposes

Qualitative Assessment of Current Condition

Competitor Assessment Strategic What-if Analysis Product to Business Unit to Corporate Analysis