BUS 411
DAY 3
Copyright 2005 Prentice Hall
1
Agenda
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Review of last Class
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Make sure you have read the Google Case for next class
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Describe the benefits of good strategic management.
Explain why good ethics is good business in strategic management.
Explain the advantages and disadvantages of entering global markets.
Discuss how a firm may achieve sustained competitive advantage.
Explain ISO 9000, 14000, and 14001
Discuss the relevance of Sun Tzu’s The Art of War to strategic management.
Mission and vision statements
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In-class exercises using the Google Case study case
Discuss the Nature of Strategic Management
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Questions?
Describe the nature and role of vision and mission statements in strategic management.
Discuss why the process of developing a mission statement is as important as the resulting
document.
Identify the components of mission statements.
Discuss how clear vision and mission statements can benefit other strategic-management activities.
Evaluate mission statements of different organizations.
Write good vision and mission statements.
Assignment #1 Due next Class
Copyright 2007 Prentice Hall
Ch 2 -2
Benefits of Strategic
Management
• Proactive in shaping firm’s future
• Initiate and influence firm’s activities
• Formulate better strategies
•Systematic, logical, rational
Copyright 2007 Prentice Hall
Ch 2 -3
Benefits of Strategic
Management
Financial Benefits
• Improvement in sales
• Improvement in profitability
• Productivity improvement
Copyright 2007 Prentice Hall
Ch 2 -4
Benefits of Strategic
Management
Non-Financial Benefits
• Improved understanding of competitors strategies
• Enhanced awareness of threats
• Reduced resistance to change
• Enhanced problem-prevention capabilities
Copyright 2007 Prentice Hall
Ch 2 -5
Benefits of Strategic
Management (Greenley)
1. Identification of Opportunities
2. Objective view of management problems
3. Improved coordination & control
4. Minimizes adverse conditions & changes
5. Decisions that better support objectives
Copyright 2007 Prentice Hall
Ch 2 -6
Benefits of Strategic
Management (Greenley – cont’d)
6. Effective allocation of time & resources
7. Internal communication among personnel
8. Integration of individual behaviors
9. Clarify individual responsibilities
10. Encourage forward thinking
Copyright 2007 Prentice Hall
Ch 2 -7
Benefits of Strategic
Management (Greenley – cont’d)
11. Encourages
favorable attitude toward
change
12. Provides
discipline and formality to the
management of the business
Copyright 2007 Prentice Hall
Ch 2 -8
Why Some Firms Do No
Strategic Planning
Poor reward structures
Fire-fighting
Waste of time
Too expensive
Laziness
Content with success
Copyright 2007 Prentice Hall
Ch 2 -9
Why Some Firms Do No
Strategic Planning
Fear of failure
Overconfidence
Prior bad experience
Self-interest
Fear of the unknown
Suspicion
Copyright 2007 Prentice Hall
Ch 2 -10
Business Ethics & Strategic
Management
Business Ethics defined –
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Principles of conduct within organizations
that guide decision making and behavior
Copyright 2007 Prentice Hall
Ch 2 -11
Business Ethics & Strategic
Management
Good business ethics –
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Prerequisite for good strategic management
Copyright 2007 Prentice Hall
Ch 2 -12
Business Ethics & Strategic
Management
Code of business ethics –
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Provides basis on which policies can be
devised to guide daily behavior and
decisions in the workplace
Copyright 2007 Prentice Hall
Ch 2 -13
Business Ethics & Strategic
Management
Business practices always considered unethical –
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Misleading advertising
Misleading labeling
Harm to the environment
Insider trading
Dumping flawed products on foreign markets
Poor product or service safety
Padding expense accounts
Copyright 2007 Prentice Hall
Ch 2 -14
Natural Environment
Perspective
ISO used to gain strategic advantage
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ISO 9000 focuses on quality control
> 1.5 million companies incorporate ISO
Copyright 2007 Prentice Hall
Ch 2 -15
Natural Environment
Perspective
ISO 14000 standards
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Voluntary standards
ISO 14001 standard for Environmental
Management System
Firms minimize harmful effects on
environment
Copyright 2007 Prentice Hall
Ch 2 -16
The Nature of Global
Competition
International/multinational corporations
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Parent company
Host country
Copyright 2007 Prentice Hall
Ch 2 -17
The Nature of Global
Competition
Strategy implementation may be difficult
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Cultural differences
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Norms
Values
Work ethic
Copyright 2007 Prentice Hall
Ch 2 -18
Advantages of International
Operations
Absorb excess capacity
Reduce unit costs
Spread risk over wider markets
Low-cost production facilities
Copyright 2007 Prentice Hall
Ch 2 -19
Advantages of International
Operations (cont’d)
Less intense competition
Lower taxes
Economies of scale
Copyright 2007 Prentice Hall
Ch 2 -20
Sun Tzu and the Art of Business
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The Six Principles from
Sun Tzu and the Art of Business: Six Principles for Managers
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Capture your market without destroying it
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"To rely on rustics and not prepare is the greatest of crimes; to be prepared beforehand for any
contingency is the greatest of virtues."
Use alliances and strategic control points in the industry to "shape" your opponents
and make them conform to your will.
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"Know the enemy and know yourself; in a hundred battles you will never be in peril."
Use speed and preparation to swiftly overcome the competition.
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"Now an army may be likened to water, for just as flowing water avoids the heights and hastens to
the lowlands, so an army avoids strength and strikes weakness."
Use foreknowledge and deception to maximize the power of business intelligence.
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"Generally in war, the best policy is to take a state intact; to ruin it is inferior to this....For to win one
hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without
fighting is the acme of skill."
Avoid your competitor's strength, and attack their weakness
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Mark McNeilly (Oxford Press University - 1996)
"Therefore, those skilled in war bring the enemy to the field of battle and are not brought there by
him."
Develop your character as a leader to maximize the potential of your employees.
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"When one treats people with benevolence, justice and righteousness, and reposes confidence in
them, the army will be united in mind and all will be happy to serve their leaders."
Copyright 2007 Prentice Hall
Ch 2 -21
Assignment #1
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Prepare a two to three page paper (not less than 500 and not
more than 1000 words) that covers the listed requirements. Turn
in a well formatted typed document. You may also e-mail the
document to me.
 Prepare Mission and Vision statements for yourself (25 %)
 Carefully articulate your career objectives (25 %)
 Perform a SWOT analysis of your current situation as it relates to
you desired career objectives (25 %)
 Develop a strategic plan (less than a page!) that takes you from
your current situation to your desired career objectives (25 %)
This assignment is due Friday 26, January at 9:30 AM
Resources
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http://humanresources.about.com/cs/strategicplanning1/a/strategicplan.htm
http://change.monster.com/articles/swot/
http://www.mindtools.com/pages/article/newTMC_05_1.htm
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http://www.work911.com/planningmaster/
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Copyright 2007 Prentice Hall
Ch 2 -22
Chapter 2
The Business Vision & Mission
Strategic Management:
Concepts & Cases
11th Edition
Fred David
Copyright 2007 Prentice Hall
Ch 2 -23
Chapter Outline
What do we want to become?
What is our business?
Importance of Vision and Mission Statements
Copyright 2007 Prentice Hall
Ch 2 -24
Chapter Outline (cont’d)
Characteristics of a mission statement
Components of a mission statement
Writing & evaluating mission statements
Copyright 2007 Prentice Hall
Ch 2 -25
Vision
“The last thing IBM needs right now is a
vision.” (July 1993)
What IBM needs most right now is a
vision.” (March 1996)
-- Louis V. Gerstner, Jr., CEO, IBM Corporation
Copyright 2007 Prentice Hall
Ch 2 -26
Vision
Agreement on the basic vision for which the
firm strives to achieve in the long run is
critically important to the firm’s success.
Copyright 2007 Prentice Hall
Ch 2 -27
Vision
“What do we want to become?”
Copyright 2007 Prentice Hall
Ch 2 -28
Vision
Clear Business
Vision
Comprehensive
Mission Statement
Copyright 2007 Prentice Hall
Ch 2 -29
Vision & Mission
Shared Vision -Creates commonality of interests
 Reduce daily monotony
 Provides opportunity & challenge
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Copyright 2007 Prentice Hall
Ch 2 -30
Vision Statement Examples
A national organization which represents its
members in all aspects of poultry and eggs
on both a national and international level
-- U.S. Poultry & Egg Association
Copyright 2007 Prentice Hall
Ch 2 -31
Vision Statement Examples
The Vision of Manley Baptist Church is to
be the people of God, on mission with God,
motivated by a love for God, and a love for
others
-- Manley Baptist Church
Copyright 2007 Prentice Hall
Ch 2 -32
Vision Statement Examples
The Vision of USGS is to be a world leader
in the natural sciences through our scientific
excellence and responsiveness to society’s
needs
-- U.S. Geological Survey (USGS)
Copyright 2007 Prentice Hall
Ch 2 -33
Vision Statement Examples
To be the first choice in the printed
communications business. The first choice
is the best choice, and being the best is
what Atlanta Web pledges to work hard at
being—every day!
-- Atlanta Web Printers, Inc.
Copyright 2007 Prentice Hall
Ch 2 -34
Vision Statement Examples
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The University of Maine at Fort Kent is a quality small public institution, with a
curriculum tightly focused on undergraduate education in the traditions of the liberal
arts and sciences. The university will select academic and professional programs of
the highest quality, which respond to the needs of northern Maine and which build
upon the region's unique culture and rural environment. The university will be
recognized nationally and regionally as the education and outreach partner of choice.
We Are Committed to:
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A legacy of preparing quality teachers
High quality affordable and accessible education
Programs which foster a sense of community
Technically advanced academic and distance learning environments
Development of distinct rural-based identity and curriculum
Expanded rural research and development activities
Study and interaction with Maine's wilderness environments
Development of graduate program initiatives
Expanded outreach activities
A fully developed student life program that supports educational development
Student preparation to meet the changing need of society
Active community membership and cultural enrichment
The University of Maine at Fort Kent seeks to become the best small
university within the University of Maine System and beyond.
Copyright 2007 Prentice Hall
Ch 2 -35
Vision statement examples
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The mission and vision of Rainbow Cove, LLC is to
develop the properties owned on big Madawaska
Lake, Maine into several profitable business
ventures that satisfy the following four requirements;
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Benefit the economic condition of Northern Maine
Preserve the unique Swedish cultural heritage of the Big
Madawaska Lake region
Foster an appreciation for the natural beauty of Northern
Maine
Promote environmentally sound, four-season outdoor
recreational activities
Copyright 2007 Prentice Hall
Ch 2 -36
BUS 411
DAY 4
Copyright 2005 Prentice Hall
37
Agenda
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Review of last Class
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Mission and vision statements
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Questions?
Discuss why the process of developing a mission
statement is as important as the resulting document.
Identify the components of mission statements.
Discuss how clear vision and mission statements can
benefit other strategic-management activities.
Evaluate mission statements of different organizations.
Write good vision and mission statements.
Assignment #1 Due next Class
Copyright 2007 Prentice Hall
Ch 2 -38
Mission Statements
-- 90% of all companies have used a
mission statement in the previous five
years
Copyright 2007 Prentice Hall
Ch 2 -39
Mission Statements
“What is our business?”
Copyright 2007 Prentice Hall
Ch 2 -40
Mission Statements
•Enduring statement of purpose
•Distinguishes one firm from another
•Declares the firm’s reason for being
Copyright 2007 Prentice Hall
Ch 2 -41
Mission Statements
Also referred to as:
•Creed statement
•Statement of purpose
•Statement of philosophy
•Statement of business principles
Copyright 2007 Prentice Hall
Ch 2 -42
Copyright 2007 Prentice Hall
Ch 2 -43
Mission Statements
Reveal what an organization wants to be
and whom it wants to serve
Copyright 2007 Prentice Hall
Ch 2 -44
Mission Statements
Essential for effectively establishing
objectives and formulating strategies
Copyright 2007 Prentice Hall
Ch 2 -45
Vision & Mission
Many organizations develop both vision &
mission statements
Copyright 2007 Prentice Hall
Ch 2 -46
Vision & Mission
Profit & vision are necessary to effectively
motivate a workforce. Profit alone is not
enough.
Copyright 2007 Prentice Hall
Ch 2 -47
Vision & Mission
Shared vision creates a community of
interests
Copyright 2007 Prentice Hall
Ch 2 -48
Developing Vision & Mission
Clear mission is needed before alternative
strategies can be formulated and
implemented
Copyright 2007 Prentice Hall
Ch 2 -49
Developing Vision & Mission
Participation from diverse managers is
important in developing the mission
Copyright 2007 Prentice Hall
Ch 2 -50
Mission Statement Examples
It is the California Energy Commission’s
mission to assess, advocate, and act through
public/private partnerships to improve energy
systems that promote a strong economy and
healthy environment.
-- California Energy Commission
Copyright 2007 Prentice Hall
Ch 2 -51
Mission Statement Examples
The Bellevue Hospital, with respect,
compassion, integrity, and courage, honors the
individuality and confidentiality of our patients,
employees, and community, and is progressive
in anticipating and providing future health care
services.
-- The Bellevue Hospital
Copyright 2007 Prentice Hall
Ch 2 -52
Mission Statement Examples
John Deere has grown and prospered through
a long-standing partnership with the world’s
most productive farmers. Today, John Deere is
a global company with several equipment
operations and complementary service
businesses. These businesses are closely
interrelated, providing the company with
significant growth opportunities and other
synergistic benefits.
-- John Deere, Inc.
Copyright 2007 Prentice Hall
Ch 2 -53
Importance of Mission
Benefits from a strong mission
Unanimity of Purpose
Resource Allocation
Mission
Organizational Climate
Focal point for work
structure
Copyright 2007 Prentice Hall
Ch 2 -54
Effective Missions
Broad in scope
Generate strategic
alternatives
Not overly specific
Reconciles interests among
diverse stakeholders
Finely balanced between
specificity & generality
Copyright 2007 Prentice Hall
Ch 2 -55
Effective Missions
Arouse positive feelings &
emotions (Pride)
Motivate readers to action
Generate favorable
impression of the firm
Copyright 2007 Prentice Hall
Ch 2 -56
Effective Missions
Reflect future growth
Provide criteria for strategy
selection
Basis for generating &
evaluating strategic options
Are dynamic in nature
Copyright 2007 Prentice Hall
Ch 2 -57
Mission & Customer
Orientation – Vern McGinnis
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Define what the organization is
Define what it aspires to be
Limited to exclude some ventures
Broad enough to allow for growth
Distinguishes firm from all others
Stated clearly – understood by all
Copyright 2007 Prentice Hall
Ch 2 -58
Mission & Customer
Orientation
An Effective Mission Statement -
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Anticipates customer needs
Identifies customer needs
Provides product/service to satisfy needs
Copyright 2007 Prentice Hall
Ch 2 -59
Mission & Customer Orientation
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Customer manifesto (page 60)
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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 things, Offer me ideas, emotions,
ambience, feelings, and benefits.
Please, do not offer me things
Copyright 2007 Prentice Hall
Ch 2 -60
Social Policy & Mission
Managerial philosophy shapes social policy -
Affects development of vision & mission
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Responsibilities to –
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Consumers
Environmentalists
Minorities
Communities
Copyright 2007 Prentice Hall
Ch 2 -61
Social Policy & Mission
Social policy should be integrated in all
strategic-management activities
Mission should convey the social
responsibility of the firm
Copyright 2007 Prentice Hall
Ch 2 -62
Mission Statements
2005 Rated Best in Social Responsibility
1. Fannie Mae
7. Avon Products, Inc.
2. Proctor & Gamble
8. Hewlett-Packard Co.
3. Intel Corporation
9. Agilent Technologies
4. St. Paul Companies
10. Ecolab, Inc.
5. Green Mtn. Coffee
11. Imation Corp
6. Deer & Company
12. IBM
Copyright 2007 Prentice Hall
Ch 2 -63
Vision & Mission
Research results are mixed, however,
firms with formal mission statements
generally see a:
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2x average return on shareholder’s equity
Positive relationship to company performance
30% higher return on certain financial measures
Copyright 2007 Prentice Hall
Ch 2 -64
Customers
Products
Services
Markets
Technology
Employees
Mission
Elements
Survival
Growth
Profit
Public
Image
Self-Concept
Philosophy
Table 2-2 on Page 71
Copyright 2007 Prentice Hall
Ch 2 -65
Components and Questions That a
Mission Statement Should Answer
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6.
7.
8.
9.
Customers: Who are the firm’s customers?
Products or services: What are the firm’s major products?
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 the
firm?
Copyright 2007 Prentice Hall
Ch 2 -66
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.
Copyright 2007 Prentice Hall
Ch 2 -67
Ben & Jerry’s Mission
Ben & Jerry’s mission is to make, distribute and sell
the finest quality all-natural ice cream and related
products in a wide variety of innovative flavors made
from Vermont dairy products. To operate the
Company on a sound financial basis of profitable
growth, increasing value for our shareholders, and
creating career opportunities and financial rewards
for our employees. To operate the Company in a
way that actively recognizes the central role that
business plays in the structure of society by initiating
innovative ways to improve the quality of life of a
broad community—local, national and international.
Copyright 2007 Prentice Hall
Ch 2 -68
Mission Statement Evaluation Matrix
COMPONENTS
Customers
Products
Services
Markets
Concern for
Survival,
Growth,
Profitability
PepsiCo
Yes
No
No
Yes
No
Ben & Jerry's
No
Yes
Yes
Yes
No
Organization
Copyright 2007 Prentice Hall
Technology
Ch 2 -69
Mission Statement Evaluation Matrix
COMPONENTS
Philosophy
SelfConcept
Concern for
Public Image
Concern for
Employees
PepsiCo
Yes
No
No
No
Ben & Jerry's
No
Yes
Yes
Yes
Organization
Copyright 2007 Prentice Hall
Ch 2 -70
Group Work
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Three groups
Page 77 Experiential Exercise 2A
 A business mission statement is an integral part of strategic
management. It provides direction for formulating, implementing,
and evaluating strategic activities. This exercise will give you
practice evaluating mission statements, a skill that is a
prerequisite to writing a good mission statement.
 Evaluate (15 min)
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Criterion Productions, Inc.
Mid-America Plastics
Hatboro Area YMCA
UMFK
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On next slide
Rainbow Cove, LLC
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On next slide
Copyright 2007 Prentice Hall
Ch 2 -71
Mission Statement Examples
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UMFK
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The University of Maine at Fort Kent is a liberal arts based university offering quality
baccalaureate and associate degree programs responding to the needs of northern Maine.
The UMFK academic experience provides close interaction with faculty, small classes and the
use of leading technology to prepare students for lifelong learning and success as
professionals and engaged citizens of a democracy.
Our curriculum emphasizes the special challenges of rural communities in America. The
university preserves and fosters an appreciation of the Acadian and Franco-American
heritage and culture while welcoming students of all ethnic and racial heritages. We celebrate
our proximity to the wonder of Maine's wilderness and the joys of outdoor sports. UMFK
contributes to the economic, social and cultural development of the St. John Valley and we
believe that a diverse student body enriches the learning experience of all. In addition, the
University of Maine at Fort Kent joins the University of Maine at Machias and the University of
Maine at Presque Isle working in a consortium with the goal of maximizing efficiencies of
operation while enhancing educational quality and opportunity for all those served by the
three campus communities.
Rainbow Cove, LLC
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The mission and vision of Rainbow Cove, LLC is to develop the properties owned on
Big Madawaska Lake, Maine into several profitable business ventures that satisfy the
following four requirements;
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Benefit the economic condition of Northern Maine
Preserve the unique Swedish cultural heritage of the Big Madawaska Lake region
Foster an appreciation for the natural beauty of Northern Maine
Promote environmentally sound, four-season outdoor recreational activities
Copyright 2007 Prentice Hall
Ch 2 -72
Evaluation
Components
1
2
3
4
5
6
7
8
9
Criterion Productions
Yes
Yes
No
No
No
Yes
Yes
No
No
Mid-America Plastics
No
No
No
No
No
Yes
No
No
Yes
Hatboro YMCA
Yes
Yes
Yes
No
No
Yes
Yes
Yes
No
UMFK
Yes
Yes
Yes
No
No
No
Yes
Yes
No
Rainbow Cove LLC
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?
1.
2.
3.
4.
5.
6.
7.
8.
9.
Customers:
Products or services:
Markets:
Technology:
Concern for survival, growth, and profitability:
Philosophy:
Self-concept:
Concern for public image:
Concern for employees:
Copyright 2007 Prentice Hall
Ch 2 -73
Group Work
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There is no one best vision or mission statement for a given
organization. Analysts feel that Google needs a clear vision and
mission statement to prosper. Writing a mission statement that
includes desired (9) components—and at the same time is
inspiring and reconciliatory—requires careful thought. Mission
statements should not be too lengthy; statements under 200
words are desirable.
INSTRUCTIONS:
 Take 15 minutes to write a vision and mission statement for
Google. Scan the case for needed details as you prepare your
statements.
 Join with other classmates to form a group of three or four
people. Read each other’s statements silently. As a group, select
the best vision statement and the best mission statement from
your group.
 Read those “best” statements to the class.
Copyright 2007 Prentice Hall
Ch 2 -74
Text book answer
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Google Vision Statement: Google strives to be the leader in
technology-based solutions for consumer and business
problems.
Google Mission Statement: Google seeks to maintain its loyal
customer base and attract new customers in both current and
developing markets with its commitment to quality and promise to
put its users above all else (1, 2, 3, 6, 8). Google will lead the
industry via a commitment to innovation, service, growth, and
quality (4, 5). Its solutions for businesses ensure profitability
while providing desirable information for consumers (5). Google
desires to instill the belief that the company is a set of
capabilities, not just a product or brand (6, 7, 8). It recognizes
that its own success is dependent upon the success of its
employees (9).
Copyright 2007 Prentice Hall
Ch 2 -75
For Review (Chapter 2)
Key Terms & Concepts
Concern for Employees
Customers
Concern for Public Image
Markets
Survival, Growth, &
Profitability
Mission Statement
Components
Creed Statement
Managerial Philosophy
Copyright 2007 Prentice Hall
Ch 2 -76
For Review (Chapter 2)
Key Terms & Concepts
Self Concept
Stakeholders
Social Policy
Vision Statement
Copyright 2007 Prentice Hall
Ch 2 -77