aiou Course: Strategic Management of Public Sector (5013-1)  solved assignment autumn2022

Course: Strategic Management of Public Sector (5013)                           Semester: Autumn, 2022

Assignment No. 1


  1. 1 Clearly distinguish between corporate and business strategy and discuss the dimensions of strategic decisions in public sector organizations.


All companies need strategies to achieve their goals and be competitive and successful in their markets. Two commonly used approaches are business strategies and corporate strategies. These strategies differ from each other yet work together to improve performance and make companies profitable.

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What is a business strategy?

A business strategy is a plan for attracting customers, gaining their business and selling a product or service to make a profit. It’s designed to help a company be competitive in its market. Organizations create business strategies to reach specific goals.

  • A business strategy might be in summary or outline form and include steps for:
  • Getting customers
  • Increasing customer satisfaction
  • Increasing profits

Choosing which product to offer

A business strategy should show a company or company unit where it has a competitive advantage and how to benefit from that. It lists the actions needed to reach desired goals, so managers can make smart hiring and resource decisions. Managers can adjust their business strategy depending on market demand.

What is a corporate strategy?

A corporate strategy is a plan that helps an organization decide what markets it wants to enter and how. Businesses often use corporate strategies when they are trying to diversify, or enter a new market. This strategy guides a company’s growth. A corporate strategy typically includes:

  • What market the organization wants to compete in
  • How different business units can add more value to the organization
  • How entering a new market can make the company more competitive
  • The timing and pace of the company’s growth

Business stakeholders and upper-level management use corporate strategies to decide what industries they should be involved with and how to acquire business units that can help it be successful.

Differences between business strategy vs. corporate strategy

Business and corporate-level strategies differ primarily in their objectives. A business strategy focuses on competing in the marketplace, while a corporate strategy focuses on business growth and profits. Corporate strategies function at a higher level than business strategies. Managers should develop business strategies, however, with the overall corporate strategy in mind because their decisions affect the entire business plan and reflect the organization’s shared goals.

Here are the other key differences between a corporate versus a business strategy:


Mid-level managers, such as department heads, use business strategies to achieve objectives and goals within their departments or divisions. This strategy is useful for a variety of company units. Upper-level managers, such as chief executive officers, use corporate strategies to help their companies grow according to their vision. This strategy applies to the entire organization.

Small businesses sometimes create corporate strategies to guide their growth and accomplish their goals until they are big enough to need business strategies. Large-scale companies need business strategies to help its various units and departments achieve their specific goals. This is because each department might have different objectives and, therefore, require a different strategy for its products or services.


Business strategies are generally short term, while corporate strategies are long term. Managers create business strategies to solve current or routine operations issues and reach measurable objectives, such as gaining a certain amount of new customers or revenue. These strategies are valuable for helping teams achieve temporary and continually changing goals that allow them to compete in a certain section of the market.

Company leaders design corporate strategies to reach competitive in market

long-term goals, such as profit maximization, and solve comprehensive issues affecting the entire organization, like growth and diversification. A corporate strategy is usually long-lasting and based on a permanent company vision. The CEO or stakeholders might measure this strategy’s success over many years.


Business and corporate strategies have different objectives when achieving and measuring success. A business strategy focuses on:

  • Creating value for the consumer
  • Being competitive in the market by offering customers a product or service that’s unique to their competitors’ products
  • Cost leadership, or having the best prices in the industry
  • A corporate strategy focuses on:
  • Creating more value for the company
  • Growing the organization through diversification or expansion
  • Maximizing profits
  • Downsizing or reducing spending as needed

Basically, a business strategy focuses on how a company plans to compete in a market, while a corporate strategy focuses on the markets it wants to enter and the businesses it wants to compete with.

Managers can use business strategies to:

Create a clear business plan for employees and department leaders to follow

Assess their products, target audience and competition so they can identify their competitive advantage

  • Gain a better understanding of their current business model and its strengths, opportunities and areas for improvement
  • Determine the resources and steps required to be more competitive in the market
  • Solve common department-level problems
  • Motivate and inspire their employees through achievable goals
  • Attract new investors
  • Demonstrate their success and credibility through measurable results
  • Company leaders can use corporate strategies to:
  • Clearly define the space the company wants to occupy within an industry
  • Give managers guidance for reaching long-term goals
  • Establish and meet stakeholder and investor expectations
  • Improve efficiency by combining departments, sharing resources or buying or selling business units
  • Determine the direction, speed, timing and extent of the company’s growth

Investigate new business opportunities

Decide what companies to compete with and how to enter and win markets

Related: How To Create a Long-Term Strategy in 8 Steps


While the main benefit of a business or corporate strategy is the same—success and profitability for the company—each approach has different advantages. The benefits of creating a business strategy include:

  • Having clear direction
  • Making better business decisions
  • Gaining a competitive advantage in the market
  • Improving a product or service’s performance
  • Satisfying customers
  • Satisfying and retaining employees
  • The benefits of creating a corporate strategy include:
  • Ensuring efficient operations
  • Providing long-term sustainability
  • Ensuring the company follows its vision and mission statement
  • Maximizing profits
  • Minimizing risk
  • Improving management


  1. 2 Explain the major factors that should be considered within the external environment in strategy formulation and control


If a business wants to be successful in the marketplace, it is necessary for them to fully understand what factors exert impact on the development of their company. Once they know about both positive and negative effects within and outside the company, they can produce suitable strategies to handle any predicted situation. Therefore, examining internal and external factors is considered the most important task for an enterprise before launch any strategic marketing plan

Understanding of Business Environment

To get a proper understanding of the business environment, we should step by step analyze individual elements of this term.

First of all, “environment” can be acknowledged as the surroundings or conditions in which a specific activity is carried on.

Secondly, because we know that a business firm is a social entity which is formed by a hierarchical structure where all necessary items of its own are activated together to reach the collective goal.

Therefore, it is absolutely that every factor inside or outside a business organization has a profound influence on business activities.

In other words, internal and external environment create a business environment

The Importance of Business Environment Understanding

Because business environment inserts its impacts on business success, scale, vision, and development strategy, having fully understanding about this issue should be prioritized by leaders.

Once they know about both positive and negative effects within and outside the company, they can produce suitable strategies to handle any predicted and unpredicted situation.

Internal and External Factors – What are They?

First, you need to understand that there is a variation of internal and external factors depending on the size, type, and business status. However, you can find those key factors by analyzing the business environment using the following categories:


Internal Environment Factors

The internal factors refer to anything within the company and under the control of the company no matter whether they are tangible or intangible. These factors after being figured out are grouped into the strengths and weaknesses of the company. If one element brings positive effects to the company, it is considered as strength.

On the other hand, if a factor prevents the development of the company, it is a weakness. Within the company, there are numerous criteria need to be taken into consideration.


There are 14 types of internal environment factors:

  1. Plans & Policies
  2. Value Proposition
  3. Human Resource
  4. Financial and Marketing Resources
  5. Corporate Image and brand equity
  6. Plant/Machinery/Equipments (or you can say Physical assets)
  7. Labour Management
  8. Inter-personal Relationship with employees
  9. Internal Technology Resources & Dependencies
  10. Organizational structure or in some cases Code of Conduct
  11. Quality and size of Infrastructure
  12. Task Executions or Operations
  13. Financial Forecast
  14. The founders relationship and their decision making power.

External Environmental Factors

On the contrary to internal factors, external elements are affecting factors outside and under no control of the company. Considering the outside environment allows businessmen to take suitable adjustments to their marketing plan to make it more adaptable to the external environment. Sometimes this involves developing a new Amazon product photography strategy if you advertise your products on this platform, finding trustworthy partners willing to make an investment, or pruning the original business plan.

There are numerous criteria considered as external elements. Among them, some of the most outstanding and important factors need to listed the are current economic situation, laws, surrounding infrastructure, and customer demands.


Micro factors:

  1. Customers
  2. Input or Suppliers
  3. Competitors
  4. Public
  5. Marketing & Media
  6. Talent

Macro factors:

  1. Economic
  2. Political/legal
  3. Technology
  4. Social an
  5. Natural

Method of study

There are many factors affecting business have been studied, among them, we provide you a deep insight of the most decisive factors, which are at the center of every business today

Internal impacts

The internal factors refer to anything within the company and under the control of the company no matter they are tangible or intangible. These factors after being figured out are grouped into strengths and weaknesses of the company. If one element brings positive effects to company, it is considered as strength. On the other hand, if a factor prevents the development of the company, it is a weakness. Within the company, there are numerous criteria need to be taken into consideration.

Human resources

In the modern global economy, where ideas and digital skills – rather than physical resources are increasingly where economic value is realised, human resource can be a company’s greatest treasure. In general, the employees can be either a strength or weakness of the company depending on the level of practical skills, attitudes toward work, performance and so on. For example, if a business has skilled and motivated workers, they are sure to be the biggest asset of this enterprise.

Conversely, employees without carefully trained and have negative attitudes to their task will be an enormous challenge for the company to address. In short, the CEO should have a strategic and effective human management not only for the sake of company benefits but also for the positive development of their employees.

Internal factors of business environment – Human resources

Capital resources

From a general view, financial capital is the funds necessary to grow and sustain a business. CEO takes financial capital to invest in not only tangible goods such as factories, machines, tools and other productive equipment to produce an output but also intangible resources such as marketing, employee training, etc.

No company can survive without having capital resources. Once a company has enough budget, they can easily launch their projects, expand its scale and even achieve impressive result. For instance, in 2010 Coca Cola – “the 84 biggest economy” spent 2.9 billion USD for marketing, which was more than that total marketing investment of Microsoft and Apple. It can be said that without the big investment and stable financial resource, Coca Cola success would not be guaranteed.

There are also several ways for an enterprise to maintain stable budgets by some resources such as investment opportunities, funding, and annual income.

Internal factors affecting business environment – Capital resources

Operational efficiency

The concept of operational efficiency encompasses the practice of improving all of your processes, which are all your company’s activities leading to your final product or service.

Because Operational efficiency directly affects the company’s success in the marketplace, a businessman needs to truly know his company’s processes and follow them to discover whether they’re being performed in the correct manner or not. Here are some suggestions for you to achieve this efficiency :

  • Study the business situation
  • Pay attention to product cost
  • Map process failure and discover failure
  • Use technology for better operation productivity

Organizational structure

To have a suitable organizational structure requires the owners have to consider carefully set up a business management system to work smoothly within the company. Whether it is a centralized or decentralized system, the most important thing is how effective the structure is when applied for the company. The heads of departments need to make sure that the information flow is widely conveyed to all customers. Suitable rules and regulations are being applied to ensure the benefits of employees, and the business as well.

Organizational structure is one internal factor affecting business


When you already have well-trained and motivated workers, an effective operational and organizational system, make sure that the infrastructure of the company are good enough for all your functions. With the modern and high quality facilities, stable power, internet and wifi connection, and so on your company is likely to perform better. In other words, the better your infrastructure, the more opportunities for your company to perform successfully.


In the competitive marketplace and industrial revolution we are living now, no company can survive without upgrade new ideas and technology served overall success.

Fundamentally, innovation refers to the introduction of something new into your business with the ideas come from inside the business such as from employees, developers, managers or from the outside world like suppliers, customers, etc. Successful innovation can bring about productivity, cost reduction, higher competitiveness, brand value, turnover increase. In contrast, companies which fail to apply innovation will surely face the risks of losing market share to competitors, underlying profit loss and losing key staff.

Innovation is rewarding for your business only when you step by step start to holistically approach to innovation, plan and encourage innovation and spread investment for innovation in your business.

Internal environment factors – Innovation

External factors

On the contrary to internal factors, external elements are affecting factors outside and under no control of the company. Considering the outside environment allows businessmen to take suitable adjustments to their marketing plan to make it more adaptable to the external environment. There are numerous criteria considered as external elements. Among them some most outstanding and important factors need to listed are current economic situation, laws, surrounding infrastructure, and customer demands.

Economic situation

Economy is one of the most determining factors to the success of the company even though it is an external element. Within the economy, some contributing factors such as the fluctuation of interest rate, economic crisis, and so on directly and strongly affects the consumption of buyers, and consequently, the profits of businesses.

No external factors affect business more than an economic condition, which is the present state of the economy. As the economy goes through expansion and contraction, it’s condition changes over time. Positive economy condition can be favorable for business development and adverse ones may generate negative consequences such as narrow down business scale, capital shortage or even bankrupt.

There are 7 factors that have direct impacts on business firm.

  1. Tax rate
  2. Exchange rate
  3. Inflation
  4. Labor
  5. Demand/supply
  6. Wages
  7. Recession


The rules and regulations from local government play an integral role in the development of the company. There are some countries which their laws prevents the development of some certain industries. That can be a threat to the company. On the other hand, some industries receive positive and continuous support from local government via their rules and regulations. Besides, if the laws allow organization outside the countries invest in local industries, they will indirectly create an enormous source of financial support for local business.


External environment factors – Laws

Technological factors

Artificial intelligence, smart internet searches, and other high tech functions- all kind of technology has been at the forefront of many business for ages. For instance, American Airlines started using a comHiputerized flight booking system and Bank of America took on an automated check-processing system. No matter what the size of your enterprise is, both tangible and intangible benefits of technology are well-known.

Because it can help you generate profits and produce the results as your customers’ needs. In particular, the culture, efficiency and relationships of a business are obviously affected by technology infrastructure. Furthermore, it also exerts impacts on the security of confidential information and trade advantages.

Today it is so decisive to entrepreneurs that technology can be their best friend or worst friend depending on how it is used in the competitive digital business market.

Customer demands

One of the most fundamental factors we learn in economics is that satisfying customer demand is a must for every business survival. It is obvious that your product is served for the needs of customers then under any circumstance, your business can develop without following this mission. Beside to be the leading company entrepreneurs should not only identify but also tailor their customer’s interest.


We all know that what people want, what people need, and what they demand are usually different from each other. Customers need something to communicate with their family member outside their countries, they want to a smartphone which can perform multi-function; however, they cannot afford that smartphone with a limited budget. Therefore, their demand is just a typical phone which can perform basic functions. If your company is not able to figure out what are your customer demands, you will face difficulty in how to make your products consumed by customers.



  1. 3 Discuss the strategic planning process and the role of strategic plans in todays customer oriented organizations.         


Strategic Planning

What is a strategic plan? Strategic planning in management is the process of documenting and establishing the direction of your small business—by assessing both where you are and where you’re going. So, what is the purpose of a strategic plan? And what does an effective strategic plan consist of? A company’s strategic plan consists of it’s:

  • Mission
  • Vision
  • Values
  • Long-term goals
  • Action plans

A well-written strategic business plan can play a pivotal role in your small business’s growth and success because it tells you and your employees how best to respond to opportunities and challenges.

In recent years, many small business owners have been focusing on long-term planning. In fact, in 2020, there were three business areas that small businesses focused on strategy for, including:

  • 46% in sales
  • 41% in advertising
  • 36% in customer service

strategic planning

If you haven’t been focusing on a long-term business planning process, it’s not too late to think differently. Your future success depends on effective organizational strategic planning. It’s also important to remember that a strategic planning process model involves your entire business. The discussions that result can lead to meaningful changes in your business. The purpose of strategic planning is to also analyze your business and set realistic goals and objectives. This leads to the creation of a formal document that lays out the company’s views and strategic goals for the future.

The 3 Step Strategic Planning Process

What are the steps in strategic planning? When it comes to the strategic planning process, think of it as having three phases:

  1. Discussion
  2. Development
  3. Review and updating

The goal of developing a strategic plan is to ensure everyone in the business is aligned when it comes to your small business’s goals and objectives, as well as to create a formal strategic plan document.

examples of strategic plans

  1. Discussion Phase

The discussion phase is meant to gather as much information, opinions, and input as possible. Set up a regularly scheduled meeting with the employees and any other staff in your business who will be involved with strategic planning. Make sure you have an agenda and clear expectations of what you want to accomplish in each meeting. This will keep discussions on track and help prevent distractions. In the first few meetings, try to answer questions that will help you define the business’s current status, such as, “Where are we now?” and “Where are our competitors?” Once you have a good idea of where the business is, you can focus in on specific details in future meetings.

In addition to regular meetings with your employees at your business, you can also gather information from people outside your company, like:

  • Vendors
  • Investors
  • Analysts

External people will have a unique perspective on not only your business, but also the industry you’re operating in. Getting their opinions on where they think the industry is going and what they think will change in the future can help you put together your strategic plan and determine where you want your business to be down the road.

Your strengths should be pretty easy to identify. When you’re discussing your business’s weaknesses, don’t be afraid to be candid. Every business has weaknesses and things to work on. Any weakness you and your employees note means it’s something you’ll aim to improve on in the future with a detailed initiative outlined in the strategic plan.

Opportunities available to your business may be pretty clear, while identifying threats to your business can be more difficult. Speaking with people outside of the company should give you a good idea of where the industry could be heading and if there are any major competitors or challenges coming. If you can identify a number of threats and challenges to your business early on, it puts you in a better position to address them if and when you encounter them down the road.

strategic planning templates

  1. Development Phase

After you’ve collected all of the information, it’s time for the development phase. This is when you’ll start putting together your business’s strategic plan. A strategic plan consists of five key components:

  • A vision statement
  • A mission statement
  • Goals and objectives
  • An action plan

Details on how often the strategic plan will be reviewed and updated

Decide with your employees what you will use to create the strategic plan. Are you going to purchase software to help you create and house the plan? Or are you going to create the plan yourself and save it in the cloud for easier access?


When you’re creating goals and objectives for your business, make sure they’re realistic and measurable. Work with your employees to create goals and objectives for at least the next one to three years. And discuss how these goals and objectives will be measured and tracked.

For example, if you have a goal of increasing sales by 10% in the next year, you can track this by measuring sale numbers. Equally important is having an action plan to achieve these goals and objectives. If you’re trying to increase your sales by 10% in a year, you can pursue more marketing and social media outreach as part of your action plan. If an action plan doesn’t help your business achieve its goals, the plan needs to be rewritten.

strategic business planning

  1. Review and Updating Phase

A critical part of the strategic plan should address how often it will be reviewed and updated. Designate someone to be responsible for reviewing, updating, and sharing any changes with the rest of the company. Whether it’s you or another employee, you’ll want to make sure everyone in the business is aware of the changes and how they affect the overall strategic plan.

The strategic plan is meant to be a fluid document; don’t fall into the trap of creating the document and letting it sit on a shelf for years. If you developed meaningful objectives and action plans, they should help with regularly checking the strategic plan. For example, if your action plan requires you to put in sales numbers every quarter to track revenue, you could take that time to review the rest of the plan.

You can also set an alert to check the strategic plan on a regular basis. Whether it’s every few months, every quarter, or every year, a recurring alert can help you review and update the document.

When you’re reviewing your strategic plan, you may find that you’re not on track to meet an objective or goal that you previously set up. Don’t panic. Reassess the situation and, if you need to, discuss the issues with your employees. Figure out what went wrong and why your business isn’t on pace; maybe the goal was too ambitious or not realistic. Change the goal or objective and update the action plan to help you get back on track.

You also may find that your small business has met a goal or objective earlier than you thought you would. If so, you can create a new goal or objective to work toward, or try to maintain the progress you’ve already made. Discuss the ideas with your employees to see what they think is possible.

Strategic Plan Examples

Strategic plans can vary, depending on the type of business you operate or the industry you’re in. Here are a few examples of different strategic plans:

Strategic Planning Examples for Business

A strategic plan for a business will include the company’s mission and vision statement, as well as its goals and objectives and the action plans to achieve them.

The strategic plan is different from a business plan. The business plan is typically used to help start the business and acquire the necessary funds to open the doors. A strategic plan outlines the strategy for growth and success in the future by using existing resources.

The Canadian Soccer Association’s strategic plan for 2014 to 2018 is full of information and details. It includes an examination of the organization’s current status and what the focus in the future will be. It includes the goals and objectives of the Canadian Soccer Association, as well as the strategies it’ll use to achieve them.

According to a recent report, the top challenges for small businesses in 2021 are:

23% said a lack of capital and/or cash flow

15% said they anticipate marketing and advertising struggles

19% said they expect challenges with recruiting and retaining employees

Nonprofit Strategic Plan Examples

A strategic plan for a nonprofit organization will include the same key components. A nonprofit strategic plan may focus more on the internal and external factors that can pose any threats or challenges to the organization. Because the structure of a nonprofit organization can change rapidly due to different factors, the strategic plan takes this into account and aims to address possible changes ahead of time.

The Minnesota Council of Nonprofits’ strategic plan for 2010 through 2014 outlines the organization’s:


  • Vision
  • Mission
  • Community it serves
  • Goals for the four-year period

Each goal includes an in-depth description of why it’s important to the Minnesota Council of Nonprofits, as well as the strategies involved to achieve those goals. The plan also lists the people responsible for working on the strategic plan.


IT Strategic Plans

The IT industry is constantly changing. This means a strategic plan for an IT business should identify and address the changes in the future as well as possible. While other business strategic plans may focus on the next three to four years, it’s not uncommon for an IT strategic plan to look at the next year to year-and-a-half.\

When it comes to developing, reviewing, and updating your IT strategic plan, it’s important to involve your business’s Chief Information Officer. This person’s knowledge and skill set is useful in putting together a strategic plan for your tech business. In addition to the Chief Information Officer, you and your employees can look at whether you need to upgrade any part of your infrastructure to meet the goals and objectives you’ve outlined in your strategic plan.

Because of the rapidly changing circumstances, you may be reviewing your IT strategic plan more frequently than with other businesses. Adjust your plan as necessary to put your business on the best path to success. The plan also should include details on how to make a decision when it comes to investing in new equipment or technology.

strategic planning framework

Marketing Strategic Plans

A marketing strategic plan’s goal should be to generate sales for the business. Whether it’s increasing sales numbers by 15% or increasing the number of customers in the next quarter, a marketing strategic plan helps businesses generate more revenue and increase their customer base.

A marketing strategic plan can include marketing technology, software, or web-based platforms to help track your business’s progress toward its goals. The plan also could address the specific types of marketing the business will pursue—for example, whether your business will pursue traditional print advertising or digital ads.

Because a marketing strategic plan aims to increase your business’s exposure and numbers through different techniques and methods, it’s a good idea to include the budget in the document. This way, you and your employees will work toward the marketing goals and objectives you want to achieve without spending too much money.

Strategic Planning Template Checklist

Should you use strategic planning models or templates? Yes, in fact, a good strategic plan template, sometimes called a strategy mapping template is like a checklist. The template will include different sections for you to complete and help you cover a variety of topics. Using a thorough template will help ensure you have a comprehensive strategic plan for your business.

You can use computer software for your strategic planning template, or you can create your own with Microsoft Word or Excel. You can also download our Strategic Plan Example Template to use.

strategic planning process

What does a strategic plan include? At the top of your template, label it “Executive Summary” and provide an overview of your business. Include the time period you’re looking at for your business’s strategic plan; for example, if the strategic plan provides a three- to five-year outlook.

Underneath this section would be information on “Your Company.” This is where you’ll put in your mission statement, vision, values, and information on leadership.

A section on “Research” will include information on your clients and customers, competitors and the industry.

You can also create a section on “Products and Services,” which will detail any products you sell, pricing strategy, delivery systems and capabilities, and suppliers.

A section of your template should focus on “Measurable Goals.” These should be realistic goals or objectives that you want your business to achieve within the time period you set. Don’t forget to include details on how the progress of each goal or objective will be measured.

Whether you include it within the Measurable Goals section or as a stand-alone group in the template, don’t forget about your “Action Plans.” This provides an overview of how you and your employees are going to achieve your business goals and operational plans.

You also can put your SWOT analysis into the template. List the identified strengths, weaknesses, opportunities, and threats with your business. Remember to be honest and candid. When you are reviewing your strategic plan in the future, you can reference the initial SWOT analysis and check to see what has changed.

The last section should detail “Reviews and Updating.” Explain how often the plan should be checked (every few months, quarterly, annually, etc.). Provide a list of people who should be responsible for reviewing and updating the strategic plan, as well as communicating any changes with the broader business


  1. 4 Explain the importance of mission statements and the information that should be included in a good mission statement


Mission Statement

A mission statement is used by a company to explain, in simple and concise terms, its purpose(s) for being. The statement is generally short, either a single sentence or a short paragraph

A mission statement is used by a company to explain, in simple and concise terms, its purpose(s) for being.

It is usually one sentence or a short paragraph, explaining a company’s culture, values, and ethics.

Mission statements serve several purposes, including motivating employees and reassuring investors of the company’s future.

To craft a mission statement, consider how your company impacts customers, donors, investors, or your community and why you strive to help these parties.

A mission statement might slightly overlap other marketing content, but it is different from a vision statement, value statement, brand, or slogan.

How a Mission Statement Works

Mission statements serve a dual purpose by helping employees remain focused on the tasks at hand, and encouraging them to find innovative ways of moving toward increasing their productivity with the eye to achieving company goals.

A company’s mission statement defines its culture, values, ethics, fundamental goals, and agenda. Furthermore, it defines how each of these applies to the company’s stakeholders—its employees, distributors, suppliers, shareholders, and the community at large. These entities can use this statement to align their goals with that of the company.

The statement reveals what the company does, how it does it, and why it does it. Prospective investors may also refer to the mission statement to see if the values of the company align with theirs. For example, an ethical investor against tobacco products would probably not invest in a company whose mission is to be the largest global manufacturer of cigarettes.

It is not uncommon for large companies to spend many years and millions of dollars to develop and refine their mission statements. In some cases, mission statements eventually become household phrases.

Mission statements aren’t just for small or large companies. Many successful individuals, professionals, and investors have taken the time to craft a personal mission statement. These personal mission statements often incorporate the financial, professional, spiritual, and relational aspects of life. This, in turn, helps an individual maintain a healthy work/life balance that increases their personal achievement in all of these areas.

Drafting a Mission Statement

While it may be difficult to narrow down the focus of your company in a single statement, here are some tips to help you write a good mission statement.

First, outline what your company does. This may be a good you produce or a service you provide to your customers—whatever makes your business run.

Next, describe the way in which your company does what it does. Instead of being technical—that’s not the point here—think of what values go into the core of your business. Maybe you value quality, customer service, or being sustainable. Alternatively, you may foster creativity and innovation in your business. These are key points to outline in your mission statement.

Finally, include why you do what you do in your mission statement. This is key. It helps you stand out as a business, highlighting what sets you apart from the others in your industry. Remember to keep the mission statement short and to the point.

After you’ve drafted it, remember to look it over, edit it, and have someone else give it a once over. After you’ve approved it, you’ll need to find a way to incorporate it wherever you can. In addition, be mindful to periodically review your mission statement. Although it’s never ideal to constantly pivot your image and change your mission statement, your company may outgrow or shift directions resulting in the need of a new statement.

A company’s mission is its identity, and its vision is its journey to accomplishing its mission. A company should take as long as it needs to craft the right statement to describe its mission.

Displaying a Mission Statement

Once a mission statement is crafted, it’s up to the company to make it publicly known. A mission statement only holds value if it is shared with existing and potential customers, vendors, donors, or employees.

Because a company’s mission statement is often pretty short, it is easy to incorporate into marketing material. A mission statement should always be found somewhere on a company’s website. In addition, it can also be used in marketing documents. A company may solicit employees to incorporate adding its mission statement as part of a company-wide standard e-mail signature block.

A mission statement is also a perfect “elevator pitch” sentence that key members of your company should know. Because it’s so brief, it is easy to memorize. In addition, it’s a perfect introduction for someone who has never heard of your company or wants to know more. Whether it’s at a networking event, social gathering, or bus ride to work, a mission statement is an easy way to captivate a stranger’s interest in your company should they ask what your company does.

Advantages and Disadvantages of Mission Statements

Companies can benefit from having a mission statement. First, it outlines a company’s goals and position in the industry for its customers, competitors, and other stakeholders. It also helps the organization focus and stay on track to make the right decisions about its future.

Furthermore, the mission statement helps clarify a company’s purpose. With a mission statement, a company’s customers and investors can rest assured that the company is fully committed to achieving its goals and maintaining its values. It is also useful to guide and motivate employees, keeping them in line with the company’s values.

Last, a mission statement adds validity to an organization. From the outside looking in, a mission statement demonstrates that a company has considered the big picture and the major goals it wants to accomplish. It demonstrates thoughtful leadership, reputability, and inspiration to potential investors, employees, or donors.

There are drawbacks to having a mission statement. Mission statements may sometimes be very lofty and far too unrealistic, which can distract employees from the company’s goals. Management may become too distracted with high-level targets that shorter-term, necessary steps to get there become neglected.

Even though a mission statement is short and concise, it may take a lot of time and money to develop. The resources spent on a bad mission statement could be better spent elsewhere, creating an opportunity loss. The difficulty of crafting such a concise statement is many parties often have ideas, and there’s not room for many of them. After the bulk of the work has been done, companies may struggle with “wordsmithing” or simply rearranging words instead of trying to generate value.

Last, by publicly announcing to the world the company’s mission, some people on the outside (or even the inside) may disagree with the mission. In the examples below, some individuals may be skeptical of alternative sources of energy and may be scared away when learning of Tesla’s mission statement. A mission statement doesn’t give much opportunity for a rebuttal to clarify or further explain what a company is all about.

A mission statement is not required, though it may be a grant application for a nonprofit or asked for by an interested investor of a company.

Mission Statement Examples

Mission statements vary considerably from company to company. The following examples are the mission statements of some of the trending companies as of 2022:

Nike (NKE): “Our mission is what drives us to do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.”


Walmart (WMT): “We save people money so they can live better.”


Starbucks (SBUX): “To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.”


Tesla (TSLA): “To accelerate the world’s transition to sustainable energy.”


JP Morgan (JPM): “We aim to be the most respected financial services firm in the world.”


Mission Statements vs. Other Statements

A mission statement is often confused or grouped with other types of organizational statements. Here are some other types of content and how they vary from a mission statement.

Mission Statement vs. Vision Statement

A company’s mission statement differs from its vision statement. While the mission statement remains unchanged for the most part and represents who the company is or aspires to be for the entirety of its existence, the vision statement can change. The latter outlines what the company needs to do to remain the way it has presented itself to be. In effect, a company’s mission is its identity, and the vision is its journey to accomplishing its mission.

Mission Statement vs. Value Statement

A company’s value statement is also centered around a company’s core principles and philosophy. However, it is more direct in guiding how decisions will be made and what will impact the daily culture of the organization. A value statement often includes actionable direction such as “taking ownership”, “acting ethically”, “doing what is right”, or “being transparent.” Whereas a mission statement describes the highest level of purpose, a vision statement starts to describe how that purpose will be achieved.

Mission Statement vs. Company Goals

A company’s goals or business plan may be publicly disclosed or kept private/internal. In general, a company’s goals are often even more specific, potentially referring to specific business lines, growth percentages, geographical regions, or new initiatives. While a mission statement often does not mention a specific aspect of the business, company goals are often measurable relating to departments or products so a company can track progress. A company’s mission statement should drive the goals that are set.

Mission Statement vs. Brand

A brand is an suite of elements that encompasses a company’s identity. This includes its marketing materials, engagement in community events, reviews from current and former employees, and its logo presence. A company’s brand is also shaped by its mission statement. Though a small component, a mission statement helps customers, employees, and investors form an opinion of a company.

Mission Statement vs. Slogan

A slogan is a very brief, often memorable phrase that people primarily outside of your company can remember. Utter a great slogan such as “Just Do It” can invoke memories, commercials, logos, brand ambassadors, and emotions through a successful ad campaign. Although a mission statement is brief, it is longer and relatively more detailed compared to a slogan. A mission statement isn’t meant to necessarily be catchy; it’s meant to be informative and useful for guiding high-level decisions. Alternatively, a slogan is a very pointed marketing phrase used to be memorable even if it is less informative.

What Is a Mission Statement?

A mission statement is a brief description of the overarching meaning of the company or nonprofit. A mission statement does not explain what a company does or how it does it. It attempts to succinctly explain why a company exists and what its purpose is.

What Is an Example of a Mission Statement?

Microsoft’s mission statement is: “Our mission is to empower every person and every organization on the planet to achieve more.”


What Is in a Good Mission Statement?

A good mission statement is concise. It should be limited to one sentence, though it shouldn’t be too limiting as it should encompass the entire company’s purpose. A good mission statement also focuses on the long-term goal it wishes to deliver to customers.

How Do You Write a Mission Statement?

There’s no single best way to come up with a mission statement. In general, the mission statement writing process should start with considering what a business does for the customers, employees, and general public. It’s often best to begin by collecting more content than needed, then later refining the mission statement into a single sentence.

One method of brainstorming ideas of a mission statement is to think about personal experiences from the company. This could also include soliciting ideas or memories from employees. Instead of focusing directly on the narrow business element of your company, embrace the broader aspect. For example, Microsoft did not craft its mission statement around delivering Windows ’98. Rather, it crafted its mission statement around the possibilities it presented through its product

  1. 5 Discuss the five forces model as suggested by Michael Porter for industry analysis and formulation of appropriate business strategies


 Porter’s Five Forces – Competitor Analysis (Michael Porter)

Michael Porter’s Five Forces Analysis

Porter’s 5 forces – book coverMichael Porter’s five forces is a model used to explore the environment in which a product or company operates.

Five forces analysis looks at five key areas mainly the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry

Introduction to Porter’s 5 forces

The model of the Five Competitive Forces was developed by Michael E. Porter in his book „Competitive Strategy: Techniques for Analyzing Industries and Competitors“ in 1980. Since that time the ‘five forces tool’ has become an important method for analyzing an organizations industry structure in strategic processes.

Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should based on an understanding of industry structures and the way they change.

Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry scan.


The Five Forces model of Porter is an ‘outside looking in’ business unit strategy tool that is used to make an analysis of the attractiveness or value of an industry structure. The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:

The entry of competitors (how easy or difficult is it for new entrants to start to compete, which barriers do exist)

The threat of substitutes (how easy can our product or service be substituted, especially cheaper)

The bargaining power of buyers (how strong is the position of buyers, can they work together to order large volumes)

The bargaining power of suppliers (how strong is the position of sellers, are there many or only few potential suppliers, is there a monopoly)

The rivalry among the existing players (is there a strong competition between the existing players, is one player very dominant or all all equal in strength/size)

  • Some academics believe that a sixth force could be included – government.
  • The Original Porter’s Five Factors:
  • Threat of New Entrants –

The easier it is for new companies to enter the industry, the more cut-throat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

  • Existing loyalty to major brands
  • Incentives for using a particular buyer (such as frequent shopper programs)
  • High fixed costs
  • Scarcity of resources
  • Government restrictions or legislation
  • Entry protection (patents, rights, etc.)
  • Economies of product differences
  • Brand equity
  • Switching costs or sunk costs
  • Capital requirements
  • Access to distribution
  • Absolute cost advantages
  • Learning curve advantages
  • Expected retaliation by incumbents

Power of Suppliers

This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that suppliers might have power:

  • There are very few suppliers of a particular product
  • There are no substitutes
  • The product is extremely important to the buyer, they cannot do without it
  • The supplying industry has a higher profitability than the buying industry
  • Supplier switching costs relative to firm switching costs
  • Degree of differentiation of inputs
  • Presence of substitute inputs
  • Supplier concentration to firm concentration ratio
  • Threat of forward integration by suppliers relative to the threat of backward integration by firms
  • Cost of inputs relative to selling price of the product
  • Power of Buyers/ Customers

This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that customers might have power

  • Small number of buyers
  • Purchases of large volumes
  • Switching to another (competitive) product is simple
  • The product is not extremely important to the buyer, they can do without it for a period of time.
  • Customers are price sensitive
  • Buyer concentration to firm concentration ratio
  • Bargaining leverage
  • Buyer volume
  • Buyer switching costs relative to firm switching costs
  • Buyer information availability
  • Ability to backward integrate
  • Availability of existing substitute products
  • Buyer price sensitivity
  • Price of total purchase
  • Availability of Substitutes

What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses to be a serious threat. Here are a few factors that can affect the threat of substitutes:

  • Buyer propensity to substitute
  • Relative price performance of substitutes
  • Buyer switching costs
  • Perceived level of product differentiation
  • Fad and fashion
  • Technology change and product innovation

The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker is likely to switch over to a beverage like tea because the products are so similar.

If substitutes are similar, then it can be viewed in the same light as a new entrant.

Consider technology substitutes (who would have thought that MP3 technology would replace tape & CD’s?)

Competitive Rivalry


And last but not least, this describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from:

Many players of about the same size, no dominant firm.

Little differentiation between competitors products and services.

A mature industry with very little growth.

Companies can only grow by stealing customers away from competitors.

For many industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc.

  • Number of competitors
  • Rate of industry growth
  • Intermittent industry overcapacity
  • Exit barriers
  • Diversity of competitors
  • Informational complexity and asymmetry
  • Fixed cost allocation per value added
  • Level of advertising expense

Use of the Information form Five Forces Analysis:

Porter’s Five Forces Analysis can provide valuable information for three aspects of corporate planning:

Statistical Analysis:

The Five Forces Analysis allows determining the attractiveness of an industry. It provides insights on profitability. Thus, it supports decisions about entry to or exit from and industry or a market segment. Moreover, the model can be used to compare the impact of competitive forces on the own organization with their impact on competitors. Competitors may have different options to react to changes in competitive forces from their different resources and competence’s. This may influence the structure of the whole industry.

Dynamical Analysis:

In combination with a PESTLE Analysis, which reveals drivers for change in an industry, Five Forces Analysis can reveal insights about the potential future attractiveness of the industry. Expected Political, Economical, Socio-demographical, Technological, Legal and Environmental changes can influence the five competitive forces and thus have impact on industry structures.

Useful tools to determine potential changes of competitive forces are scenarios.

Analysis of Options:

With the knowledge about intensity and power of competitive forces, organizations can develop options to influence them in a way that improves their own competitive position. The result could be a new strategic direction, e.g. a new positioning, differentiation for competitive products of strategic partnerships (see section 4).

Porters model of Five Competitive Forces allows a structured and systematic analysis of market structure and competitive situation. The model can be applied to particular companies, market segments, industries or regions. Therefore, it is necessary to determine the scope of the market to be analyzed in a first step. Following, all relevant forces for this market are identified and analyzed Hence, it is not necessary to analyzer all elements of all competitive forces with the same depth.

The Five Forces Model is based on microeconomics. It takes into account supply and demand, complementary products and substitutes, the relationship between volume of production and cost of production, and market structures like monopoly, oligopoly or perfect competition.

Influencing the Power of Five Forces

After the analysis of current and potential future state of the five competitive forces, managers can search for options to influence these forces in their organization’s interest. Although industry-specific business models will limit options, the own strategy can change the impact of competitive forces on the organization. The objective is to reduce the power of competitive forces.

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