Mission/Vision/Strategy Assignment (Maximum of 2 pages)
Mission Statement
•
Purpose/reason for organization
•
Promotes shared expectations
•
Communicates public image
•
Who we are; what we do; what we aspire to
•
The Business Mission Statement identifies stakeholders and needs. Limiting stakeholders and needs
establishes a scope. For example, suppose we limit stakeholders and needs to:
•
Stakeholders
Needs
High End
customers
Ideal positioning (small size, high performance) and new
designs, easy credit terms, reliable product delivery
Performance
customers
High reliability, ideal positioning, easy credit terms, reliable
product delivery
Size customers
Ideal positioning, young designs, easy credit terms, reliable
product delivery
Shareholders
High stock price, high dividend stream
Vendors
Quick payment, predictable orders
Bondholders
Assets/Equity (leverage) between 1.8 and 2.8
Employees
High salaries, high productivity, low job uncertainty
From this list one can easily craft a short mission statement that offers real value to managers, employees,
and stakeholders. Note that the list above leaves out several possible stakeholder groups (bankers, low
technology customers, government, special interest groups like environmentalists, etc.) and needs (low
price, time-tested designs, high profit sharing, etc.) that a different mission might include.
Vision Statement
The vision statement describes our company six years from now. Any good vision statement makes choices
between alternatives. For example, if your vision places you in the Traditional and Low End, you implicitly plan to give
up High End, Size, and Performance.
Many Vision Statements attempt to mix the mission statement with a vision statement. This is a mistake. The mission
statement is timeless. A vision statement is a snapshot of the company at a specific data in the future. What are your
expectations for the key factors that measure your success (i.e. Markets, Market Share, Market Capitalization, ROE,
ROA, ROS, Profits, Stock Price, Asset Turnover).
Strategy (Business, Market Segment and Functional Strategies)
At the beginning of the simulation, your team faces an unusual business situation – all companies and products are
identical to each other. In the real world this situation rarely if ever occurs. The closest analog might be a highly
regulated industry.
Looking into the future, the simulated industry will rapidly differentiate. Nothing you can do will stop it. Given time, the
industry will evolve into a state where competitors occupy defendable strategic positions. There are two important
questions. “How long will the process take?” “Will two or more competitors attempt to occupy the same position?”
You can review the short tutorial on the Capsim website titled, “Six Basic Strategies”. The tutorial is in the section
titled "Help" -> “Manager Guide” on your "Welcome" page.
With this as background, develop a strategy you would like your team to pursue. You will address each Market
Segment (Low, Traditional, High, Size and Performance) and each functional area (R&D, Production, Marketing and
Finance). Some issues you should address are:
1. Segments. Which segments matter to you? How much share of those segments must you achieve to be an
“average competitor” in the overall industry? For example, if you choose to play only in Traditional and Low End, you
would have to command a higher share of those segments to achieve “average industry sales”.
2. Profit potential.
3. The speed at which you can create a defendable position. For example, new products typically take two years to
bring to market. Significant productivity improvements could take several years.
4. Priorities. Which products are most important to you? Which are least important?
5. How will you fund your strategy?
5 Elements of Good Strategy (Wheelen & Hunger)
1.
Arenas – Where?
2.
Vehicles – How to get there?
3.
Differentiators – How to win?
4.
Staging – Speed and sequence - tactics
5.
Economic logic – How will we gain a return?
The result will be a two page word document that you will email to me for your Team (one copy).