The first step in the process of developing a successful strategic position should be part of the founding of the firm itself. When entrepreneurs decide to start a business, they usually have a reason for starting it, a reason that answers the question “What is the point of this business?” Even if an entrepreneur initially thinks of starting a business in order to be their own boss, they must also have an idea about what their business will do.
Vision Statements
A vision statement is a future-oriented declaration of the organization’s purpose and aspirations. The vision statement is usually very broad, and it does not even have to mention a product or service. The vision statement does not describe the strategy a firm will use to follow its vision—it is simply a sentence or two that states why the business exists.
Here are some other examples of corporate vision statements:1O’Donovan, K. (2017, April 16). 20 Inspiring Vision Statement Examples (2017 Updated). Retrieved August 01, 2017, from http://www.lifehack.org/articles/work/20-sample-vision-statement-for-the-new-startup.html
- Disney: To make people happy
- IKEA: To create a better everyday life for the many people
- British Broadcasting Company (BBC): To be the most creative organization in the world
- Avon: To be the company that best understands and satisfies the product, service and self-fulfillment needs of women—globally
- Sony Corporation: To be a company that inspires and fulfills your curiosity
Typically, vision statements are relatively brief – often just a single sentence and never more than a short paragraph. The vision statement does not provide specific targets. Notice that each of the above examples could apply to many different organizations. Instead, the vision is a broad description that provides a visual image of what the organization is trying to produce or become. It should inspire people and motivate them to want to be part of and contribute to the organization.
Mission Statements
While a firm’s vision statement is a general statement about its values, a firm’s mission statement is more specific. The mission statement takes the why of a vision statement and gives a broad description of how the firm will try to make its vision a reality.
A mission statement is still not exactly a strategy, but it focuses on describing the industry in which the company competes, the products a firm plans to offer, or the target markets it plans to serve. The vision and mission statements must support each other, but the mission statement is more specific. It defines how the organization will be different from other organizations in its industry. Organizational strategies should flow directly from the vision and mission, since the strategy is intended to achieve the vision and thus satisfy the organization’s mission.
Below are examples of mission statements from successful businesses.250 Mission Statement Examples from Businesses That Get It Right. (2014, May 12). Retrieved August 01, 2017, from http://yourbrandvox.com/blog/2014/5/12/business-mission-statement-examples Notice that each of these examples indicates where the organization will compete (what industry it is in) and how it will compete (what it will do to be different from other organizations).
- Adidas: We strive to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle.
- Amazon: We seek to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators.
- Google: To organize the world’s information and make it universally accessible and useful
- Honest Tea: To create and promote great-tasting, truly healthy, organic beverages
- Jet Blue Airways: To provide superior service in every aspect of our customer’s air travel experience
- The New York Times: To enhance society by creating, collecting and distributing high-quality news and information
The exhibit below shows examples of vision and mission statements for the Walt Disney Company and for Ikea. Notice that in both cases, the vision statement is very broad and is not something a business could use as a strategy because there’s simply not enough information to exhibit out what kind of business they might be. The mission statements, on the other hand, describe the products and services each company plans to offer and the customers each company plans to serve in order to fulfill their vision.
An interesting thing to note about vision and mission statements is that many companies confuse them, calling a very broad statement their mission. For example, Microsoft says that its mission is “to help people around the world realize their full potential.”3The Marketing Blender (2017). “Best Examples of Company Vision and Mission Statements.” http://www.themarketingblender.com/vision-mission-statements/ By the description above, this would be a good vision statement. However, Microsoft’s official vision statement is to “empower people through great software anytime, anyplace, and on any device.” Although the second statement is also quite broad, it does say how Microsoft wants to achieve the first statement, which makes it a better mission statement than vision statement.
Why are vision and mission statements important to a firm’s strategy for developing a competitive advantage? To put it simply, you can’t make a plan or strategy unless you know what you want to accomplish. Vision and mission statements together are the first building blocks in defining why a firm exists and in developing a plan to accomplish what the firm wants to accomplish.
Mission and vision both relate to an organization’s purpose and are typically communicated in some written form. Mission and vision are statements from the organization that answer questions about who we are, what do we value, and where we’re going. A study by the consulting firm Bain and Company reports that 90% of the 500 firms surveyed issue some form of mission and vision statements.4Bart, C. K., & Baetz, M. C. (1998). The relationship between mission statements and firm performance: An exploratory study. Journal of Management Studies, 35, 823–853. Moreover, firms with clearly communicated, widely understood, and collectively shared mission and vision have been shown to perform better than those without them, with the caveat that they related to effectiveness only when strategy and goals and objectives were aligned with them as well.5Bart, C. K., Bontis, N., & Taggar, S. (2001). A model of the impact of mission statements on firm performance. Management Decision, 39(1), 19–35.
Management 2020 text remixed from multiple sources under a CC Attribution-NonCommercial-ShareAlike 4.0 International License. View a complete list of original sources.
