VISION AND
MISSION SHOULD DRIVE STRATEGY
The chart below demonstrates the approach for
developing a successful marketing strategy. The graphic suggests that a vision
and mission should drive the price, place product and promotion marketing
components and that once these 4 Ps are identified a strategy can be developed.
It is interesting to ask which of the 4 P’s is most
important. To determine value of each of the four Ps requires a
vision and mission statement that clearly defines the nature of a business, the
market segment to be served and an idea of what success looks like.
For my classes at the University of Houston’s Bauer
College of Business I have used the example of an individual with a pressure
washer and limited funds wishing to enter into the maintenance business and
grow to be a major player in home and commercial maintenance.
This individual might create a vision statement
that as follows: 1) To make available quality exterior maintenance
service to home and business clients throughout the state of Texas, and 2)
Create value and make a difference.
The mission statement might be as follows: 1) Using
internal cash flows to develop an organization that provides exceptional
quality service at reasonable rates, 2) Create a network of technology and
industrial partners to provide innovative and effective solutions for exterior
building maintenance, 3) Develop an organization that is highly effective, lean
and fast moving and 4) Maximize financial returns.
This vision and mission statement would help
determine how the components of marketing would fit together to develop a
marketing strategy. Since we know that it is to be a self-financed operation
and that the only service now available is pressure washing, identifying the
market that can be served now is important. The potential customers are those
that need pressure washing but can’t afford or don’t want the services of
well-established exterior maintenance companies.
After some consideration a strategy statement might
be developed. In this case the marketing strategy statement might be: To market
convenient, low price pressure washing service to individual home and small
business owners while adding services and markets as cash flow allows.
In this case product does not define what the business
vision is for the long term. Here the Ps requiring attention will be promotion
to efficiently let potential customers know of the service available. The place
P will also be important in that the service should be offered only in areas
that can be served with existing personnel and equipment.
It is with the vision and mission driven strategy
that the Planning, Organizing, Directing and Controlling components of
management can be employed. At this point strategy directs the development of
the tactics that are in alignment with the vision and mission.
Planning would start with available resources and
describe the process to grow from a single pressure washer driven organization
to a statewide organization providing services to a large base of customers.
The plan would describe the growth rate based on reasonable customer base
growth and new services to be offered. The planning would consider the type of
work force to deliver the service (brokered, through other providers,
independent contractors, employees and so on).
The plan would describe the internal cash flows and
the amount of cash to be used to maintain and grow the business. It would also
describe approaches to increase cash flows, incur debt or invite equity
partners into the business.
The plan would also describe the whether the types
of equipment needed, when it would be needed and if it should be leased or
purchased. Finally, the planning process would indentify the methods by which
the company would be managed from sales approaches to accounting procedures
from quality control to credit management and job logistics.
After the plan is developed and compared with the
vision, mission and strategy the business can set the organizational structure,
understand how to direct activities and create reports that allow management to
gauge how closely actual results measure against planned goals.
This is a simple example but shows the importance
of understanding what an organization wishes to do (vision/mission and
strategy) before developing tactics.
I recently visited with a young entrepreneur who
had a small business that was seasonal. This entrepreneur also had a pretty
clear idea of what he would like his business to grow to over time.
Faced with the need to fill in the off-season business
cycles he thought he would provide other types of seasonal businesses. While it
was a reasonable approach the seasonal business would not move his company
toward the ultimate goal he had set for the business. I advised that
using an approach of filling available work time with work that didn’t support
the long-term goals of the business could change the focus and perhaps prevent
the attainment of the long-term goal.
Young entrepreneurs aren’t the only people facing
this dilemma. Seasoned CEOs find themselves faced with challenges and
responding to market changes and competitors in ways that are not in keeping
with the organizations mission and vision. These CEOs are usually driven by
short-term profit requirements and analyst’s expectations.
It can be difficult to always go back to check to
see if the latest tactics being implemented to address a business challenge
support the firm’s mission and vision. It is more difficult to require that
mid-level managers spread across many operating units only implement tactical
solutions that are in keeping with the firm’s overall mission and vision driven
strategy.
By not insuring implemented tactics are in
alignment with a mission and vision driven strategy is the surest way for an
organization to find itself in an unintended business, producing value for
unintended markets. This can spell financial ruin in the worst case and in the
best of cases it will require a change in the mission and vision statement and
direction of the business.
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