Ismi Rajiani
PhD Management Science MBA International Business Management
Chapter 2 The Business Vision & Mission
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Ch 2 -2
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
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Vision
Agreement on the basic vision for which the firm strives to achieve in the long term is especially important.
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Vision
What do we want to become?
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Ch 2 -6
Vision Statement Examples
General Motors vision is to be the world leader in transportation products and related services.
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Ch 2 -7
Vision Statement Examples
Dells vision is to create a company culture where environmental excellence is second nature.
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Ch 2 -8
Vision
Clear Business Vision Comprehensive Mission Statement
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Ch 2 -9
Reasons for having a vision statement
Gets team focused. Shows a picture of where the company is going. Instills focus, discipline, and structure within the organization. Ensures that team understands company direction.
Mission Statement
Answers the question:
What
is our business?
Reveals:
what
the organization wants to be whom we want to serve
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Ch 2 -12
Mission Statement
An enduring statement of purpose that distinguishes one organization from other similar enterprises A declaration of an organizations reason for being
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Mission Statements are also called
Creed statement Statement of purpose Statement of philosophy Statement of beliefs Statement of business principles A statement defining our business
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Vision & Mission
Great benefits can be achieved if an organization
Systematically
revisits their vision and mission statement Treats them as living documents Considers them to be an integral part of the firms culture
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Vision & Mission
Profit & vision are necessary to effectively motivate a workforce
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Ch 2 -16
The Difference between Vision & Mission
Vision - The Future Definition: The way in which one sees or conceives something; a mental image; An overall statement of the goal of the organization. Vision should describe what will be achieved in the wider sphere if the organization and others are successful in achieving their individual missions. Mission - The Present Definition: An assignment one is sent to carry out; a selfimposed duty. A mission statement identifies the reason for the existence of the organization. The statement should be linked to the overall operations and business of the organization A Mission statement is more specific to what the enterprise can achieve itself.
Products or Services Customers
Markets
Employees
Mission Components
Technology
Public Image Self-Concept
Survival, Growth, Profits Philosophy
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Developing Vision & Mission
A clear mission is needed before alternative strategies can be formulated and implemented
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Ch 2 -19
Review
What is strategy?
What are the Strategic Implications of High
Technology?
Mission of Ford Our mission: we are a global, diverse family with a proud inheritance, providing exceptional products and services.
Vision of Ford Our vision: become the main company of the world in products and services of the car.
What is relationship between Vision, Mission and Strategy?
Strategy determine how to achieve Vision and Mission
Vision & Mission
Strategy
Objective
Objective indicates how well the result of strategy
Vision Statement
To be the largest low cost airline in Asia and serving the 3 billion people
who are currently underserved with poor connectivity and high fares.
Mission Statement
To be the best company to work for whereby employees are treated as part of a big family. Create a globally recognized ASEAN brand. To attain the lowest cost so that everyone can fly with Air Asia. Maintain the highest quality product, embracing technology to reduce cost and enhance service levels.
Key Strategies
Safety First High Aircraft Utilization Low Fare, No Frills Streamline Operations Lean Distribution System Point to Point Network
In terms of the three key players (competitors, customers, company) strategy is defined as the way in which a corporation endeavors to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs.
-Kenichi Ohmae The Mind of the Strategist
Strategy in Brief!
Competitors : Differentiate Company : Use the strength Customers: Satisfy the need
Strategy LEVEL!
Corporate
Business
Functional
Communication Speed
Internet, mobile communications Wireless transmission Multimedia Instantaneous Electricity, global access Rail, car air travel Radio/ TV/ telephones
Telegraph/Newspapers Steam power, rail Increasing globalisation Printing Greater international trade colonisation
Travel still slow but ships bigger and better Travel slow Foot or horse carriage Some international trade
3000BC
Figure 1.1
1500 Timeline The impact of technology on marketing
1000
1800
2000
Challenges for Strategy
New designs must win market share
Role
of distribution channel Customer perceptions
Competition
From
higher performance to lower costs and differentiation through minor design variations and strategic positioning tactics
incremental
changes take place
Segmenting - Targeting - Positioning
Key Issues
Why so many excellent products fail?
90-95
% of new product ideas newer reach market 30-50 % of introduced products seem to fail on the market
Are there differences between high-tech and low-tech product concerning the commercialisation process? Critical issue: Time-to-Market Using the Market Development Model
Technology Adoption Life-Cycle
Pragmatists: Stick with the herd! Visionaries: Get ahead of the herd! Techies: Try it! 2,5%
Innovators
Conservatives: Hold on! Skeptics: No way!
33% 14%
Early Early Majority Adopters
33% 16,5%
Late Majority Laggards
Pragmatists create the dynamics of high-tech market development.
Source: Moore (1998)
Innovators - Technology Enthusiasts
Primary Motivation:
Learn
about new technologies for their own sake
Key Characteristics:
Strong
aptitude for technical information Like to alpha test new products Can ignore the missing elements Do whatever they can to help
Challenges:
Want
unrestricted access to top technical people Want no-profit pricing (preferably free)
Early Adopters - The Visionaries
Primary Motivation:
Gain dramatic competitive advantage via revolutionary breakthrough
Key Characteristics:
Great
imaginations for strategic applications Attracted by high-risk, high-reward propositions Will commit to supply the missing elements Perceive order-of-magnitude gains so not price-sensitive
Challenges:
Want
rapid time-to-market Demand high degree of customization and support
Early Majority - Pragmatists
Primary Motivation:
Gain productivity improvements via evolutionary change
Key Characteristics:
Astute managers of mission-critical applications Understand real-world issues and tradeoffs Focus on proven applications Like to go with the market leader
Challenges:
Insist on good references from trusted colleagues Want to see the solution in production at the reference site
Late Majority - Conservatives
Primary Motivation:
Just
stay even with the competition.
Key Characteristics:
Better
with people than technology Risk averse Price-sensitive Highly reliant on a single, trusted advisor
Challenges:
Need
completely pre-assembled solutions Would benefit from value-added services but do not want to pay for them
Laggards - Skeptics
Primary Motivation:
Maintain
status quo.
Key Characteristics:
Good
at debunking marketing hype Disbelieve productivity-improvement arguments Believe in the law of unintended consequences Seek to block purchases of new technology
Challenges:
Not
a customer Can be formidable opposition to early adoption
Discovering the Chasm
Chasm
Early Market
Mainstream Market
High-tech products are warmly welcome in an early market (techies & visionaries) but then will fall into a chasm (sales will falter and often plummet)
Visionaries dont see enough of a head start Pragmatists see no reason to start yet
Crossing the chasm gaining the acceptance within a mainstream market - becomes and organisational imperative but very few high-tech products cross these chasms Source: Moore (1998)
Crossing the Chasm
Product vendors problem
80% of many solutions100% of none Pragmatists won't buy 80% solutions Committing to the most common enhancement requests Never finishing any one customer's wish-list Focus on a single beachhead Accelerate formation of that segment's whole product
Source: Moore (1998)
Most common vendor mistake:
Solution
Successful Crossing
Considering the difference between visionaries and pragmatists
the former is willing to bet on the come the latter want to see the solutions in production (i.e. see the whole product before they by it)
Many high-tech companies are not willing to commit to develop any whole product
they focus on four to five likely candidate segments risk for having everything for nobody
Putting all eggs in one basket is the only safe way to cross the chasm - Why? (Focus & Globalisation)
Market Development Model
Main Street
Tornado Total Assimilation
Early Market Chasm
Bowling Alley
Mainstream Market
Source: Moore (1998)
Beyond the Chasm - Assessing Mass Market
The Bowling Alley
a period of niche-based adoption in advance of the general marketplace, driven by compelling customer needs and the willingness of vendors to craft nichespecific whole products a period of mass-market adoption, when the general marketplace switches over to the new infrastructure paradigm a period of aftermarket development, when the base infrastructure has been deployed and the goal now is to flesh out its potential wholly new paradigms (technology) come to market
The Tornado
Main Street
End of Life
Technology vs. Category Life Cycles
Market share is captured here
Market share is converted into served installed base here
Product Category Life Cycle
(Ongoing sales)
Technology Adoption Life Cycle
(First time adopters)
Source: Moore (1998)
Market Platform Plan (MPP)
MPP integrates knowledge about the market and knowledge about the product and its defining technology
Core strategic vision Where are we going? How will we get there? Why will we be successful? Market platform plans Defining technology Platform architecture Product line plans Platform management
Source: McGrath (2000)
Core strategic vision
Product platform strategy Product line strategy
New product development
Mission Statements are also called
Creed statement Statement of purpose Statement of philosophy Statement of beliefs Statement of business principles A statement defining our business
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Steps to Developing Vision & Mission Statements
1. 2.
3.
4.
5.
Have managers read related articles Have managers prepare a vision and mission statement for the organization Merge the documents into one and distribute Gather feedback from managers Meet to revise the final document
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Benefits of Mission Statements
Better financial results Unanimity of purpose Resource allocation Establishment of culture Focal point for individuals Establishment of work structure Basis of assessment and control Resolution of divergent views
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Resolution of Divergent Views
A genuine decision must be based on divergent views to have a chance to be a right and effective decision Considerable disagreement over vision and mission statements can cause trouble if not resolved
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Vision & Mission Statements
Provide unity of direction Promote shared expectations Consolidate values Project a sense of worth and intent Affirm the companys commitment to responsible action
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What have we learned?
CONCLUSIONS
Current Wisdom on High-Tech Strategic Management
Interaction between marketing and R&D
Coping with the high levels of technological and market uncertainty
Marketing capabilities & business competencies
Rapid changes in technology and market settings Shortening the breakthrough-time
Product development processes
Market offering and product platform approaches
Emphasise technical support and after sales service Differentiating from competitors Analysing value systems Networks, strategic alliances, partnerships
Increasing importance of services
Building strong relationships with suppliers, channels and customers
Rely on qualitative rather than quantitative approaches for market research
What the customers really value?
What does this mean?
The High-Tech label is not once and for all, so todays hot new technologies becomes tomorrows basic technology Surprisingly, high-tech strategic management is not so different from that of low-tech as often claimed but there is a special need for more focus in hightech context because ...
Customers view is easily overlooked
To avoid developing a product which are engineer's dilemma but marketers nightmare
Knowing competitors well enough Global view of high-tech business Cross-industry effects and convergence of different technologies Focusing more and more on services determined by VISION and MISSION
Assignment
Based on what you learn today, now please analyze what is wrong with Nokia so it is collapsed? Relate it to vision and mission?