Strategic Management: A Competitive
Advantage Approach, Concepts and
Cases
Eighteenth Edition
Chapter 2
Business Vision and Mission
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Learning Objectives
2.1 Describe the nature and role of vision statements in
strategic management.
2.2 Identify the characteristics of a vision statement.
2.3 Describe the nature and role of mission statements in
strategic management.
2.4 Identify and discuss the characteristics of an effective
mission statement.
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Learning Objectives (continued)
2.5 Identify and discuss the components of mission
statements.
2.6 Explain the need for core values statements in strategic
management.
2.7 Discuss the benefits of a firm having clear vision and
mission statements.
2.8 Evaluate and write vision and mission statements for
different organizations.
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Figure 2.1
The Comprehensive, Integrative Strategic Management Model
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 1 (February 1989): 91. See
also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance Scorecard of David’s
Strategic Modeling at Industrial Business for National Construction Contractor of Indonesia,” Journal of Mathematics and
Technology no. 4 (October 2010): 20. See also Meredith E. David, Fred R. David, and Forest R. David, “Closing the Gap
Between Graduates’ Skills and Employers’ Requirements: A Focus on the Strategic Management Capstone Business
Course,” Administrative Sciences 11, no. 1 (2021): 10-26.
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Your
80th
BD
[Link]
LtUs
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Vision
The View
from the
Top!
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What is a Vision
• Vision - A clear, specific, compelling picture of
what the organization will look like at a specific
time in the future (three to five years), including
those few key metrics that define success
(Stanford Business School)
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What is a Vision
• A vision statement is created as a compelling
verbal image and forms a mental picture of the
future.
• It should define what we seek to become as an
organization. The vision should generate human
energy and engagement. In other words, it
should provide direction and focus for the
organization.
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Vision Statement
A vision statement should answer the basic question:
“What do we want to become?”
• The vision statement provides the foundation for a
comprehensive mission statement.
• For this reason, it should be developed first.
• Vision statements should be written from the customer
perspective.
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• Bill articulated the Microsoft Vision as:
“A computer on every desk and in every
home running Microsoft software.”
The Microsoft Vision drove the entire company
forward. Everyone you met in the company could
articulate it. It was a shared vision.
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Characteristics of a Vision Statement
The vision statement should have these five characteristics;
1. Clear: reveals the industry type and what the firm strives
to become.
2. Futuristic: reveals what the firm strives to become or
accomplish within 5 years.
3. Concise: one sentence in length.
4. Unique: reveals the firm’s competitive advantage.
5. Inspiring: motivates the readers to support the firm.
The 5 out of 5 test
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• Dr Pepper Snapple: to be the best
beverage business globally; our brands
are synonymous with refreshment, fun,
and flavor today and tomorrow.
Vision
Statement • Starbucks: to be the premier purveyor of
Examples the finest coffee in the world while
maintaining uncompromising principles as
we steadily grow.
• Hilton Worldwide: to fill the Earth with the
light and warmth of hospitality by
delivering exceptional experiences—every
hotel and guest for all time.
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• IBM: to be the world’s most successful
information technology company focused
Vision on helping customers apply technology to
Statement solve their problems now and in the future.
Examples
• Kellogg: to enrich and delight the world
through foods and brands that matter
today and tomorrow.
• Harley-Davidson: to fulfill dreams through
the experiences of motorcycling for all
time.
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Why do we need a vision?
• Vision provides direction. When we spell out the
vision for the organization, we focus everyone’s
attention on the future and determine the path we will
take to get there.
• Vision determines decisions. The vision influences the
decisions, no matter how big or how small, that
executives, managers, and employees make every day
in a business. This influence can be positive or
negative, depending on how well defined the vision is.
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Why do we need a vision?
• Vision inspires people. A clear vision excites and
ignites people to action. People want to work for an
organization that sets its sights high.
• Vision allows for perseverance in the face of adversity.
Organizations, boards, executives, and their employees
often face many hardships from a multitude of
sources. Having a vision that serves as a company’s
“guiding star” enables people to overcome imposing
obstacles.
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Alignment
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Mission Statement
Mission statement: an enduring statement of purpose that
distinguishes one organization from other similar enterprises.
• A declaration of an organization’s “reason for being.”
• It answers the pivotal question “What is our business?”
• It is essential for effectively establishing objectives and
formulating strategies.
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Mission Statement (continued)
• It reveals what an organization wants to be
and whom it wants to serve.
• It is also called a creed statement العقيدة, a
statement of purpose, a statement of
philosophy, a statement of beliefs, and a
statement of business principles.
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Characteristics of a Mission Statement (1 of 4)
• A good mission statement allows for the
generation and consideration of a range of
feasible alternative objectives and strategies
without unduly stifling management creativity.
• A mission statement needs to be broad to
reconcile differences effectively among and
appeal to an organization's diverse stakeholders.
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3-25
Characteristics of a Mission Statement (2 of 4)
Stakeholders
Copyright © 2016 Pearson Education, Ltd.
3 - 21
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Characteristics of a Mission
Statement (3 of 4)
1. Broad in scope; does not include monetary
amounts, numbers, percentages, ratios, or
objectives.
2. Fewer than 100 words in length.
3. Inspiring.
4. Identifies the utility of a firm’s products.
5. Reveals that the firm is socially responsible.
6. Reveals that the firm is environmentally
responsible.
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Characteristics of a Mission
Statement (4 of 4)
7. Includes nine components: customers, products or
services, markets, technology, concern for
survival/growth/profits, philosophy, distinctive
competence, concern for public image, concern for
employees.
8. Reconciliatory.
9. Enduring.
10. Attracts customers.
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Insight on Scope of Mission
Statement
When written from a customer perspective, mission
statements can spur employees, salespersons, and
managers to provide exemplary customer service, which
arguably would enhance customer loyalty and translate into
customers being “on a mission” to seek out, use, and
promote the firm’s products and services.
Mission statements should be developed after considering
utility statements which identify the value of the firm’s
offerings to customers.
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Utility Statements
• Do not offer me things. Offer me benefits.
• 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.
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Utility Statements (continued)
• Do not offer me CDs.
– Offer me leisure and the sound of music.
• Do not offer me tools.
– Offer me the benefits and the pleasure that come
from making beautiful things.
• Do not offer me furniture.
– Offer me comfort and the quietness of a cozy
place.
• Do not offer me things.
– Offer me ideas, emotions, ambience, feelings,
and benefits.
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Utility
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The 9
Components
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Mission Statement Components
1. Customers-Who are the firm’s customers?
2. Products or services-What are the firm’s major products or
services?
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. Distinctive competence-What is the firm’s 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?
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Importance of Vision and Mission
Statements
• To make sure all employees/managers understand the
firm’s purpose or reason for being.
• To provide a basis for prioritization of key internal and
external factors utilized to formulate feasible strategies.
• To provide a basis for the allocation of resources.
• To provide a basis for organizing work, departments,
activities, and segments around a common purpose.
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Alignment
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Table 2.5
Ten Benefits of Having a Clear Vision and Mission
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including
internal and external assessment, establishing objectives, developing
strategies, choosing among alternative strategies, devising policies,
establishing organizational structure, allocating resources, and
evaluating performance.
3. Provide direction.
4. Provide a focal point for all stakeholders of the firm.
5. Resolve divergent views among managers.
6. Promote a sense of shared expectations among all managers and
employees.
7. Project a sense of worth and intent to all stakeholders.
8. Project an organized, motivated organization worthy of support.
9. Achieve higher organizational performance.
[Link] synergy among all managers and employees.
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Developing Vision and Mission
Statements
A widely used approach includes:
• Ask all managers to read this chapter as background
information. Involve as many managers as possible.
• Ask managers themselves to prepare a vision and mission
statement for the organization.
• A facilitator or committee of top managers should then
merge these statements into a single document and
distribute the draft statements to all managers.
• A request for modifications, additions, and deletions is
needed next, along with a meeting to revise the document.
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Example Mission Statement (Evaluate it)
A proposed mission statement for Nestlé S.A. could be:
“Our philosophy at Nestlé is to hire the most talented
scientists (?) and most devoted employees (?) as we strive
to provide the most nutritious foods, drinks, and pet foods (?)
to our customers. Quality, healthy, affordable foods (?)
should be available to everyone around the world (?, ?). We
are committed to controlling costs (?) and conducting
business in an ethical way (?) that has a neutral impact on
the environment (?).”
Identify the components and count how many words?
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Example Mission Statement (Answer)
A proposed mission statement for Nestlé S.A. could be:
“Our philosophy at Nestlé is to hire the most talented
scientists (4) and most devoted employees (9) as we strive
to provide the most nutritious foods, drinks, and pet foods (2)
to our customers. Quality, healthy, affordable foods (7)
should be available to everyone around the world (1, 3). We
are committed to controlling costs (5) and conducting
business in an ethical way (6) that has a neutral impact on
the environment (8).”
• Note that this mission statement has all 9 components of
an exemplary mission statement and is only 64 words
long.
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Exercise
• Citigroup
• FedEx
• Singapore Air
• Colgate
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Analyze and evaluate - 1
• Citigroup’s mission (paraphrased) is presented as follows:
• We strive to be a trusted partner for customers by responsibly
providing financial services, safeguarding assets, lending money,
making payments, and accessing capital markets on behalf of our
clients. Here at Citigroup we connect millions of people across
hundreds of countries and cities. We protect individual and
corporate savings, we help customers make the purchases, and we
advise people on how to invest for future needs. We provide
financing and support to local, state, national, and international
governments. We serve all customers, near and far, responsibly and
ethically, prudently managing risk, in order to earn and maintain
the public’s trust.
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Analyze and evaluate - 2
• Current Mission Statement – Federal Express (FedEx)
• We will produce superior financial returns for shareowners by
providing high value-added logistics, transportation and related
business services through focused operating companies. Our
customer requirements will be met in the highest quality manner
appropriate to each market segment served. We will strive to
develop mutually rewarding relationships with our team members,
partners, and suppliers. Safety will be the first consideration in all
operations. Corporate activities will be conducted to the highest
ethical and professional standards.
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Analyze and evaluate - 3
• Singapore Air provides a mission statement in their 2021
Annual Report, paraphrased as follows:
•
• Mission statement: “We are committed to offering exceptional
air travel services globally, while providing employees great pay
and benefits, and providing excellent returns to our shareholders.”
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Analyze and evaluate - 4
• Colgate’s Mission Statement (Paraphrased)
We are committed to serving others with compassion,
integrity, and honesty in all situations. We listen with
respect to others, value diversity, and are committed to
protect the global environment. We strive to enhance the
communities where our employees live and work and to
be compliant globally with government laws and
regulations.
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Proposed
Solutions
• Citigroup
• FedEx
• Singapore Air
• Colgate
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Analyze and evaluate - 1
• Citigroup’s mission (paraphrased) is presented as follows:
• We strive to be a trusted partner for customers by responsibly
providing financial services, safeguarding assets, lending money, making
payments, and accessing capital markets on behalf of our clients. Here at
Citigroup we connect millions of people across hundreds of countries
and cities. We protect individual and corporate savings, we help
customers make the purchases, and we advise people on how to invest
for future needs. We provide financing and support to local, state,
national, and international governments. We serve all customers, near
and far, responsibly and ethically, prudently managing risk, in order to
earn and maintain the public’s trust.
• Missing technology (4), survival and growth (5) and
employees (9)
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Citigroup 1 – Proposed (4, 5 & 9)
• As a trusted partner for customers, we use technology (4) to
responsibly provide financial services, safeguarding assets, lending
money, making payments, and accessing capital markets on behalf
of our clients (1, 2) . We create shareholders value (5) by
connecting millions of people across hundreds of countries and
cities (3). We protect individual and corporate savings, we help
customers make the purchases, and we advise people on how to
invest for future needs (7). We provide financing and support to
local, state, national, and international governments (8). Our
employees proudly serve (9) all customers responsibly and
ethically, prudently managing risk, in order to earn and maintain
the public’s trust (6).
(100 words)
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Analyze and evaluate
• Current Mission Statement – Federal Express (FedEx)
• We will produce superior financial returns for shareowners (5)
by providing high value-added logistics, transportation and related
business services (2) through focused operating companies. Our
customer requirements will be met in the highest quality manner
appropriate to each market segment served (7). We will strive to
develop mutually rewarding relationships with our team members
(9), partners, and suppliers (8). Safety will be the first
consideration in all operations. Corporate activities will be
conducted to the highest ethical and professional standards (6).
• Missing customers (1), market (3), technology (4)
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FedEx – Proposed
• FedEx Corporation’s mission is to continue to provide high
value-added (7) logistics, transportation and related business
services (2) to individuals and businesses (1) all across the world
(3). We strive to meet customer requirements in the highest
quality manner by using the latest logistics technology (4), and in
turn, produce superior financial returns (5) for our shareholders.
Our employees are our greatest asset, so safety will be the first
consideration in all operations (9). Corporate activities will be
conducted to the highest ethical and professional standards (6).
Our goal is to provide the best logistics services, while keeping
our customers, employees, and communities (8) at top of mind.
(99 words)
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Singapore Air – Proposed
• “We are committed to offering exceptional air travel
services (2, 7) to people/customers globally (1, 3),
while providing employees great pay and benefits (6,
9), and providing excellent returns to our shareholders
(5).” We use cutting edge technologies (4) to
continually reduce our carbon footprint (8).
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Analyze and evaluate - Colgate
We are committed to serving others with compassion,
integrity, and honesty (6) in all situations. We listen with
respect to others, value diversity, and are committed to
protect the global environment (8). We strive to enhance
the communities where our employees live and work (9)
and to be compliant globally with government laws and
regulations.
• Missing customers (1), products/services (2),
markets (3), technology (4), growth (5), and
distinctive competence (7)
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Colgate - Proposed
We are a large global consumer products company
specializing in the global production and distribution (3)
of household, health care, personal care, and veterinary
products (2). We provide great returns to our shareholders
(5) and excellent benefits and pay to our employees (9).
We give back generously to the communities where we
operate (8) and care deeply for mankind and life at all
levels (7). We service customers (1) using the latest
technologies (4) and the highest levels of integrity (6).
.
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Figure 2.2
How to Gain and Sustain Competitive Advantages
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Vision, Mission, Values, Goals, Objectives
• You SEE a Vision (a verbal image of what we ultimately
want to achieve)
• You HAVE a Mission (your business purpose and market
sector)
• You BELIEVE in Values (your moral compass and expected
behavior)
• You PURSUE Goals (the results we choose to accomplish -
Goals guide your decisions and actions. However, they
usually do not involve measurable results, and therefore,
do not change as often as objectives.)
• You ACHIEVE Objectives (measurable targets and activities
along the path to the achievement of goals)
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