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1200 Words total, 3 APA references and reference list, NO PLAGIARISM PLEASE!!!1.Explain the difference between a mission and a vision statement.2.What are the fundamentals of planning? How do strategic and tactical planning differ? 3. Research the vision statement from either Hilton, Amazon, or Patagonia. Analyze the vision statement and discuss if the vision statement meets the criteria for the long-term goal describing what the organization wants to become. 4. Perform an analysis of your place of employment and provide your company’s mission and vision statements. Analyze the statements and evaluate whether the statements meet the criteria for mission and vision. Provide recommendations as necessary. Describe how your place of employment produces work to meet the mission and the vision of the organization. If you are currently not employed, research another organization’s mission and vision statements.(FOR QUESTION 4 PICK WHATEVER ORGANIZATION THAT YOU WANT)THIS QUESTION IS SEPARATE FROM THE TOP AND IT SHOULD HAVE 250 WORDS TOTAL. 2 APA REFERENCES AND REFERENCE LIST. NO PLAGIARISM PLEASE!!!5 .A part of the strategic planning process is gaining competitive intelligence as it pertains to the environment your organization is a part of. Who are three of your organization’s primary competitors and what does your company do to gain competitive advantage in your field.(BASED ON WHATEVER ORGANIZATION YOU PICK FOR QUESTION 4 YOU CAN USE THAT ORGANIZATION TO ANSWER QUESTION 5)
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Strategic Management
How Exceptional Managers Realize
a Grand Design
V
Major Questions You
I Should Be Able to Answer
C
6.1 What Is Effective Strategy?
K
Major Question: What is strategic positioning, and what are the
E that underlie it?
three principles
R
6.2 The Strategic-Management Process
S
Major Question: What’s the five-step recipe for the strategicmanagement ,process?
6.3
Establishing the Mission & the Vision
T
Major Question: What are the characteristics of good mission
E
and vision statements?
6.4
Assessing the Current Reality
R
Major Question: What tools can help me describe where the
D from a competitive point of view?
organization stands
6.5
Formulating the Grand Strategy
A
Major Question: How can three techniques—Porter’s four
competitive strategies, diversification and synergy, and the
BCG matrix—help
1 me formulate strategy?
6.6
A
R
1 & Controlling Strategy: Execution
Implementing
9 How does effective execution help managers
Major Question:
during the strategic-management
process?
1
T
S
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the manager’s toolbox
Being a Successful Manager: Look beyond the Fads,
Be Willing to Make Painful Decisions
“How can we build organizations that are as nimble
as change itself—not only operationally, but strategically?” asks management professor Gary Hamel.1
Many people deal with uncertainty by succumbing
to fads, or short-lived enthusiasms, suggests the
author of a book on why smart people fall for fads.2 A
fad, he says, “is seen as the way of the future, a genuine innovation that will help solve a big problem. . . . V
A lot of the attraction of a fad is that if you embrace it
I
early, then you feel that you’re ahead of other people,
3
that you’re hipper and maybe smarter than they are.” C
Fads are evident in the stream of business books
K
touting the newest cure-all. Still, some ideas that started
E
out as management fads survive. Why? Because
they’ve been found to actually work. One of these is
R
strategic planning, as we describe in this chapter.
S
Two lessons of successful managers:
Lesson 1—In an Era of Management Fads,
Strategic Planning Is Still Tops
,
also continued to be popular, also favored by about
80%.4 Strategic planning is concerned with developing a comprehensive program for long-term success.
Mission statements describe the organization’s
purpose and vision statements describe its intended
long-term goal. Successful managers know how
to use all of them.
Lesson 2—Managers Must Be Willing to Make
Painful Decisions to Suddenly Alter Strategy
Another lesson is that in a world of discontinuous
change, managers must always be prepared to make
large, painful decisions and radically alter their business design—“exiting businesses, firing people, admitting you were wrong (or at least not omniscient),”
as writer Geoffrey Colvin puts it. “So the future will
demand ever more people with the golden trait, the
fortitude to accept and even seek psychic pain.”5
For Discussion Earlier we described the impor-
Business consultant Bain & Company annually con- T
ducts a survey on the most popular management
tools. The 2013 survey found that the most widely E
used management tool in 2012 was used 12 or even A
14 years earlier—namely, strategic planning, thought
to be effective by about 80% of the senior managers R
surveyed. The use of mission and vision statements D
tance of practicing evidence-based management,
with managers “seeing the truth as a moving target,
always facing the hard facts, avoiding falling prey to
half-truths, and being willing to admit when they’re
wrong and change their ways.”6 Do you think you
would have this mind-set when thinking about the
overall direction of your organization or work unit?
R
A
1
1
What’s Ahead
in This Chapter
9
1
T
We begin by discussing strategic positioning
and the five steps in the strategicS
management process. We then describe competitive
intelligence, SWOT analysis, fore-
fore
ecasst
casting, benchmarking, and Porter’s model for industry analysis. We next consider
Porter’s four competitive strategies, single-product versus diversification strategies,
and the BCG matrix. Finally, we discuss execution.
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PART 3
6.1
MAJOR
QUESTION
?
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Planning
What Is Effective Strategy?
What is strategic positioning, and what are the three principles underlying it?
THE BIG PICTURE
Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. It is based on the principles that strategy is the creation of a unique and valuable
position, requires trade-offs in competing, and involves creating a “fit” among activities.
Harvard Business School professor Michael Porter “is the single most
V
important strategist working today, and maybe of all time,” raved Kevin
I firm McKinsey & Co.7 He is “the most famous and
Coyne of consulting
influential business
Cprofessor who has ever lived,” says Fortune writer
Geoffrey Colvin. “He is widely and rightly regarded as the all-time
K 8
greatest strategy guru.”
Is this high praise
E deserved? Certainly Porter’s status as a leading
authority on competitive strategy is unchallenged. The Strategic Management Society, R
for instance, voted Porter the most influential living
strategist. We referSto him repeatedly in this chapter.
,
Strategic Positioning & Its Principles
Strategy guru. Harvard
Business School professor
Michael Porter suggests that
every company is subject to five
forces: its current competitors,
possible new competitors, the
threat of substitutes for its
products or services, the
bargaining power of its suppliers,
and the bargaining power of its
customers. Operating within that
five-forces framework, a
company must choose the right
strategy—or be beaten by
competitors. Do you think there
are other forces that are equally
important in forming strategy?
According to Porter,
T strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about
E “performing different activities from rivals, or
a company. “It means,” he says,
performing similar activities in different
ways.”9
A
Three key principles underlie strategic positioning:10
R
D
1. Strategy Is the Creation of a Unique & Valuable Position Strategic
R
position emerges from three sources:
A Strategic position can be derived from serving

Few needs, many customers.


the few needs of many customers. Example: Jiffy Lube provides only lubricants, but it provides them to all kinds of people with all kinds of motor
1
vehicles.
Broad needs, few customers.
A strategic position may be based on serving
1
the broad needs of just a few customers. Example: Wealth management and
9
investment advisory firm Bessemer Trust focuses exclusively on high–net
1
worth clients.
Broad needs, many customers.
Strategy may be oriented toward serving the
T
broad needs of many customers. Example: National movie theater operator
S only in cities with populations of fewer than
Carmike Cinemas operates
200,000 people.
2. Strategy Requires Trade-offs in Competing
As a glance at the preceding
choices shows, some strategies are incompatible. Thus, a company has to choose not
only what strategy to follow but what strategy not to follow. Example: Neutrogena
soap, points out Porter, is positioned more as a medicinal product than as a cleansing
agent. In achieving this narrow positioning, the company gives up sales based on deodorizing, gives up large volume, and accordingly gives up some manufacturing
efficiencies.
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Strategic Management
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3. Strategy Involves Creating a “Fit” among Activities “Fit” has to do with
the ways a company’s activities interact and reinforce one another. Example: A mutual
fund such as Vanguard Group follows a low-cost strategy and aligns all its activities
accordingly, distributing funds directly to consumers and minimizing portfolio turnover. However, when the short-lived (1993–1995) Continental Lite airline tried to
match some but not all of Southwest Airlines’ activities, it was not successful because
it didn’t apply Southwest’s entire interlocking system.
Does Strategic Management Work for Small
as Well as Large Firms?
You would expect that a large organization, with its thousands of employees and even
V
larger realm of “stakeholders,” would benefit from strategic
management and planning. After all, how can a huge company such as Bank
of
America
run without some
I
sort of grand design?
C
But what about smaller companies (under 500 employees), which account for
about half of private-sector employment and two-thirds
K of net new jobs in recent
years?11 One analysis of several studies found that strategic planning was appropriate
E
not just for large firms—indeed, companies with fewer than 100 employees could
benefit as well, although the improvement in financialR
performance was small. Nevertheless, the researchers concluded, “it may be that the
Ssmall improvement in performance is not worth the effort involved in strategic planning unless a firm is in a very
,
competitive industry where small differences in performance
may affect the firm’s
survival potential.”12 ●
T
E
A
RConsumer a Captive”
EXAMPLE
Comparing Strategies: Big-Company “Make the
versus Small-Firm “Offer Personal Connections”
D
R Small-Company Ways. “I don’t feel they behave in a way that I
Big companies—especially big-tech companies such as Amazon,
Google, or Apple—“are no longer content simply to enhance
A want to support with my consumer dollars,” says Chicago profes16
part of your life,” says one report. “The new strategy is to build
a device, sell it to consumers, and then sell them the content to
play on it. And maybe some ads too.”13
1
1
Big-Company Ways. That is, the idea is to get consumers tied
not just to a brand or device or platform but to make them captive
9
of the company’s ecosystem—and to get them connected “as
1
tightly as possible so they and their content are locked into one
system,” says analyst Michael Gartenberg.14 Thus, Amazon, for
T
example, sells the Kindle e-book readers at a low price so that it
S
can then sell e-books. “Amazon is in a race to embed itself into
the fabric of world-wide commerce in a way that would make it
indispensable to everyone’s shopping habits,” says one columnist, “and to do so before its rivals wise up.”15 Similarly, Apple
enables users to easily create book content on its iBook Authors
book-creation tool, but authors will only be able to sell the results
through Apple. Google attempted to promote its Google Nexus
smartphone as a platform for selling Google Wallet, a cell-phone
payment system.
sor Harold Pollack about big Internet retailers like Amazon. So
instead, Pollack started buying from small online retailers. Their
prices are often higher, but he says he now has a clear conscience.
Whereas the strategy of big e-commerce companies is to try
to tightly connect consumers with discounted prices, free shipping, and easy-to-use apps, the strategy of small retailers—like
Hello Hello Books in Maine—is to discourage price comparisons
(as in creating “buy it where you try it” campaigns or refusing to
carry popular items carried by big retailers), offer freebies, and
attempt to establish a personal or emotional connection with
customers. They also try to exploit the sympathies of shoppers to
“support the little guy,” as Pollack is doing.
YOUR CALL
Considering the proliferation of price comparison sites (Pricegrabber.com, Bizrate.com, FreePriceAlerts.com) that will usually direct consumers to big e-commerce retailers, do you think
low prices will always win in the end? Is there any strategy a
small retailer can take to maintain an advantage?17
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6.2
MAJOR
QUESTION
?
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Planning
The Strategic-Management Process
What’s the five-step recipe for the strategic-management process?
THE BIG PICTURE
The strategic-management process has five steps: Establish the mission and the vision. Assess the current
reality. Formulate the grand strategy. Implement the strategy. Maintain strategic control. All the steps may be
affected by feedback that enables the taking of constructive action.
When is a good time to begin the strategic-management process? Often it’s touched off
by some crisis.
V
Back before General Motors recalled 25.69 million vehicles (in the first six months
I
of 2014 alone) with defective ignition
switches, Toyota went through its own recall
crisis. In 2009 and 2010 the Japanese
automaker
encountered severe quality problems
C
involving what seemed to be uncontrollable acceleration in its automobiles. Toyota
Motor’s President Akio Toyoda K
concluded that these problems were partly due to the
company’s “excessive focus on market
share and profits,” requiring that the company
E
reorient its strategy toward quality and innovation.18 For Edward Lampert, who in
R megaretailer Sears Holdings, the pressure was felt
2005 merged Kmart and Sears into
in years of underperforming returns
S despite cost cutting and store closures.19
,
EXAMPLE
T
Crisis Leading to the Strategic-Management Process:
E
Starbucks Reclaims Its Soul
A
Among the many things that Starbucks has going for it is this:
it survived a near-death experience.20
Today’s CEO, Howard Schultz, joined the Seattle-based
company as marketing director in 1982, when it was only a
small chain selling coffee equipment. Over nearly two decades,
he gained control and, inspired by the coffee houses of Europe,
transformed the company into a comfortable “third place” between home and work, a place with a neighborhood feel selling
fresh-brewed by-the-cup lattes and cappuccinos. By 2000,
Starbucks (named for the first mate of the whaling ship in Herman Melville’s Moby Dick) had become the world’s largest specialty coffee retailer, with 3,501 stores, 78% of them in the
United States.21
“Starbucks became, for many of us, what we talk about
when we talk about coffee,” wrote one reporter. “It changed
how we drink it (on a sofa, with Wi-Fi, or on the subway), how
we order it (‘for here, grande, two-pump vanilla, skinny extra
hot latte’), and what we are willing to pay for it,” such as $4.99
for a Frappuccino.”22
Schultz Steps Down. Schultz stepped down as CEO in 2000 (remaining as chairman), and for a while the business continued to
thrive. Then two things happened that provoked a crisis. First, the
company “lost a certain soul,” says Schultz, as the management
became more concerned with profits than store atmosphere and
company values and extended existing product lines rather than
R
creating new ones. Second, as the Great Recession took hold in
2007,
D tight-fisted consumers abandoned specialty coffees, causing the stock price to nosedive. In January 2008, after an eightR
year absence, Schultz returned as CEO.
A
The Reinvention Begins. “I didn’t come back to save the
company—I hate that description,” Schultz told an interviewer. “I
1 back to rekindle the emotion that built it.”23
came
1Among the risks he took to restore the company’s luster, he
closed 800 U.S. stores, laid off 4,000 employees, and let go
9 top executives. As a morale booster, he flew 10,000 store
most
managers
to New Orleans, recently destroyed by Hurricane
1
Katrina. Along with attending strategy sessions, they bonded in
T
community-service
activities, contributing thousands of volunteer
hours
to
helping
to restore parts of the city. “We wanted to
S
give back to that community post-Katrina,” says Schultz, “and
remind and rekindle the organization with the values and guiding principles of our company before we did a stitch of business.” Later he closed all U.S. stores for half a day so baristas
could be retrained in how to make espresso.
The Payoff. After a couple of years, the company turned
around, the result of better operations, modernized technology, a
reinvigorated staff, and innovations such as Via premium instant
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chain; enabled customers to pay for coffee via a mobile-payment
app; and even launched alcohol sales.)24 In mid-2014, it was
serving more than 70 million customers face to face, in 20,200
stores in 64 countries, and its stock price was nine times what it
had been in 2008.25
Schultz feels strongly that “there’s an opportunity for
businesses to demonstrate a role in society that’s beyond
profitability,” providing health insurance even for temps, creating tuition reimbursement, helping to raise loans for small
businesses.
V
Starbucks in China. This coffee cafe is located in Chengdu in Sichuan I
province.
C
K
coffee. (Since then it has acquired its own Costa Rican farm to
E
develop proprietary coffee varieties; teamed with Oprah Winfrey
to introduce Oprah Chai tea; acquired the La Boulange bakery
R
S
,
YOUR CALL
Some critics feel Starbucks is the symbol of “affordable luxury.” If we can’t afford a McMansion or a Lexus, says one observer, we may be “willing to make that $5 splurge at Starbucks
simply because it makes us feel a bit better about ourselves.”26
Thus, despite the innovation in products, attempts to rekindle
the cozy neighborhood café, and emphasis on positive social
values, do you think another economic downturn could alter
Starbucks’s fortunes?
The Five Steps of the Strategic-Management Process
The strategic-management process has five steps, plusTa feedback loop, as shown below. (See Figure 6.1.) Let’s consider these five steps. E
FIGURE 6.1
A
R
D
3. Formulate
R the
grand strategy
A
The strategic-management process
The process has five steps.
1. Establish
the mission
and the vision
2. Assess
the current
reality
4. Implement
the strategy
1
1
9
1 if necessary, based on feedback
Feedback: Revise actions,
T
Step 1: Establish the Mission & the Vision We
S discussed mission and vision
in Chapter 5 and explain them further in the next section. The mission, you’ll recall, is
the organization’s purpose or reason for being, and it is expressed in a mission statement. An organization’s vision is its long-term goal describing what it wants to become, and it is expressed in a vision statement, which describes its long-term direction
and strategic intent.
Step 2: Assess the Current Reality
The second step is to do a current reality
assessment, or organizational assessment—to look at where the organization stands
and see what is working and what could be different so as to maximize efficiency and
effectiveness in achieving the organization’s mission.27 Among the tools for assessing
5. Maintain
strategic
control
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Planning
the current reality are SWOT analysis, forecasting, benchmarking, and Porter’s model
for industry analysis, all of which we discuss in Section 6.4.
Step 3: Formulate the Grand Strategy
The next step is to translate the broad
mission and vision statements into a grand strategy, which, after the assessment of the
current reality, explains how the organization’s mission is to be accomplished. Th …
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