Part Two- Strategy Formulation

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 Chapter Two

Crafting Business Vision

and Mission

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“ If you don’t know where you’re going, any
path will get you there.”

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Strategy formulation --

–Strategic planning or long-range planning

(Develops mission, objectives, strategies,
policies)

Or
–process of finding a strategic fit between external
opportunities and internal strengths while
working around external threats and internal
weaknesses

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 Strategic Planning –
What is this?
• The “big picture” of what your agency is doing
and where it is going
• Helps determine where your organization is
going over the next year or more
• Why is this important?
Takes you outside the day-to-day activities of your organization or
project and helps give you clarity about what you actually want to
achieve and how to go about achieving it rather than a plan of
action for day-to-day operations.

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 Model of Rational Strategic Planning model

Basic Strategic Planning Model

Defining the Mission and Setting Top-Level Goals

External Analysis of Opportunities and Threats

Internal Analysis of Strengths and Weaknesses

Selection of Appropriate Strategies

Implementation of Chosen Strategies

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 Components of a Strategic Plan

• Vision – Developing a clear understanding of what is your preferred

future

• Mission – Developing a sound statement about why you exist

• Core Values and Beliefs – Describes behaviors and
ideas that are important to your organization

• Strategic Issues – The issues that create a gap between the

ideal and reality

• Operational Plans – How are you going to achieve your

vision?

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 Vision Statements

 Developing a vision statement is often considered

the first step in strategic planning, preceding even
development of a mission statement (R. David)
(As per Norton and Kaplan mission precede vision)
 Many vision statements are a single sentence.

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 Vision
 An organization’s vision describes what the
organization hopes to become in the future.
 Well-constructed visions clearly articulate an
organization’s aspirations.

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 Effective leadership and vision

Effective leadership and vision are closely

related:
– Thus, leaders must be forward looking and clarify
the direction in which the organization to move.

– Managers who do not develop into strong leaders do

not develop a clear vision-instead, they focus on
routine tasks.

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 Effective leadership…
Visionary leaders:
• Have thoughts that others do not have
• Are extraordinary-no focus on routine activities
• Are forward looking and clarify the direction in which they want
their organization move
• Are exemplary in order to employees embrace the vision
• Ensure the success of the vision based on organizational strengths
• Develop further the corporate vision considering internal &
external changes etc.

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 Benefits of Vision
• It empowers people and focuses their efforts
• It focuses energy for greater effectiveness
• It raises the standard of excellence
• It establishes meaning for today
• It gives hope for the future
• It brings unity to community
• It provides a sense of continuity
• It raises commitment level
• It brings positive change

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 VISION
Vision without Action is a Daydream
Action without Vision is a Nightmare
• Not Optional
• Stretch – 30+ Years
• 8-10 Words in length
• Future State
• Brief and Memorable
• Inspiring and Challenging
• Descriptive of the Ideal

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 Examples of Vision Statements
The Vision of Ethiopia
“To see Ethiopia a country where democratic
rule, good-governance and social justice reigns,
upon the involvement and free will of its
peoples; and once extricating itself from
poverty becomes a middle-income economy.”

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 Examples of Vision…

CBE’s VISION
• To become a world-class commercial bank by
the year 2025.

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 Examples of Vision…
EEPCo's Vision
• To be a center of excellence in providing
quality electric service at every ones door and
being competitive export industry.

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 Examples of Vision…
ETC’s Vision:
• To be a world-class telecommunications
service provider

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 Examples of Vision…
Ethiopian Airlines Vision

To become the most competitive and leading

aviation group in Africa by providing safe,
market driven and customer focused passenger
and cargo transport, aviation training, flight
catering, MRO and ground services by 2025.

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Mission Statement

Mission address the basic question that

faces all strategist “What is our
business?”

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 Mission Statements

•Enduring statement of purpose

•Distinguishes one firm from another
•Declares the firm’s reason for being
•Identify the scope firm’s operation in product and market
terms

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 Mission
– Mission is the fundamental purpose of the organization
and its scope of operation.
– Organizations mission is written in terms of the general set
of products and services the organization provides and the
markets and clients it serves.
• Mission serves to ensure unanimity of purpose, facilitates
the translation of goals and objectives.

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Functions of Mission

Benefits from a strong mission

Unanimity of Purpose

Resource Allocation
Mission
Organizational Climate

Focal point for work

structure

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 Characteristics of a Mission Statement
• A clear mission statement describes the values and priorities of an
organization.
• Developing a mission statement compels strategists to think about
the nature and scope of present operations and to assess the
potential attractiveness of future markets and activities.
• A mission statement broadly charts the future direction of an
organization.
• A mission statement is a constant reminder to its employees of
why the organization exists and what the founders envisioned
when they put their fame and fortune at risk to breathe life into
their dreams.

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 Products
Services Markets
Customers

Technology

Employees
Mission
Elements

Survival
Growth
Profit
Public
Image
Self-Concept Philosophy

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Social Policy & Mission

Social policy should be integrated in all

strategic-management activities

Mission should convey the social responsibility

of the firm

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 Examples of Mission
EEPCo's Mission
• To provide adequate and quality electricity
generation, transmission, distribution and sales
services, through continuous improvement of
utility management practices responsive to the
socio- economic development and
environmental protection need of the public.

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 Examples of Mission
ETC’s Mission
 Connect every Ethiopian through Information Communication Technology.
Build its managerial capability that enables ethio telecom to operate in an international
standard
 Provide telecommunication services and products that enhance the development of our
Nation
 Build reputable brand known for its customers' consideration.
 Provide telecommunication services and products that enhance the development of our
Nation

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 Examples of Mission
Ethiopian Airlines Mission
• To become the leading Aviation group in Africa by providing safe and reliable
passenger and cargo air transport, Aviation Training, Flight Catering, MRO and
Ground Services whose quality and price “value proposition” is always better than its
competitors,
• To ensure being an airline of choice to its customers, employer of choice to its
employees and an investment of choice to its Owner,
• To contribute positively to socio economic development of Ethiopia in particular and
the countries to which it operates in general by undertaking its corporate social
responsibilities and providing vital global air connectivity,

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 Examples of Mission
CBE’s MISSION
• We are committed to best realize stakeholders' needs through
enhanced financial intermediation globally and supporting national
development priorities, by deploying highly motivated, skilled and
disciplined employees as well as state-of-the-art technology. We
strongly believe that winning the public confidence is the basis of
our success.

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 Vision VS Mission
About - Essence
• Mission:
Mission A Mission statement talks about HOW you will
get to where you want to be. Defines the purpose and
primary objectives related to your customer needs and
team values.
• Vision:
Vision A Vision statement outlines WHERE you want
to be. Communicates both the purpose and values of
your business.

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 Vision VS Mission

Time
• A mission statement talks about the present
leading to its future.
• A vision statement talks about your future.

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 Vision VS Mission
Function
• Mission: It lists the broad goals for which the organization is
formed. Its prime function is internal; to define the key measure or
measures of the organization's success and its prime audience is
the leadership, team and stockholders.
• Vision: It lists where you see yourself some years from now. It
inspires you to give your best. It shapes your understanding of why
you are working here.

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 Vision VS Mission
Change
• Mission: Your mission statement may change, but it
should still tie back to your core values, customer needs
and vision.
• Vision: As your organization evolves, you might feel
tempted to change your vision. However, mission or
vision statements explain your organization's foundation,
so change should be kept to a minimum.

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 Vision VS Mission
Developing a statement
• Mission: What do we do today? For whom do we do it?
What is the benefit? In other words, Why we do what we
do? What, For Whom and Why?
• Vision: Where do we want to be going forward? When
do we want to reach that stage? How do we want to do it?

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 Vision VS Mission
Features of an effective statement
• Mission: Purpose and values of the organization: Who are the
organization's primary "clients" (stakeholders)? What are the
responsibilities of the organization towards the clients?
• Vision: Clarity and lack of ambiguity: Describing a bright
future (hope); Memorable and engaging expression; realistic
aspirations, achievable; alignment with organizational values
and culture.

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 Values
• Every organization should be guided by a set of values.
• Values are beliefs which your organization's members
hold in common and endeavor to put into practice.
• The values guide your organization's members in
performing their work. Specifically, you should ask,
"What are the basic beliefs that we share as an
organization?"

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 Values
• Values are often rooted in ethical themes, such as
honesty, trust, integrity, respect, fairness, etc.
• Values should be applicable across the entire
organization
• Values may be appropriate for certain best management
practices – best in terms of quality, exceptional customer
service, etc.

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 Values
• Examples of values include: a commitment to excellent
services, innovation, diversity, creativity, honesty,
integrity, and so on.
• By developing a written statement of the values of the
organization, group members have a chance to
contribute to the articulation of these values, as well as
to evaluate how well their personal values and
motivation match those of the organization.

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 Goals and Objectives
• The strategic goal setting involves:
– Translating the mission statement into concrete
terms
– Establishing the statement of desired outcomes
– Define the benefits to be gained

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 Goals
• Goals are perceived as broad statements of the end results
• A goal is an open ended statement of what one wants to
accomplish, with no quantification of what is to be achieved and
no time criteria for completion.
Examples of goals are:
 HR: cut absenteeism
 Finance: reduce bad debts
 Marketing: increase sales levels
 Production: cut production costs, etc.

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 Objectives
Objectives:
• Objectives amplify the set goals with quantitative
terms-considered as specific and tangible ones
• Performance targets should be:
• Concrete
• Measurable
• Time framed
• Achievable
• Periodically reviewed

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 Objectives…
– Setting objectives means converting the strategic vision
and business mission into specific performance
outcomes the organization wants to achieve.
E.g : to increase sales 4%–6% each year/ increase the
profit margins from around 10% in 2008 to the mid-tens
by 2011, …

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 Objectives
• Objectives are the end results of planned activity.
• They should be stated as action verbs and tell what is to
be accomplished by when and quantified if possible
• The achievement of corporate objectives should result in
the fulfillment of a corporation’s mission

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 Goals Vs Objectives
Goals Objectives

Goals are broad Objectives are narrow

Goals are general intentions Objectives are precise

Goals are abstract Objectives are concrete.

Goals are generally difficult to Objectives are measurable

measure
Long time frame Short term frame

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Goals and Objectives
- Use the SMART Test

S – Specific
M – Measurable
A – Attainable
R – Relevant
T – Time-Based

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 Steps of a Strategic Plan
• Where is your agency in its development
RIGHT now?
• Assess the Internal and External
Environments
– SWOT Analysis

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THANK YOU!!

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