Importance of Good Vision Statement, Price and Cost Leadership - Assignment Example

Strategic Planning Management Institution Name Question 1: a) Vision Statement The vision statement is lengthy and therefore less effective as it would make it difficult for managers to communicate. Employees would also find it difficult to remember. Vision statements tend to be less effective when they are too long or too short (Kantabutra & Avery, 2010, p. 38-40). Additionally, the vision statement is not clear. Indeed, the first sentence could have been more effective alone without the second one. In fact, the second sentence makes the goals of Company X difficult to understand and remember. The vision statement has no sense of abstraction since it speaks of the company’s goals too concretely. For instance, rather than state “The purpose of Company X is to earn money…,” the vision statement should conceptualize general ideas that would make the purpose of the company relevant to the stakeholders or employees. In return, they are more likely to feel like the company cares about their interests (Phanual & Darbi, 2012, p.96-108). While the vision statement serves its key purpose of stating Company X’s purpose, it should have avoided the overly general statements such as “The Purpose of Company X…” Additionally, it should have included the organization’s current and desired products and services and the impacts of these to the stakeholders. Use of motivational statements can also make it more inspirational. Further, the statement should have long-term visions, which are descriptive of the company's desired end-state into the near-term. It should also have described ongoing actions the company seeks to engage (Kantabutra & Avery, 2010, p.39-40). b) Why an organization should have a good Vision Statement? The vision statement provides organizations with a consistent sense of strategic direction, which in turn serves as the springboard for the company’s goals and mission. Technically, it may be difficult for the company to attain its vision in the long-term. However, the vision statement provides the strategic direction, energy and the needed stimulation to focus the team in achieving the vision. Ultimately, it serves as driving force that pulls the management towards the long-term organizational goals (Phanual & Darbi, 2012, p.96-100) The vision statement also inspires the company’s management to steer the organization towards the defined track. While doing this, it also guides the organization in generating and developing strategies. In the process, it has to render conventional wisdom concerning the organization’s potential and limitation. At the same time, it manages to avert feelings of doubt, frustration and pessimism that may materialize. In addition to giving the organization a moral content, the vision statement assists in describing, setting and clarifying company goals (Kantabutra & Avery, 2010, p. 98-100). The vision statement also facilitates organizational communication by influencing those receiving the communicated message to act in a desirable way. Additionally, the company’s management can use it to communicate their wishes to the stakeholders. The vision statement can also be applied in attracting people to certain organizational ventures as well as motivating them to support such ventures (Phanual & Darbi, 2012, p.96-108). The vision statement also enables organizations to bring the members of the organization together towards common objectives or aspirations of the organization. Effective organizational management can then rally the members of the organizations behind the commonly agreed courses of action and decisions (Phanual & Darbi, 2012, p.96-108). Question 3 Price and cost leadership BMW, short for Bayerische Motoren Werke, is a German automobile maker of luxurious car. The company has global operations and currently commands some 36 percent of the current automobile market share (Riege, 2009, p.13-18). The company is known for quality cars. Toyota is a Japanese car manufacturer with global operations. Toyota and BMW use different marketing strategies. Toyota uses cost leadership, where it markets its range of products as the most affordable in the market (Wong, 2011, p.1). On the other hand, BMW markets its products as the most high quality products in the market (Riege, 2009, p.13-18). Toyota uses low-cost, and has gained a reputation as the low-cost producer of automotives in the industry. The company attains its cost-leadership strategy through lean production. Toyota ensures that the costs of its cars are lower by investing in efficient-scale facilities, controlling overhead costs, and minimizing costs in operational areas, such as sales (Anwari et al., 2011, p. 1585-90). Effective implementation of these strategies enables Toyota to gain above-average returns regardless of the presence of strong competitive forces from BMW (Williams, 2005, p.16-20). Toyota uses a broader market scope that covers virtually all types of customers in the automotive marketplace (Wong, 2011, p.1). Their value chain ensures they produce cars for all kinds of customers seeking all price ranges (whether premium or low-end), thus enabling them to command a larger market. In contrast, BMW produces premium cars intended specifically for the luxury car market (Riege, 2009, p.13-18). BMW has gained reputation in the automotive industry for its superior quality and design. This has enabled the company to build a consistent strong brand image that paints a picture of quality in the minds of customers (Riege, 2009, p.13-18). Quite the opposite, Toyota has seen a large number of its car recalled (or returned by the buyers) due to issues of quality. This shows that the company does not place emphasis on quality (Wong, 2011, p.1). BMW’s brand strategies include investing heavily in product development. This is since the company has to consistently come up with innovative ideas to ensure that its products remain uniquely positioned as the mark of quality in the market. Both BMW and Toyota have, however, managed to make use of the value chain analysis in order to attain a bigger market share globally. For instance, BMW uses information systems to promote the value of its cars (Riege, 2009, p.13-18). The company has introduced a system that assist customers service their cars at least twice each year at no charge. To some considerable degree, Toyota has also managed to make use of value chain concept to promote its brand in the market globally. Conversely, Toyota became among the first companies to produce hybrid cars. An example includes the Toyota Prius model. Both companies also use online marketing and sales to advertise their products, suppliers and shops. For instance, BMW uses the Application Service Provider solutions that allow its headquarters to reach and share digital information with the company’s other branches or suppliers globally. This has elevated the value of the company in terms of innovativeness, as it would be expensive to travel across the company’s headquarters in order to pass information. BMW uses the Application Service Provider solution for this end (Benson, 2009). Question 3 Strategy implementation execution strategic management process difficulties To identify the difficulties in executing strategic management, understanding the entire strategic management is critical. The strategies pass through four phases: scanning the environmental, formulating strategies, implementing strategies and evaluating the strategies. The main reason why implementation of strategic management faces difficulties is since the management may lack the practice models that direct their actions during the implementation process. While lacking the required models, the management may be compelled to implement these strategies with scarce understanding of the range of factors that have to be addressed to ensure effective implementation of the strategy (Hrebiniak, 2008, p.1). Additionally, the fact that the planning and the implementation processes are mutually dependent complicates the process of executing strategic management. In essence, formulating strategies and implementing them are two distinct procedures, both of which are parts of the strategic management process. Rationally, implementing them requires formulation. Hence, implementing them becomes difficult (Pindelski & Mrówka, 2011, p.40-41). The process of executing strategic management also takes time. Successful implementation of the strategy may take more time than the time taken in formulating or planning the strategy. This may distract the management’s attention from the details of execution. The longer the timeframe of the execution, the more the probability of the managers’ attention get detracted. Hence, there is a need to set controls to ensure that feedback is provided and that the managers are kept abreast of the changes. At the same time, the implementation process should be both adaptive and dynamic, as well as respond to the unexpected events. Such imperative possess challenge to those executing the strategies (Hrebiniak, 2008, p.1). The implementation process involves multiple members of the organization. Since it often requires more people to take part in the process compared to the formulation process, it is susceptible to personal biases and attitudes. Additionally, organizational factors such as communication across different functions and departments may pose an additional challenge and time constraints ((Pindelski & Mrówka, 2011, p.41). At the same time, checking that processes across the organization are leveraged to support the strategy may also become a problem, particularly in large organizations or multinationals (Hrebiniak, 2008, p.1). Relating the objectives of the management strategy in question with the everyday objectives at varied levels of the organization may pose additional challenge. In actual fact, the larger the number of the individuals involved in implementing the strategy, the greater the level of challenges faced in effective implementation of the strategy. The fact that implementing the management strategy requires the participation and endorsement of managers across all hierarchical levels in the organization complicates the process. Indeed, an additional challenge is that a section of the top-level management may perceive strategic implementation as being below them, and which should better be left to the lower-level management or employees (Hrebiniak, 2008, p.1). For instance, one section of the managers may perform formulation and planning, before later handing the cue to the lower-level management to perform the execution. However, when things go out of proportion, the problem could be referred back to those who formulated the strategy, who may lack the needed expertise in implementing the strategy. References Anwari, A., Ismail, Y. & Hojjati, M. (2011). A Study on Total Quality Management and Lean Manufacturing: Through Lean Thinking Approach. World Applied Sciences Journal, Vol. 12 No. 19, pp1585-1596 Hrebiniak, L. (2008). Making Strategy Work: Overcoming the Obstacles to Effective Execution. Ivey Business Journal Kantabutra, S. & Avery, G. (2010). The power of vision: statements that resonate. Journal Of Business Strategy 31(1), 37-45 Phanual, W. & Darbi, K. (2012). Of Mission and Vision Statements and Their Potential Impact on Employee Behaviour and Attitudes: The Case of A Public But Profit-Oriented Tertiary Institution. International Journal of Business and Social Science 3(14), 96-108 Pindelski, M & Mrówka, R. (2011). Barriers Of Making Business Strategy Work. Business Systems And Economics 1(1), 38-50 Riege, A., (2009). Knowledge transfer between globally dispersed units at BMW. Journal of Knowledge Management, pp. 13-18 Williams, G., (2005). Modelling complexity in the automotive industry supply chain. Journal of Manufacturing Technology Management, pp.16-20 Wong, J. (2011.). Toyota Cuts Profit Forecast, Facing Currency and Flood Issues. Retrieved Read More