MGT603 assignment no.1

Assignment # 1 (20 marks)

Suppose, you are the owner of ‘Khaalis Foods Ltd’, a new company
planning to produce dairy products.

A) You are required to develop a Mission Statement for your
company that must include the following nine components:

• Customers

• Products or services

• Markets

• Technology

• Survival, growth, and profitability

• Philosophy

• Self-Concept

• Concern for public image

• Concern for employees

B) Explain whether the Mission Statement (developed by you in the
first part of this assignment) supports ‘Customer Orientation’
or not. Give reasons to justify your answer.

Solution Material:
good mission statement reflects the anticipations of customers.Rather than developing a product and then trying to find a market,the operating philosophy of organizations should be to identifycustomers’ needs and then provide a product or service to fulfillthose needs. Good mission statements identify the utility of afirm’s products to its customers. This is the way AT&T’s missionstatement focuses on communication rather than telephones andONGC’s mission statement focuses on energy rather than oil andgas.
The following utility statements are highly relevant indeveloping a mission statement:
1) Do not offer me things.
2) Do not offer me clothes. Offer me attractive looks.
3) Do not offer me shoes. Offer me comfort for my feet and thepleasure of walking.
4) Do not offer me a house. Offer me security comfort and a placethat is clean and happy.
5) Do not offer me books. Offer me hours of pleasure an thebenefits of knowledge.
6) Do not offer me records. Offer me leisure and the sound ofmusic.
7) Do not offer me tools. Offer me the benefits and the pleasure ofmaking beautiful things.
8) Do not offer me furniture. Offer me comfort and the quietnessof a cozy place.
9) Do not offer me things. Offer me ideas, emotions, ambiencefeelings and benefits.
A major reason for developing a business mission is to attractcustomers who give meaning to an organization. A classic description of the purpose of a business reveals the relativeimportance of customers in a statement of mission.It is the customer who determines what a business is. It is thecustomer alone whose willingness to pay for a good or serviceconverts economic resources into wealth and things into goods.What a business thinks it produces is not of first importance,especially not to the future of the business and to its success.What the customer thinks he/she is buying what he/she considersvalue is decisive – it determines what a business is, what itproduces, and whether it will prosper. And what the customerbuys and considers value is never a product. It is always utility,meaning what a product or services does for him. The customer isthe foundation of a business and keeps it in existence (Drucker).Components of a mission statementA good mission statement reveals an organization’s customers,products or services markets technology concern for survivalphilosophy, self concept, concern for public image and concern fremployees .
These nine basics components serve as a practicalframework for evaluating and writing mission statements (David)
1) Customers: who are the firm’s customers?
2) Products or service: What are the firm’s major products orservices?
3) Markets: Geographically where does the firm compete?
4) Technology: is the firm technologically current?
5) Concern for survival, growth and profitability. Is the firmcommitted to growth and financial soundness?
6) Philosophy: What are the basic beliefs, values, aspirations andethical priorities of the firm?
7) Self concept: What is the firm’s distinctive competence or major
competitive advantage?
8) Concern for public image: Is the firm responsive to socialcommunity and environmental concerns?
9) Concern for employees: Are employees a valuable asset of thefirm?
Business DefinitionA business definition is a clear statement of the business the firmis engaged in or is planning to enter. It answers the question:What is our business, in a precise way . Consider the statements:We are in the beauty enriching business (Helen and Curtis) Weare in the business of computer technology (Intel) We are watchmakers to the nation (HMT) , we are in the transportationbusiness (TELCO) . These statements define the space that thebusiness wants to create for itself in a competitive terrain. Theybroadly specify the opportunities that the business may exploitwithin that space and the threats it may encounter from rival firmsin course of time, Of course the firm , has to define its business ina broad way keeping changing customer tastes and aspirations inmind.D F Abell suggested defining business along three dimensions:customers groups (who is being satisfied), customer needs (whatis being satisfied) and alternatives technologies (how the need isbeing satisfied).