Strategic Management
Strategic Management: Concepts
and Cases, 11/E by Fred David
Strategic formulation
Strategy Formulation
Vision & Mission
External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
Vision
“What do we want to become?”
Agreement on the basic vision for which
the firm strives to achieve in the long run is
critically important to the firm’s success.
Examples of vision statements:
The Vision of Pepsi To become the leading producer and
marketer of food and beverage products in the world
Mission Statements
What is our business?”
Reveal what an organization wants to be
and whom it wants to serve
Essential for effectively establishing
objectives and formulating strategies
Social Policy & Mission
Managerial philosophy shapes social policy --
• Affects development of vision & mission
• Responsibilities to –
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Consumers
Environmentalists
Minorities
Communities
Social Policy & Mission
Social policy should be integrated in all
strategic-management activities
Mission should convey the social
responsibility of the firm
Customers
Products
Services
Markets
Technology
Employees
Mission
Elements
Survival
Growth
Profit
Public
Image
Self-Concept
Philosophy
The essential components of a
mission statement
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Components and Questions That a Mission Statement Should Answer
1.
Customers: Who are the firm’s customers?
2.
Products or services: What are the firm’s major products?
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?
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?
Vision & Mission
Research results are mixed, however,
firms with formal mission statements
generally see a:
• 2x average return on shareholder’s equity
• Positive relationship to company
performance
• 30% higher return on certain financial
measures
PepsiCo Mission
PepsiCo’s mission is to increase the value of our
shareholders’ investment. We do this through
sales growth, cost controls, and wise investment
resources. We believe our commercial success
depends upon offering quality and value to our
consumers and customers; providing products
that are safe, wholesome, economically efficient
and environmentally sound; and providing a fair
return to our investors while adhering to the
highest standards of integrity.
Mission Statement Evaluation Matrix
COMPONENTS
Organization
Dell
Proposed Dell
Customers
Products
Services
Markets
Concern
for
Survival,
Growth,
Profitabilit
y
Technology
Mission Statement Evaluation Matrix
COMPONENTS
Organization
Dell
Proposed dell
Philosophy
SelfConcept
Concern for
Public Image
Concern for
Employees
Questions
• Discuss how to develop a mission
statement and why a mission systems are
considered imperative in the strategic
formulation process.
• Discuss what you would consider to be the
3 most important elements of an “ideal
mission statement “ for an organisation of
your choice.