Learning Unit 2 The Micro Environment
Outcomes
Describe vision statement Characteristics of a vision statement
Vision translated to mission statement
Describe mission statement Core components of the mission statement Additional components of the mission statement Explain organisational values Construct a Balanced Scorecard Explain: Growth, decline and corporate
combinations
Strengths
Weakness es
Internal Environment
Managers control the internal environment Vision Mission Values Goals Strategies
Align with the market and macro environment Survive over the long run!
Business Environment
Internal
Micro
External
Market Macro
Internal environment
Organisation resources
Vision and Mission
Organisational Values Strategic Objectives Strategies
Organisational Resources
The Vision Statement
Dream of the perfect future
Mental picture
Criteria:
Depict the perfect future Attainable Inspiring Buy-in of managers and workers Acceptable for stakeholders
Mission Statement
Core Components
Questions
Additional Components
The Mission Statement
Dream
What should we provide? Who is our market? How will we get the products to the market? Which resources? When is the best time to do it?
Reality
Answer the following questions:
The Mission Statement: Core Components
The Mission Statement
ADDITIONAL components workers will know
what top managements intent is:
Profitability, growth and survival Productivity Stakeholders Philosophy of the organisation Public image Clients Safety, health and environment
The Nandos Mission Statement Our mission at Nandos is to always deliver the Nandos experience to our customers. The Nandos Experience We will take you on a journey, your own voyage of discovery. You will come to discover how special it is to belong to the Nandos family. You will experience our traditional hospitality, warmth and fun. Your senses will be fired with the unique products and tastes of Portugal, all prepared with pride
We, as passionate committed retailers, understand and lead our customers through excellence and a deep knowledge of our products and services and the world we live in. We live the Woolworths difference through our values: quality and style deliver the best value a simple and fair deal service think customer innovation discover the difference integrity do what you say you will do energy be passionate and deliver sustainability build for a better future
Organisational Values
Often referred to in mission
statement.
Core components Additional components Statement of values
Statement of values
= Company Creed = Company Philosophy = State acceptable behaviour and what is not.
Type of values
Person al
Organisatio nal
Societ al
Motivational
Personal Values
Employees with own set of values.
Personal values not in conflict with organisation
values. Personal values from cultural background.
Societal Values
Direct society business operate in
Take into consideration..
Foundational values
Organisation built on these values.
Guide behaviour of everyone on every level.
Values could be:
Integrity Respect Accountability Fairness Caring
Motivational Values
Give organisation unique
personality. State expected behaviour. Behaviour Goals achieved. Examples:
Make it happen High
Productivity Do it together Teamwork Lets do it Taking action Do it better every time
Organisational Values
Different interpretations
What is integrity?
Values linked to specific behaviour
The Balanced Scorecard
Mission statements gives direction.
Not specific or measureable!
Mission clarity Translate Measurable
Organisational goals
BALANCED SCORECARD!
The Balanced Scorecard
BSC Mission statement Measureable goals
Financial and non-financial dimension
Balanced Scorecard: Factors examples
Department Finance Areas Return On Investment Cash Flow Return on Capital Employed Financial Results (Quarterly/Yearly)
Internal Business Processes Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation Learning & Growth Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities Customer Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate
The Balanced Scorecard
Strategies
Organisations compete Attain strategic
objective. Strategy:
Game plan
Outwit competitors
Attain goals
Same industry Often same goals
But different approach! Pep vs. Woolworths
Strategies: 3 Possible Game plans
Low-cost leadership strategy
All decisions focus on cost
Differentiation strategy
Cant compete on low cost Distinguish yourself from the competitor Woolworths: Quality of products
Focus strategy
Limited resources Small segment of market
Thus, game plan on specific market Focus
Then low-cost or differentiation strategy
Strategies
Each strategy Risk
Low-cost leadership strategy = Imitations Differentiation strategy = Not able to differentiate Focus strategy = Choose to small market segment
Choose a strategy Be more
SPECIFIC on
competing in industry
Grand Strategy
Growth
Grand Strategies
Decline
Corporate Combinations
Grand Strategies: Growth Strategy
Game plan for the organisation to grow.
Introduce new products to existing customers Enter a new market Create a new, innovative product for existing market Take over supplier of raw materials Risk Low Sound knowledge of: Product Market How to serve the market
Grand Strategy: Decline Strategy
Organisation unable to grow
Many new competitors enter the market Solution: Cut costs
Medium risk
Grand Strategy: Corporation Combination Strategy
Strategic alliances
High risk
Companies work together People problems Managers fighting for turf Different systems
