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What is strategy formulation? Explain your answer alongside a discussion of mission, vision and objectives of a local/ international company.
Sample Answer
Understanding Strategy Formulation: Mission, Vision, and Objectives
Strategy formulation is the process of defining an organization’s direction and making decisions on how to allocate resources to pursue its objectives. It involves analyzing the internal and external environment, setting goals, and developing strategic plans to achieve sustainable competitive advantage.
Mission Statement
A mission statement articulates the purpose of an organization, its core values, and the primary stakeholders it aims to serve. It answers the question, “Why does the organization exist?” A local example is Starbucks, whose mission is “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.” This statement reflects Starbucks’ commitment to community engagement and customer experience.
An international example is Google, whose mission is “to organize the world’s information and make it universally accessible and useful.” Google’s mission underscores its focus on innovation, information accessibility, and global impact.
Vision Statement
A vision statement outlines the future state that an organization aspires to achieve. It describes the desired long-term goals and objectives. A local example is Nike, whose vision is “to bring inspiration and innovation to every athlete* in the world.” Nike’s vision emphasizes innovation, inclusivity, and global reach.
An international example is Tesla, whose vision is “to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.” Tesla’s vision highlights environmental sustainability, technological advancement, and industry leadership.
Objectives
Objectives are specific, measurable targets that guide an organization’s strategic initiatives and performance evaluation. They provide a roadmap for achieving the mission and vision. A local company like a family-owned restaurant may set objectives to increase customer satisfaction by 20% within a year and expand its online presence through social media marketing.
An international company like Apple may set objectives to launch a new product line, increase market share in emerging markets by 15%, and enhance sustainability practices in its supply chain by partnering with green suppliers.
In conclusion, strategy formulation involves crafting a clear mission statement that defines organizational purpose, a compelling vision statement that outlines future aspirations, and specific objectives that drive strategic decision-making and performance evaluation. By aligning mission, vision, and objectives, local and international companies can establish a strategic framework that guides their actions, inspires stakeholders, and drives sustainable growth and success in a dynamic business environment.
