Strategy Formulation

How can you consistently anticipate and then plan for the next generation of customer demand? Every organization and function needs a strategic framework that serves as the context for all activities.

Strategy Implementation
While many consultants can help you formulate a strategy, KTs expertise is in formulating a strategy that is actionable and then helping you implement it successfully.

Mission Statement
The mission statement should be a clear and succinct representation of the enterprise's purpose for existence. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise, public image, the target market, products/services, the geographic domain and expectations of growth and profitability. The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. The statement can range from a very simple to a very complex set of ideas.

Mission Statements of Well Known Enterprises

The following are some examples of mission statements from real enterprises. 3M "To solve unsolved problems innovatively" Mary Kay Cosmetics "To give unlimited opportunity to women." Merck "To preserve and improve human life." Wal-Mart "To give ordinary folk the chance to buy the same thing as rich people." Walt Disney "To make people happy."

Conclusion
So, when you are preparing your Mission Statement remember to make it clear and succinct, incorporating socially meaningful and measurable criteria and consider approaching it from a grand scale. As you create your Mission Statement consider including some or all of the following concepts.

The moral/ethical position of the enterprise The desired public image The key strategic influence for the business A description of the target market A description of the products/services The geographic domain Expectations of growth and profitability Definition: A mission statement is a brief description of a company's fundamental purpose. A mission statement answers the question, "Why do we exist?" The mission statement articulates the company's purpose both for those in the organization and for the public.

The difference between a mission statement and a vision statement is that a mission statement focuses on a companys present state while a vision statement focuses on a companys future.

Every business should have a mission statement, both as a way of ensuring that everyone in the organization is "on the same page" and to serve as a baseline for effective business planning. See How to Write a Mission Satementto learn how to write one of your own.

A mission statement is a statement of the purpose of a company or organization. The mission statement should guide the actions of the organization, spell out its overall goal, provide a path, and guide decision-making. It provides "the framework or context within which the company's strategies are formulated."
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Contents:
Effective mission statements commonly clarify the organization's purpose. Commercial mission statements often include the following information:

Purpose and aim(s) of the organization The organization's primary stakeholders: clients/customers, shareholders, congregation, etc. How the organization provides value to these stakeholders, for example by offering specific types of products and/or services

According to Bart (1997), the commercial mission statement consists of 3 essential components: 1. Key market who is your target client/customer? (generalize if needed) 2. Contribution what product or service do you provide to that client? 3. Distinction what makes your product or service unique, so that the client would choose you? Examples of mission statements that clearly include the 3 essential components:

McDonalds - "To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key dcor and friendly atmosphere."
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Key Market: The fast food customer world-wide Contribution: tasty and reasonably-priced food prepared in a high-quality manner Distinction: delivered consistently (world-wide) in a low-key dcor and friendly atmosphere.

Courtyard by Marriott - "To provide economy and quality minded travelers with a premier, moderate priced lodging facility which is consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people"
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Key Market: economy and quality minded travelers Contribution: moderate priced lodging Distinction: consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people

The mission statement can be used to resolve trade-offs between different business stakeholders. Stakeholders include: managers & executives, non-management employees, shareholders, board of directors, customers, suppliers, distributors, creditors/bankers, governments (local, state, federal, etc.), labour unions, competitors, NGOs, and the community or general public. By definition, stakeholders affect or are affected by the organization's decisions and activities. According to Vern McGinis, a mission should:

Define what the company is

Limited to exclude some ventures Broad enough to allow for creative growth Distinguish the company from all others Serve as framework to evaluate current activities Stated clearly so that it is understood by all

The mission statement ultimately seeks to justify the organization's reason for existing.

Mission Statement
It is the Mission of Advance Auto Parts to provide personal vehicle owners and enthusiasts with the vehicle related products and knowledge that fulfill their wants and needs at the right price. Our friendly, knowledgeable and professional staff will help inspire, educate and problem-solve for our customers.

A company's mission statement is a constant reminder to its employees of why the company exists and what the founders envisioned when they put their fame and fortune at risk to breathe life into their dreams. Woe to the company that loses sight of its Mission Statement for it has taken the first step on the slippery slope to failure.

Sample Values

Provide high product quality Provide superior customer service Protect the quality of the environment Ensure equal access to resources Encourage innovation/creativity

Practice sustainable development It might be helpful to focus on your business's core competencies when you're considering which values are worthy of being a part of your mission statement. Once you've decided which core values are most important, add one (or two at the most) to your description of what your company does.

SWOT Analysis
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face. Business SWOT Analysis What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares. More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.

How to Use SWOT Analysis

Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful now as it was then. You can use it in two ways - as a simple icebreaker helping people get together to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool.

Tip:
Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.

To help you to carry out a SWOT Analysis, download and print off our freeworksheet, and write down answers to the following questions.

Strengths:

What advantages does your organization have? What do you do better than anyone else? What unique or lowest-cost resources can you draw upon that others can't? What do people in your market see as your strengths? What factors mean that you "get the sale"?

What is your organization's Unique Selling Proposition (USP)? Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market. You should also be realistic - it's far too easy to fall prey to "not invented here syndrome." Also, if you're having any difficulty with this, try writing down a list of your organization's characteristics. Some of these will hopefully be strengths! When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high quality products, then a high quality production process is not a strength in your organization's market, it's a necessity. Weaknesses:
What could you improve? What should you avoid? What are people in your market likely to see as weaknesses? What factors lose you sales?

Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don't see? Are your competitors doing any better than you? It's best to be realistic now, and face any unpleasant truths as soon as possible. Opportunities:

What good opportunities can you spot? What interesting trends are you aware of?

Useful opportunities can come from such things as: Changes in technology and markets on both a broad and narrow scale.

Changes in government policy related to your field. Changes in social patterns, population profiles, lifestyle changes, and so on. Local events.

Tip:
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.

Threats

What obstacles do you face? What are your competitors doing? Are quality standards or specifications for your job, products or services changing? Is changing technology threatening your position? Do you have bad debt or cash-flow problems? Could any of your weaknesses seriously threaten your business?

Tip:
When looking at opportunities and threats, PEST Analysis can help to ensure that you don't overlook external factors, such as new government regulations, or technological changes in your industry.

A key challenge for any business is to convert weaknesses into strengths. For example: Weakness Outdated technology Possible Response Acquire competitor with leading technology

Skills gap Invest in training & more effective recruitment Overdependence on a single product Diversify the product portfolio by entering new markets Poor quality Invest in quality assurance High fixed costs Examine potential for outsourcing or offshoring Dont forget that for every perceived threat, the same change presents an opportunity for business.

Strengths, Weaknesses, Opportunities and Threats (SWOT).

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

Example 1 (quick) - In SWOT, strengths and weaknesses are internal factors. For example:A strength could be:

Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures. Any other aspect of your business that adds value to your product or service.

A weakness could be:

Lack of marketing expertise. Undifferentiated products or services (i.e. in relation to your competitors). Location of your business. Poor quality goods or services. Damaged reputation.

In SWOT, opportunities and threats are external factors. For example: An opportunity could be:

A developing market such as the Internet. Mergers, joint ventures or strategic alliances. Moving into new market segments that offer improved profits. A new international market. A market vacated by an ineffective competitor.

A threat could be:

A new competitor in your home market. Price wars with competitors. A competitor has a new, innovative product or service. Competitors have superior access to channels of distribution. Taxation is introduced on your product or service.

Simple rules for successful SWOT analysis.

Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis. SWOT analysis should distinguish between where your organization is today, and where it could be in the future. SWOT should always be specific. Avoid grey areas. Always apply SWOT in relation to your competition i.e. better than or worse than your competition. Keep your SWOT short and simple. Avoid complexity and over analysis SWOT is subjective. Once key issues have been identified with your SWOT analysis, they feed into marketing objectives. SWOT can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis. So SWOT is a very popular tool with marketing students because it is quick and easy to learn. During the SWOT exercise, list factors in the relevant boxes. It's that simple. Below are some FREE examples of SWOT analysis - click to go straight to them

Internal and external factors

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories: Internal factors The strengths and weaknesses internal to the organization. External factors The opportunities and threats presented by the external environment to the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4Ps; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix. SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats. It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

Use of SWOT analysis

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. Examples include: nonprofit organizations, governmental units, and individuals. SWOT analysis may also be used in pre-crisis planning and preventive crisis management. SWOT analysis may also be used in creating a recommendation during a viability study/survey.