1.

3 ORGANIZATIONAL OBJECTIVES
VISION AND MISSION
STATEMENT
Successful businesses have:
• Clear identity
• Shared values
• Sense of purpose
And all the stakeholders identify with them.

In order to identify, communicate and reinforce the values,

business produce:
1. VISION: It's the first step in planning, we have to look to
where the company wants to go. It's the long term aims
and highest aspirations of a business. They are very
general and allow almost everyone to feel connected to
it.

1. MISSION: Is the aim of accomplishing the objectives of

the company. It is based in accomplishing objectives in
order to achieve the mission, an intermediate step on the
way to the vision.
VISION AND MISSION STATEMENT MAIN ROLE

1. VISION:
• Guide strategic decisions
• Gives the company a direction

1. MISSION: You must take into account the day to day, the environment, the
market and the product / service to which the company is dedicated. It is
important to remember that a mission does not project into the future.
• Guide the organization internally
• It is designed both to guide the leadership teams and the shareholders of the
company
• The product / service and the image of the company must be taken into account.
EXAMPLE WALMART
VISION: ‘’BE THE Nº 1 RETAILER’’
MISSION: ‘’HELP TO SAVE MONEY SO PEOPLE CAN LIVE
BETTER’’ → This says a lot about the business, and what
makes them different, their strategies.. They have a cost
leadership strategy.

MISSION VISION

AIMS

OBJECTIVES
IN ORDER TO BUILD OUR VISION AND MISSION WE CAN USE
THIS CLUES
VISION MISSION

Concept What do we want? Why are we doing?

Purpose Points the future. It is what the Is based in where the business is
business would like to see itself as. now, communicates what needs to
be done in order to achieve the vision

Audiences Internal stakeholders: inspires, Internal stakeholders: provides a

aligned and motivates employees. means for accountability by defining
key performance indicators.
External stakeholders: Binds them
to the business by giving a sense of External stakeholders: measures
shared feelings how successful the business is at
achieving the vision

Change Should NEVER change May change: in world of changing

external environments, a mission
statement may need to be modified
CREATE YOUR OWN MISSION
AND VISION STATEMENT IN
GROUPS
Go to Xtend and solve the case.
DIFFERENCES BETWEEN AIMS AND OBJECTIVES

The aims of a business are their long term

goals. The vision statement is a summary of
this aims. Express aspirations that are high and
long term.
Microsoft: “A personal computer in every home running
Microsoft software”.
Toyota USA: “To be the most successful and respected
car company in America”.
The objectives are the medium to short term
goals that clarify how the business will achieve
the aims and reach the vision. The mission
summarizes this objectives.
THREE TYPES OF OBJECTIVES

• Strategic objective: sometimes referred to as a global objective.

Are the medium to long term objectives, set by senior managers
to guide the company.
• Tactical objective: medium to short term objectives set by middle
managers to achieve the strategic objectives.
• Operational objectives: are the day-to-day objectives set by floor
managers. So that the company can reach their tactical objectives.
AIMS, OBJECTIVES: HIERARCHY OF
OBJECTIVES

2. Strategic objectives:
long-term goals, guide the
1. Vision (summary of
company in the right
aims). Entrepeneurs or
direction.
CEO
Senior managers

3. Tactical objectives: 4. Operational

medium or short term objectives: day to day
goals in order to achieve goals to achieve tactical
strategic objectives objectives.
Floor managers or even
Middle managers workers
AIMS, OBJECTIVES: HIERARCHY OF
OBJECTIVES

1. Aim: The be the most successful car dealership in the city

2. Strategic objective: to have the highest market share of car

dealership in the city

3. Tactical objective: To hire and retain enough sales people so

that the dealership has sufficient salespeople to serve the
customers

3. Operational objective: To establish the amount of time that a

customer waits to be greeted by a salesperson to less than 2
minutes
AIMS, OBJECTIVES: S.M.A.R.T (Activity
1.3.2b)
One of the main differences between aim and objectives
is that objectives are concrete and can be translated in to
something specific and measurable.
The objectives of a business needs to be SMART:
• SPECIFIC: Relate with the nature of the
business
• MEASURABLE: Number of members, units, size
of market share...
• ACHIEVABLE
• RELEVANT: have to be actually of use
• TIME SPECIFIC: they need to have time frame

Business are effective when they transform their vision

into SMART objectives.
CREATE YOUR OWN OBJECTIVES
IN PAIRS.
Go to Xtend.
BUSINESS STRATEGY AND TACTIC

BUSINESS STRATEGY
A BUSINESS STRATEGY is a long term plan to achieve a STRATEGIC OBJECTIVE in order
to work towards the AIMS of the business. Gives the organization sense of direction
and scope to achieve competitive advantages over the long term.

BUSINESS TACTIC
And a BUSINESS TACTIC is a plan to achieve a TACTICAL OBJECTIVE in order to work
towards the BUSINESS STRATEGY.

A restaurant might have a great business strategy of offering high quality food in a
restaurant, to establish as a high quality restaurant in the market. But a poor tactic for
determining customers satisfaction (observing them), a better tactic will be to have a
more direct feedback.
THE NEED OF ORGANIZATIONS TO CHANGE
OBJECTIVES
It’s a fact that business need to change objectives.
This is because a change in:
- Internal environment (inside the company)
- External environment (outside company)
CHANGES IN THE INTERNAL ENVIRONMENT

1. Leadership: change of leadership often can lead to a change in

aims and objectives.
2. HR: Conditions related to HR can change and can alter objectives
all down the hierarchy.
3. Organization: For example, merger or acquisitions.
4. Product: products are sold in a marketplace. The performance of
selling the products in the marketplace may require changes in
either the product.
5. Finance: when the circumstances of finance change,
organizations have to modify their strategies.
6. Operation: business are innovating constantly.
 Business has limited or
no control over external
environment. This are
the STEEPLE factors:

Ecological Social

The need of
organization
Legal to change
STEEPLE FACTORS Technological
objectives

Political Economic

Ethical
 Social : changes in
society or culture, such
as demographic changes
or cultural changes.

Ecological growing
Technological: today is
environmental
an era of rapid
awareness and the green
technological change,
revolution have had
which can change the
significant effect on many
environment.
businesses

Legal: when Economic: changes in

responsibility of the market conditions,
legislation changes from such as the presence of
one party to the other, or competitors, global
one coalition to another. finance crisis.

Political: change the Ethical: the values of

political system very society change. They
often forces business to force businesses to
change its approach. change its practices.
STEEPLE ANALYSIS EXERCISE

Worked example (Choose four of the STEEPLE factors): STEEPLE

analysis of multinational companies operating in….

1. Greece
2. Australia
3. Mexico
4. EEUU
5. China
6. Canadá
ACTIVITY 1.3.4B PEUGEOT CITROENS ROAD
AHEAD LAID OUT
ETHICS: Why ethical objectives are
necessary?
ETHICAL OBJECTIVES

Why business set themselves ethical objectives:

• Building up customer loyalty

• Creating a positive image
• Developing a positive work environment
• Reducing the risk of legal redress
• Satisfying customers ever-higher expectations for ethical behavior

The impact of the objectives

• The business itself: short term costs and employees ́resistance to change
• Competitors may have to respond to maintain their market position
• Suppliers: rejected suppliers may have to respond to protect their orders
• Customers: brand loyalty
• The local community
• Goverments foster and welcome ethical businesses due to
• pressure from voters and stakeholders
DIFFERENCE BETWEEN ETHICAL OBJECTIVES
AND CORPORATE SOCIAL RESPONSIBILITY

• CSR (Corporate Social Responsibility) is the obligation for a

business to operate in a way that will have a positive impact on
society. A firm's CSR policy includes assessing its actions and then
possibly setting.
• Ethical objectives: specific goals set by businesses based on
established codes of behaviour

OPEN QUESTION: Do you think CSR (Corporate Social Responsibility)

is an obligation and interest or moral duty too?
Corporate Social Responsibility

A company Goes beyond Since the 1980 If you want to

committed to obeying the law the movement operate in
CSR tries to be a helps build a towards the CSR different countries
good corporate sustainable has grown and demands
citizen business model led to dramatic awareness of
changes in the differences in
business. Why do ethical concerns:
you think this e.g.
happened? environmental
concerns →
THEORY OF KNOWLEDGE:
ETHICAL DILEMAS.
 ACTIVITY 1.3.4 WALMART CSR

Walmart is the world’s largest retailer and largest private sector

employer in the USA. The company has, on numerous occasions, been
fined millions of dollars by the US government for violating air and
water pollution legislation, This obviously harmed the image of the
global retailer, with the media alleging that 8% of customers had
stopped shopping at Walmart as a result of its neglect of the
environment.
Labour unions have criticised Walmart’s unethical business practices
which have caused staff turnover rates around the 70% in some stores.
Walmart has also been taken to court for not paying employees the
overtime, forcing them to work without proper rest breaks and
discriminating against female workers for pay and promotion.
 ACTIVITY 1.3.4 WALMART CSR

a. State two possible barriers to socially responsible business

behaviour
b. Discuss whether it is morally correct for the business such as
Walmart to put profits before the environment and the welfare of
their employees.
 SWOT ANALYSIS

SWOT analysis is meant to be the

first stage in the planning process.
Helps managers to brainstorm
what they perceive as:
- STRENGTHS (INTERNAL)
- WEAKNESSES (INTERNAL)
- OPPORTUNITIES (EXTERNAL)
- THREATS (EXTERNAL)
 Strengths and opportunities:
GROWTH STRATEGIES

Weaknesses and
opportunities: RE-
SWOT ORIENTATION
ANALYSIS STRATEGIES

AND MARKET
POSITION Strengths and threats:
DEFUSING STRATEGIES

Weaknesses and threats:

DEFENSIVE STRATEGIES
 SWOT ANALYSIS AND MARKET POSITION
1. Growth strategies: best achieved by combining the strengths of a
business with the market opportunities. It produces the best
short-term strategy available. Use your internal strengths to take
advantage of opportunities.
2. Defensive strategies: are adopted when a business is at its most
vulnerable. When threats and weaknesses exists in combination
the business needs to act defensively. The most ‘negative’ short-
term strategy. Use your strengths to minimize threats.
3. Re-orientation strategies: are adopted when a business focused
on addressing its weaknesses in order to use them for the
opportunities available in the market. Improve weaknesses by
taking advantage of opportunities.
4. Defusing strategies: Are designed to eliminate threats in the
market by focusing on the strengths of a business. Work to
eliminate weaknesses to avoid threats.
SWOT ANALYSIS AND MARKET POSITION
SWOT ANALYSIS AND MARKET POSITION
ANSOFF MATRIX
ANSOFF MATRIX: MARKET PENETRATION. EXISTING
PRODUCT AND EXISTING MARKET

Market penetration: occurs when a business grows by increasing it

market share, selling more of its existing products in the same
market. Requires strong execution in pricing, promotion, and
distribution.
Market penetration is considered the safest option but opportunities
for increasing market share may be limited by the competitors in the
market.
It relies heavily on increasing Brand loyalty. For example ‘’Toy Story
1,2,3, 4….’’ Key factors to increase the chance of success are:
• The growth potential of the market.
• The strenght of customer loyalty
• The power of ability of competitors
ANSOFF MATRIX: MARKET DEVELOPMENT, NEW
MARKET - EXISTING PRODUCT

Market development: expand the market by looking for new markets

or for new market segments.

Is a riskier strategy than market penetration, as the business may not

understand the new market. For example, Starbucks was unsuccessful
when it expanded to Australia.

Key factors:
• Effective market research
• Having local knowledge on the ground
• Having an effective distribution channel
ANSOFF MATRIX: PRODUCT DEVELOPMENT. NEW
PRODUCTS – EXISTING MARKETS

Product development: is the development of new products for the

existing market. Sometimes it may be a genuinely and wholly new
product. Sometimes ‘’new products’’ are upgraded products.

Product development is riskier than market penetration, with much

depending on how loyal the customers are to the original products.

Key factors:
• Effective market research
• Having a strong research and development system
• Having first mover advantage
ANSOFF MATRIX: DIVERSIFICATION. NEW PRODUCTS –
NEW MARKET

Diversification: Is the riskier growth strategy a business can pursue.

When diversifying – introducing a new producto into a new market – a
business combines two elements of risk:
• Lack of familiarity and experience in the new market
• The untestedness of any new product
Key factors to reduce the risk of diversification:
• Effective market research
• Due diligence testing to determine:
• The attractiveness of the market
• The cost of entering the market
• Recognition of the existing business
• Possible tie – ups with other businesses with the necessary
experience.
ACTIVITY. ANSOFF MATRIX

Use the Ansoff Matrix to explain the growth strategies in the

following cases:
(a) Cadbury, the chocolate manufacturer, launches new products
under the names of Crème Eggs, Flake, Crunchie and Heroes in order
to compete with existing rivals.
(b) Nissan, a mass market car manufacturer, launches a new line of
upmarket cars under the Infiniti brand to cater for wealthier
customers.
(c) Tesco, the world's second largest retailer, expands to provide
petrol and financial services to its customers.