Analysing the Vision Statement and Identifying the Problem Areas - Assignment Example

Name: Instructor: Institution: Date: Question 1 A) Analysing the vision statement and identifying the problem areas The vision statement of company X has only focused on short term strategies. They have given the first priority to the profit making instead of giving the customers priority number one. For a company to flourish, the vision should focus on quality products and services to the consumers. Though it has provided the direction on how the shareholders in future will gain return on capital, the vision of company X has not put inspiration as well as the direction they will take to meet their strategies. The other problem area in the vision of company X is that it has not stated the company’s desired size and size. It has also failed to mention the sphere of influence in future rather than it currently exists. This is a clear indication that the vision does not entail the long term strategies on their vision. Long term strategies are very important in any company willing to expand from where it is in that it elucidates the long term reason of its existence. A company which has long term strategies on its mission also encourages shareholders to increase their shares in the company because they will believe the company will have a better future (Matthews, 2005). The other problem area in the vision statement of company X is that it has not stated anything that makes it unique from its competitors or even the key measure of success. It has also been written in future tens meaning the present is totally different. It has speculated rather than planning the way it will ensure its shareholders increase return on invested capital hence, it does not evoke emotions or is just passionless. The vision statement of company X can be improved by writing it in present tense to ensure that the company is currently in a stable condition and has a bright future. This vision is long and not powerful and is not specific; hence, it can be used by any company. It can also be improved by making it broad and should specify how it is planning to help the customers currently and in future. It should use generic phrase and remain broad in nature. B) Importance of an organization having good vision statement A clear and effective vision has many advantages to the company and delivers many benefits. A clear defined vision of a company helps to define the values of the company and employees. It also helps to help the behaviour of all the employees working in the company. A good vision also helps to improve efficiency and productivity. A good communicated vision will enhance the company to buy-in from all the employees by creating a shared sense of shared vision that will make the company to discover the reimbursement associated with a strong sense of vision. Vision is also the first step in both long term and short term strategic planning (Matthews, 2005). Having a common vision helps the members of the organization to set goals thus empowering employees. Question 2 Both long term and short term strategies are very important in a company. There are different types of strategies employed by different companies to carry out their businesses globally. A good example of a company which carry out differentiation strategy is the American express which is concerned with travel activities. Experience from different companies across the world indicates that differentiation can be achieved in varied ways. With differentiation strategy, the product usually incorporates innovative design or may be sold and gets serviced in unique ways. As a matter of fact, consumers will pay a higher price provided the product offers distinctive Products from the other competitors in the same field. The differentiation strategy results in a higher profitability in cases where the price premium exceeds the costs of distinguishing the product or the service from the others. The other form of strategy used by companies is low-cost leadership strategies. A good example of a company that applies this form of strategy is Samsung. This king of strategy locates leverage in every possible source of cost advantage in the company’s value chain activities. The low-cost advantage is the main thing the company using this strategy aims but the low cost cannot be sustainable without continuous improvement in the ongoing searches (Matthews, 2005). This is normally achieved by improving the process yield of the products as well as service delivery. This is what Samsung uses to topple other companies like sonny Ericson in terms of winning the customers. Whereas American express seek to design and produce unique services to the customers, Samsung on the other hand put more efforts on strong relationship that exists in the market share and high profitability. Though both are in a competitive environment, Samsung is more concerned with the cost of the products unlike the American express which puts more emphasis on producing unique services for example selling their tickets online and offering food for free to their customers in their flights. Samsung transports their products to the retailers without adding the cost of supply to avoid retailers from giving the burden of inbound logistics to the consumers. This has helped them to sell their quality products at a faire price to the final consumer. The value added activities are very minimal to the customers of American express which employs differentiation strategy. The cost of the information flows are left to the company which is accomplished through advertisement. The customers of the American express are therefore given low cost burden of value added activities which include supplies unlike Samsung which employs the low-cost leadership strategy and leaves their customers to carry out the burden of both inbound and outbound logistics. The customers of Samsung enjoys after sells services unlike those of American express which do not enjoy any services related to after sells. The prices for Samsung and all the other firms that practice low-cost leadership are kept stable for a very long period of time to ensure that the other firms operating in the same industry maintain profitability. On the other hand, firms like American express which practice differentiation strategy varies their prices without much care on the other firms working in the same industry. Question 3 A) Value chain activities of both Coles and Burnings These two organizations works for the parent company known as Westfarmer’s limited. Cole for example has improved its earnings due to return on capital. This is because Cole as a firm uses a strategy of investing the savings arising from efficiencies into the lower prices. On the other hand, it improves the quality and services they offer to its customers thus expanding the customer’s transactions and the basket size. Burning earnings also increases due to its well planed value chain. This has ensured good results due to its good respond from the customers to the current investment in value and the greater range of services offered to the customers. The strategies used in these two firm’s gained attraction in the recent past. The earnings growth in both firm’s were boosted by minimized operational complexity as well as lower costs of carrying out business. Both of them also enjoyed the rise resulting from the strategy of lowering the prices on the everday items affecting all the families. B) Using value chain concept The competitive position of these two firms will improve over the other companies because they will win the customers trust on the common products which a family cannot stay without. A good example is where Burnings growth was strengthened by improvements in merchandising and strong focus on efficiency. Disciplined risk selection on commercial lines also improves the competitive position of these two firms because consumers want assurance of the products they buy in the market. The combined organizations would work better in the competition that exists in the industry because their combined efforts in cutting the prices of their products will make them the best in the market. Cutting the prices as a strategy by the combine effort of both the firms can cause obstacles to the other competitors. The diversified strategies used by these two firms and clearly understood by the interested competitors in the firm act as a barrier to the entry. A good example is where Cole dominates the supply chains in the supermarket as well as in the office work thus, becoming the lowest cost producer of the supply of food staffs and other retail materials like clothes. The strategies combined based on high quality may in some points increase the potential market share that a firm can achieve in a competitive environment. Research indicates that combined strategies based on quality of the products increases their market share thus biting their competitors. High quality of products leads to high demand because of referrals among customers. It also makes the entrants of the new investors very difficult because such market requires branding for them to be trusted by the consumers. The diversification strategy involving Coles and Burnings will improve the competitive position in the market by protecting new entrants hence combined organizations work smartly. Reference Matthews, J. R. (2005). Strategic planning and management for library managers. Westport (Connecticut: Libraries. Read More