BUSINESS STRATEGY

Business Strategy



Business Strategy

LO1:

Q1.1:

Mission

A mission is a statement that defines the very reason of the existence of a company. It tells why the company was made, to serve whom and to serve how. In companies, a mission statement is used to remind its employees the reason for which they are working in it. It tells the customers what they get from the company and that they are important to the company. It is a statement that fills the company's employees with potent energy to be extra productive which might have been lost without it. According to Bart a good mission statement contains the following (Bart, 1997, pp 291-383).

Primary market - It tells who are the target customers.

Services - It tells how the company serves its customers.

Distinction - It tells what makes the company exclusive and better than competitors.

McDonald's mission statement is a good example of a mission statement containing all three points mentioned above.

"To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key decor and friendly atmosphere."

Vision

While the mission statement defines why the company is working, a vision statement tells where the stakeholders of the company see it in the future. It can be the dream of the founder of the company or the vision of the presidential layer. It is the statement that motivates its employees to work harder. A vision statement of the company delivers the message to its employees about the possibilities of their bright future. It also projects the passion with which the company serves its clients.

Amazon.com's vision statement:

“Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” (amazon.com)

Objectives

The objectives can be understood as the vision of different departments or sectors in a company. For example, PDIL has defined the objectives of its Profitability as follows:

“To manage the assets and human resources, in the most effective and efficient manner, to ensure reasonable return on investment and to maintain adequate liquidity.”

Goals

Goals are short term targets that are to be achieved. Goals are updated, modified or changed once they are achieved. A good example a financial objective can be setting a quantity or proportion such as 15 percent growth in earnings or revenues within two months. Such goals are ideal because they seem achievable, measurement and comparisons can be made and the goals may be adjusted as required.

Core Competencies

Core competencies of a company are the factors that come exclusively with their products and services. These core competencies can be of any type whether HR, technical, procurement, environment and so on. This is what gives a company an edge over its competitors and becomes the basis of the provision of value addition. C K Prahalad and G Hamel are the founders of this concept. They believed that in future companies will hire their managers on the basis of the number of core competencies that ...