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Vision, Goals, and Values in Business

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0% found this document useful (0 votes)
16 views3 pages

Vision, Goals, and Values in Business

Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Readings on Vision, Mission, Strategic Goals, and

Values

Article 1. Alibaba’s Vision Created The World’s Most Valuable Online Ecosystem
Alibaba has become one of the leading online retailers in the world with a market
capitalization of more than $400 billion, exceeding the value of more traditional retailers
such as Walmart. Jack Ma started Alibaba in 1999 as a business-to-business (B2B) portal
connecting Chinese manufacturing companies with the world. Ma quickly replicated the
initial success of the B2B portal to other e-commerce areas, such as consumer-to-consumer
(C2C) markets with the Taobao marketplace launched in 2003.
However, while Alibaba’s initial business model was very successful, it was not until 2007
that Alibaba became the world-beater it is today. This was when Jack Ma and his
management team agreed on a new vision for the Chinese e-commerce giant: “foster the
development of an open, coordinated, prosperous e-commerce ecosystem.” This vision
transformed Alibaba’s business model from simply connecting sellers and buyers into an
ecosystem providing all resources that Chinese online businesses would need to succeed.
Over time, Alibaba moved more and more retail functions to its sprawling online platform.
Alibaba’s ecosystem today includes a startling array of businesses, including commerce,
payment, advertising, lending, and shipping. In other words, Alibaba does what Amazon,
eBay, PayPal, Google, LendingClub, and FedEx do in the United States, but in a
coordinated and data-driven network controlled by Alibaba.
Bringing these varied businesses into the Alibaba ecosystem is not only customer-centric,
but also efficient. Alibaba uses machine-learning technology to leverage the data created
in its ecosystem. For instance, Alibaba’s lending business—called Ant Financial—
automates lending decisions to small businesses, allowing Alibaba to make lending
decisions in a matter of minutes without the input or supervision of a banker. This data-
driven lending business assesses the strengths of the borrower’s business, the competitive
pressure from rival vendors, and the overall likelihood of repayment, all with the data
available in the Alibaba ecosystem.
Alibaba’s leadership team understands the value of its ecosystem and invests heavily in
protecting it. For instance, a recent loyalty program, called 88VIP, either costs 88 RMB
($13) or 888 RMB ($130). Members who contribute more to the value of the ecosystem by
writing reviews or shopping at different Alibaba businesses are charged the lower price.
Alibaba not only realizes direct benefits from this membership model by collecting
membership fees, but also reaps indirect benefits by creating an engaged and credible
customer base, which further raises the value of the Alibaba ecosystem in a virtuous cycle.

Article 2. Examples of Company Objectives


WALGREENS

 Increase revenues from $72 billion in 2012 to more than $130 billion in 2016
 Increase operating income from $3.5 billion in 2012 to $8.5 billion to $9.0 billion
by 2016
 Increase operating cash flow from $4.4 billion in 2012 to approximately $8 billion
in 2016
 Generate $1 billion in cost savings from combined pharmacy and general
merchandise purchasing synergies by 2016
PEPSICO

 Accelerate top-line growth; build and expand our better-for-you snacks and
beverages and nutrition businesses
 Improve our water use efficiency by 20 percent per unit of production by 2015
 Reduce packaging weight by 350 million pounds
 Improve our electricity use efficiency by 20 percent per unit of production by 2015
 Maintain appropriate financial flexibility with ready access to global capital and
credit markets at favorable interest rates.
YUM! BRANDS (KFC, PIZZA HUT, TACO BELL, WINGSTREET)

 Increase operating profit derived from operations in emerging markets from 48


percent in 2010 to 57 percent in 2015
 Increase number of KFC units in Africa from 655 in 2010 to 2,100 in 2020
 Increase KFC revenues in Africa from $865 million in 2010 to $1.94 billion in 2014
 Increase number of KFC units in India from 101 in 2010 to 1,250 in 2020
 Increase number of KFC units in Vietnam from 87 in 2010 to 500 in 2020
 Increase number of KFC units in Russia from 150 in 2010 to 500 in 2020; open 100
new Taco Bell units in international markets in 2015
 Increase annual cash flows from operations from $1.5 billion in 2010 to $2.1 billion
in 2015
Article 3. Organizational Values at Johnson & Johnson: How their Credo Guides
Strategy
General Robert Wood Johnson guided Johnson & Johnson from a small, family-owned
business to a worldwide enterprise. In doing so he had an enlightened view of a
corporation’s responsibilities beyond the manufacturing and marketing of products. In
1935, in a pamphlet titled Try Reality, he urged his fellow industrialists to embrace ‘a new
industrial philosophy’. Johnson defined this as the corporation’s responsibility to
customers, employees, the community, and stockholders.
Eight years later, in 1943, Johnson wrote and first published the Johnson & Johnson Credo,
a one-page document outlining these responsibilities in greater detail. Putting customers
first and stockholders last was a refreshing approach to the management of a business.
However, Johnson was a practical businessman. He believed that by putting the customer
first the business would be well served, and it was. Johnson saw to it that his company
embraced the Credo, and he urged his management to apply it as part of their everyday
business philosophy.
In 1982 Johnson & Johnson faced a crisis. A drug, Tylenol, from one of its operating
companies, was altered and cyanide placed in the capsule form of the product. This resulted
in seven deaths. Johnson & Johnson’s strategic response was inspired by the philosophy
embodied in the Credo. The product was voluntarily recalled and destroyed, even though
testing found the remaining capsules to be safe. Johnson & Johnson took a $100 million
charge against earnings. In 1986, as a result of a second tampering incident and another
fatality, Johnson & Johnson took the decision to discontinue the sale of Tylenol in capsule
form. The operating company reintroduced Tylenol in tamper-proof packaging and
regained its leading share of the analgesic market. Faced with the loss of millions of dollars,
the values that are embodied in Johnson & Johnson’s Credo guided its strategic response
and ensured that its quick and honest handling of the crisis preserved the company’s
reputation.
When Robert Wood Johnson wrote and then institutionalized the Credo within Johnson &
Johnson, he never suggested that it guaranteed perfection. But its principles have become
a constant goal, as well as a source of inspiration, for all who are part of the Johnson &
Johnson Family of Companies.

Common questions

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Alibaba's ecosystem approach differs significantly from traditional retailer models. While traditional retailers focus primarily on physical product sales, Alibaba integrates a comprehensive digital ecosystem offering various services like commerce, payment, advertising, and logistics. This approach aligns with multiple industry functions, similar to a combination of Amazon, eBay, PayPal, and others, under one roof. By leveraging machine learning and data analytics, Alibaba enhances decision-making and efficiency across its platforms. In contrast, traditional models tend to operate within more siloed structures, often lacking the integrated data-driven capabilities that power Alibaba’s operations .

Alibaba's adoption of a new vision in 2007 transformed its business model by shifting from merely connecting buyers and sellers to creating an "open, coordinated, prosperous e-commerce ecosystem." This new approach led to the development of a comprehensive online platform that includes commerce, payment, advertising, lending, and shipping services. Through this ecosystem, Alibaba provides all the resources necessary for online businesses to succeed, mirroring the combined services of companies like Amazon, eBay, PayPal, Google, LendingClub, and FedEx. Additionally, Alibaba integrated machine learning technologies to enhance data-driven operations, such as revolutionizing its lending business with automated decision-making processes .

Pepsico's sustainability objectives, such as improving water and electricity use efficiency by 20%, reducing packaging weight, and maintaining financial flexibility, align with its long-term strategic interests by promoting sustainable growth and operational resilience. These initiatives reduce operational costs, minimize environmental impact, and align with consumer preferences for environmentally responsible companies. Furthermore, maintaining financial flexibility ensures Pepsico can navigate market fluctuations and capitalize on investment opportunities, thereby supporting sustainable business expansion and innovation .

Johnson & Johnson's Credo significantly guided the company's handling of the Tylenol crisis in 1982. The Credo emphasizes the corporation's responsibility to customers, which led Johnson & Johnson to prioritize consumer safety over profits. As a result, they voluntarily recalled and destroyed all Tylenol capsules despite the financial loss of $100 million. This strategic response, driven by the Credo's principles, maintained Johnson & Johnson's reputation and demonstrated their commitment to ethical business practices .

General Robert Wood Johnson's philosophy, encapsulated in the Johnson & Johnson Credo, fundamentally influenced the company's strategic direction. By placing customer interests above shareholder profits, the Credo guided the corporation to uphold ethical standards in business practices. This was evident during the Tylenol crisis, where Johnson & Johnson's strategic response reflected the Credo's values, prioritizing consumer safety and maintaining the company's integrity. This philosophy encouraged a long-term perspective in business decisions, strengthening Johnson & Johnson's market position and fostering a positive corporate culture .

Alibaba's data-driven lending business stands out from traditional banking models by automating the lending decision process without human intervention. This innovative approach utilizes data analytics within the Alibaba ecosystem to assess various factors such as the borrower's business health and competitive environment, enabling rapid and objective loan approvals. In contrast, traditional banking relies heavily on manual evaluations and prolonged processing times. Alibaba's model enhances efficiency, scalability, and accessibility for small businesses, expanding financial services beyond the reach of conventional banks .

Alibaba's 88VIP loyalty program plays a crucial role in enhancing its ecosystem by incentivizing customer engagement and spending across its diverse business segments. The program offers membership at different price points depending on user activity, thus encouraging increased interaction within Alibaba's platforms. This model not only generates direct revenue through membership fees but also indirectly benefits Alibaba by cultivating a credible and engaged customer base, which further amplifies the ecosystem's value and efficiency. The program is an example of how Alibaba integrates customer-centric strategies to reinforce its holistic business approach .

Walgreens set specific strategic objectives to achieve revenue and operational growth by 2016, including increasing revenues from $72 billion to over $130 billion, doubling operating income, and improving operating cash flow. Additionally, Walgreens aimed to generate $1 billion in cost savings through purchasing synergies. These goals reflect strategic planning by emphasizing both top-line and bottom-line growth through revenue expansion, cost efficiency, and improved cash flow management, which collectively enhance the company's financial health and competitive positioning .

Yum! Brands' strategic focus on expanding in emerging markets has significantly influenced its global presence by increasing its market share and revenue from these regions. By establishing and expanding brands like KFC in countries like Africa, India, Vietnam, and Russia, Yum! Brands has tapped into growing consumer bases and strengthening market positioning. This expansion strategy contributes to diversifying revenue sources and enhancing brand recognition globally, demonstrating the company's commitment to capturing growth in high-potential regions .

Johnson & Johnson's Credo is integral in shaping its organizational culture and decision-making by establishing a value-driven framework that prioritizes customer well-being, employee welfare, and community responsibility. This ethos guides all strategic and operational decisions, fostering a company culture centered on ethical practices and long-term sustainability. The Credo influences decision-making by setting clear priorities, as demonstrated in their swift and consumer-first response to the Tylenol crisis, thereby ensuring consistency in ethical standards across the organization .

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