Components of a Strategy Statement
The strategy statement of a firm sets the firms long-term strategic direction and broad policy directions. It gives the firm a clear sense of direction and a blueprint for the firms activities for the upcoming years. The main constituents of a strategic statement are as follows:
An organizations strategic intent is the purpose that it exists and why it will continue to exist, providing it maintains a competitive advantage. Strategic intent gives a picture about what an organization must get into immediately in order to achieve the companys vision. It motivates the people. It clarifies the vision of the vision of the company.
Strategic intent helps management to emphasize and concentrate on the priorities. Strategic intent is, nothing but, the influencing of an organizations resource potential and core competencies to achieve what at first may seem to be unachievable goals in the competitive environment. A well expressed strategic intent should guide/steer the development of strategic intent or the setting of goals and objectives that require that all of organizations competencies be controlled to maximum value.
Strategic intent includes directing organizations attention on the need of winning; inspiring people by telling them that the targets are valuable; encouraging individual and team participation as well as contribution; and utilizing intent to direct allocation of resources.
Strategic intent differs from strategic fit in a way that while strategic fit deals with harmonizing available resources and potentials to the external environment, strategic intent emphasizes on building new resources and potentials so as to create and exploit future opportunities.
Mission statement is the statement of the role by which an organization intends to serve its stakeholders. It describes why an organization is operating and thus provides a framework within which strategies are formulated. It describes what the organization does (i.e., present capabilities), who all it serves (i.e., stakeholders) and what makes an organization unique (i.e., reason for existence).
A mission statement differentiates an organization from others by explaining its broad scope of activities, its products, and technologies it uses to achieve its goals and objectives. It talks about an organizations present (i.e., about where we are). For instance, Microsofts mission is to help people and businesses throughout the world to realize their full potential. Wal-Marts mission is To give ordinary folk the chance to buy the same thing as rich people. Mission statements always exist at top level of an organization, but may also be made for various organizational levels. Chief executive plays a significant role in formulation of mission statement. Once the mission statement is formulated, it serves the organization in long run, but it may become ambiguous with organizational growth and innovations.
In todays dynamic and competitive environment, mission may need to be redefined. However, care must be taken that the redefined mission statement should have original fundamentals/components. Mission statement has three main components-a statement of mission or vision of the company, a statement of the core values that shape the acts and behaviour of the employees, and a statement of the goals and objectives.
Features of a Mission
- Mission must be feasible and attainable. It should be possible to achieve it.
- Mission should be clear enough so that any action can be taken.
- It should be inspiring for the management, staff and society at large.
- It should be precise enough, i.e., it should be neither too broad nor too narrow.
- It should be unique and distinctive to leave an impact in everyones mind.
- It should be analytical,i.e., it should analyze the key components of the strategy.
- It should be credible, i.e., all stakeholders should be able to believe it.
A vision statement identifies where the organization wants or intends to be in future or where it should be to best meet the needs of the stakeholders. It describes dreams and aspirations for future. For instance, Microsofts vision is to empower people through great software, any time, any place, or any device. Wal-Marts vision is to become worldwide leader in retailing.
A vision is the potential to view things ahead of themselves. It answers the question where we want to be. It gives us a reminder about what we attempt to develop. A vision statement is for the organization and its members, unlike the mission statement which is for the customers/clients. It contributes in effective decision making as well as effective business planning. It incorporates a shared understanding about the nature and aim of the organization and utilizes this understanding to direct and guide the organization towards a better purpose. It describes that on achieving the mission, how the organizational future would appear to be.
An effective vision statement must have following features-
- It must be unambiguous.
- It must be clear.
- It must harmonize with organizations culture and values.
- The dreams and aspirations must be rational/realistic.
- Vision statements should be shorter so that they are easier to memorize.
In order to realize the vision, it must be deeply instilled in the organization, being owned and shared by everyone involved in the organization.
Goals and Objectives
A goal is a desired future state or objective that an organization tries to achieve. Goals specify in particular what must be done if an organization is to attain mission or vision. Goals make mission more prominent and concrete. They co-ordinate and integrate various functional and departmental areas in an organization. Well made goals have following features-
- These are precise and measurable.
- These look after critical and significant issues.
- These are realistic and challenging.
- These must be achieved within a specific time frame.
- These include both financial as well as non-financial components.
Objectives are defined as goals that organization wants to achieve over a period of time. These are the foundation of planning. Policies are developed in an organization so as to achieve these objectives. Formulation of objectives is the task of top level management. Effective objectives have following features-
- These are not single for an organization, but multiple.
- Objectives should be both short-term as well as long-term.
- Objectives must respond and react to changes in environment, i.e., they must be flexible.
- These must be feasible, realistic and operational.
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- Strategic Management - Introduction
- Strategy - Definition and Features
- Components of a Strategy Statement
- Vision & Mission Statements
- Strategic Management Process
- Environmental Scanning
- Strategy Formulation
- Strategy Implementation
- Strategy Formulation vs Implementation
- Strategy Evaluation
- Strategic Decisions
- Benefits of Strategic Management
- Business Policy
- BCG Matrix
- SWOT Analysis
- SWOT Analysis of Google
- SWOT Analysis of Starbucks
- SWOT Analysis of Blackberry
- Personal SWOT Analysis
- SWOT Analysis of Amazon
- SWOT Analysis of IKEA
- SWOT Analysis of Nike
- SWOT Analysis of Microsoft
- SWOT Analysis of China Mobile
- Competitor Analysis
- What is Competitive Advantage ?
- Human, Social, and Intellectual Capital as a Means of Competitive Advantage
- Porters Five Forces Model
- Blue Ocean Strategy and its Implications for Businesses
- Overfished Ocean Strategy: How to Drive Growth and Attain Profitability
- Porters Five Forces Analysis of the Airlines Industry in the United States
- Porters Five Forces Analysis of Samsung
- Porters Five Forces Analysis of Virgin Atlantic
- Porters Five Forces Analysis of China Mobile
- Strategic Leadership
- Some Pitfalls to be Avoided
- Corporate Governance
- Business Ethics
- Social Responsibilities of Managers
- Core Competencies
- Core Competency Theory of Strategy
- Ansoff Matrix
- Routes to Strategic Growth
- Diversification as a Viable Corporate Strategy
- 5 Configurations of Strategic Management
- Role of Planning, Plans and Planners
- Reasons for Avoiding Strategic Planning
- Strategic Management for the Millennials
- Strategizing for the Future
- PESTLE Analysis of the Global Aviation Industry
- PESTLE Analysis of Starbucks
- PESTLE Analysis of Samsung
- SWOT Analysis of Unilever
- Business Strategies to Beat the Downturn