Vision Statements

• A statement outlining the desired position of a company in the distant future

• Example: “Where do we want to be?” “To be the leading sports brand in the world.”

Mission Statements

• A statement outlining the underlying purpose of an organization

• Example: “What is our business?” “Healthiest product provision”

Advantages for Both:

• Positive, ideal goals that direct the business in the right direction

• Parallel to business

• Customer-centric

• Sense of direction

Aims

• Long-term goals of what the organization wants to achieve

• Vague & unquantifiable

• “Provide high-quality education to all”

Objectives

• shorter-term goals that are specific and measurable

• “To achieve a 95% pass rate within two years.”

Advantages for Both:

• Provides a sense of direction & purpose

• Unifies management & workspace and motivates them

• Builds trust and goodwill

Strategies & Strategic Objectives

• Plans of action to achieve the organizational objectives

• Long-term goals of a business

  • Profit maximization

  • Growth

  • Market standing

  • Image & Reputation

Tactics & Tactical Objectives

• Actions taken to achieve the short-term objectives

• Short-term goals that affect a section of the organization

• Tend to refer to targets set up for up to 12 months:

  • survival

  • sales revenue maximization

The Need for Changing Objectives

Internal Factors

1. Corporate Culture - should be a flexible and adaptable organizational culture

2. Type & Size of Organization - various stakeholder objectives need to be considered

3. Private vs. Public Sector - Private focus on profit maximization and public focus on providing a service

4. Age of Business - newer businesses focus on breaking even and survival and established ones focus on growth and higher market share

5. Finance - determine the scale of a firm’s objectives

6. Risk Profile - managers who have a high ability to take risks to create more ambitious objectives

7. Crisis Management - face internal crisis

External Factors

1. State of the Economy - growth or recession

2. Government Constraints - government rules & regulations limit what a business can do

3. Pressure Groups - can force a business to review its approach to ethics

4. New Technologies - create new business opportunities

Ethical Objectives

• Ethics - moral values and principles that guide the decision-making process

• Corporate Social Responsibility [CSR]

  • organizations consider the interests of society and take responsibility for the impact of their activities on other stakeholders

• Ethics have an evolving nature

• What is considered ‘right’ and ‘wrong’ is mainly dependent on public opinion which changes over time

  • Forces firms to review their CSR frequently

• Media pressure in countries means that large multinationals must donate part of their profit to charity

SWOT Analysis

Internal Factors

1. STRENGTH - Internal advantages that can develop a competitive advantage against competitors

   1. strong brand loyalty

   2. skilled workers

2. WEAKNESSES - Negative internal factors that are unfavorable compared to rivals

   1. unskilled workplace

   2. obsolete equipment

External Factors

1. OPPORTUNITIES - External possibilities for future development and potential areas for expansion and rising future profits

   1. China has a large customer base. Opportunity for other firms

2. THREATS - External factors that hinder prospects for an organization. They cause problems for the business

   1. Changes in fashion

   2. Oil crisis

   3. Infectious diseases

Ansoff Matric

• Analytical tool that helps managers choose and devise growth strategies for products and markets

Market Penetration

• low risk

• Existing products in an existing market

• Price adjustments, increases promotion, and minor product improvements

• Aims to increase market share

Product Development

• medium risk

• New products in an existing market

• Innovation to replace products

• Brand extension and larger product portfolio

• Customers may not like the new product

Market Development

• medium risk

• Existing products in a new market

Diversification

• high risk

• New product in a new market

• Related Diversification = same industry

  • Coca-Cola buying Bureau healthy drinks

• Unrelated Diversification = different industry

  • Coca-Cola making merchandise