7 analysing the strategic position of a business

Question 1

aim vs mission

Answer 1

aims are a generalised statement of where the business is heading, missions are this expressed in a particulaly inspiring way.

eg. apple’s belief in their superior technology + hostility to competitor microsoft. unity led to the success of the ipod

mcdonalds = aim to provide a ‘friendly service in a relaxed, safe and consistent restaurant environment’ - successful as each chain reproduces the same atmosphere with different staff/locations

tesco = ‘to diversify away from dependence on britain’ - failed £2B wasted on american chain and lost focus on the british consumer

Question 2

mission statement

Answer 2

qualitative description of the business’ intent, to share with stakeholders (employees, shareholders, pressure groups)

eg. coke = refresh the world, make a difference. (sustainable future + refreshing body and spirit)

google = to organise the world’s information and make it universally available (using tech to enrich peoples lives)

nike = to bring inspiration and innovation to every athlete in the world (if you have a body you’re an athlete)

amazon = to be the earths most customer centric company (rather than competitor focus, passion for invention, commitment to operational excellence and long term thinking

Question 3

influences on a business mission

Answer 3

purpose - why the business exists
values - what the company believes in eg. ethics and sustainability is valued by pret (recycled packaging, suppliers that treat staff well), not apple (cheap labour china scandal).
standards and behaviour - employee behaviour eg. polly’s case of sexism at a bank in the city of london
strategy - medium-long term plans adopted by the business t make the aims and missions achievable

Question 5

evaluation mission statement

Answer 5

+ unites staff (clear purpose to work towards), inspires customers (eg m and s), and shareholders
+ start-ups can gain customer loyalty and following though word of mouth
- just words, needs aims/objectives to back up the ‘fluff’
- mismatch between strategy that gets done and mission

Question 6

corporate objectives

Answer 6

medium to long-term overall targets of the business. an operationalised version of the mission statement (something quantifiable)

however, can be affected by CEGL(EI)STE eg. 2009 financial crisis made coop bank change objectives from being the most ethical bank to profit/revenue based

Question 7

functional objectives

Answer 7

objectives for each specific department eg, HR, finance, marketing, operations

need to be SMART

eg. a rise in operating profit margins from 6.5% to 7.5% within 3 years

specific, measurable, achievable, realistic, time bound

Question 8

evaluate objectives

Answer 8

+ measures success eg. marketing objectives are too narrow to be put in corporate
+ coordination between functional and corporate/mission statement (focus and direction)
- disappointing if not achieved which ruins morale
- may add unnecessary pressure, and motivation may decrease
- unhealthy addiction to success for employees and cause them to neglect other tasks