Vision, Mission

and Strategies

1
 Outline

 Vision Statement

 Mission Statement

 Strategies

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 Core Values, Vision and Mission

 Core values – fundamental beliefs and ideals of an organization.

 Vision statement – describes the long-run objective of the

company, usually for a time frame of 5 to 10 years or even longer.

 Mission statement – is like a road map of how to achieve the goals

in vision statement. It defines the purpose of the organization.

A mission statement defines what an organization is currently doing,

while vision statement is basically the ultimate goal of what the
organization would like to accomplish.

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 Framework of Vision

Consists of 2 major components: core ideology and envisioned future.

 Core ideology – expressed not in vision statement but in a set of

core values.

 Envisioned future – includes a 10 to 30 years “audacious goal” plus

vivid descriptions of what it will be like to achieve the goal.

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 Functions of Mission Statement
 To establish a sense of direction within the firm and guide the
strategic management process by providing basis for objectives
and strategies.

 To influence decisions about resource allocation.

 To help build and communicate among employees a sense of

shared purpose.

 To communicate an attractive and compelling image to external

stakeholders.

 To support the core values of the organization.

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 Components of Mission Statement

 Value creation
 Principal products and services
 Geographical area
 Philosophies
 Self-image
 Public image

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 Strategies
Performance = (Revenues – expenses) / invested assets

 3 ways to improve financial performance by using strategies:

1. Increasing revenues via one or more growth initiatives

2. Reducing expenses through greater efficiency
3. Reducing the organization’s asset

 2 modes of growth

1. External growth = inorganic growth

2. Internal growth = organic growth

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 Types of Strategies
1. Expansion Strategies
 Market penetration
 Market development
 Product development
 Diversification

2. Diversification Strategies
 Related diversification
 Unrelated diversification
3. Alliances and Integration Strategies
 Vertical integration (backward and forward)
 Horizontal integration
4. Retrenchment / Consolidation Strategies
 Cost-cutting strategies
 Divestment and liquidation

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 Expansion Strategies

Markets
Present New
Market Penetration Market Extension

Present Businesses can grow Businesses can grow by

using current products taking an existing
in current markets. product to new market
Products segments.

Product Development Diversification

New Businesses can grow by When businesses

creating new products expand beyond the
for existing or related existing scope of their
markets. core business.

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 Diversification Strategies

 Related diversification – when a business expands

its activities into product lines that are similar to those it
currently offers.

 Unrelated diversification – when a business

manufactures different products which have no relation
to each other.

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 Alliances and Integration Strategies

 Vertical integration – when firm is integrating vertically by:

 Acquiring or developing their own sources of supply
(backward integration)
 Acquiring or developing their own distributors or
resellers (forward integration)

 Horizontal integration – when firm acquires one of its

competitors.

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 Retrenchment Strategies

 Cost-cutting strategies

 Divestment (divestiture) – the firm reduces its asset

base by selling off or by divesting divisions and other
parts of the organization.

 Liquidation – dissolving the business or a portion of it,

and selling it for its tangible worth.

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 Porter’s Generic Strategies

Competitive advantage??

 Cost leadership strategy – rests on the organizations ability

to be more efficient than competitors and serve customers
at a lower-per unit cost.

 Differentiation strategy – pursues competitive advantage in

a different way, by producing products and services
perceived to be unique in some way.

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 Porter’s Generic Strategies

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 Types of E-Business Strategies

Consumer Business

Business B2C B2B

Consumer C2C C2B

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