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BUS 411
Day 3
Copyright 2005 Prentice Hall
1
Agenda
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Assignment # 1 due next class
Discussion of Krispy Kreme Cohesion Case
Discussion on Business Mission and Vision
Copyright 2005 Prentice Hall
Ch 2 -2
Krispy Kreme
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Key issues
Finances (page 36-38)
 Income Statement
 Segmented revenues and expenses
 Balance Sheet
Market place
Strategic planning
 Mission & vision ??
 SWOT
 What should they do.
Resources
 http://www.krispykreme.com/
 http://www.umfk.maine.edu/infoserv/library/
Copyright 2005 Prentice Hall
Ch 2 -3
Strengths
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9.
Strong brand recognition and recall
Brand equity
Wide appeal of signature glazed doughnuts
Vertical integration
Development in international markets
Strong channel of distribution
Quality of product
Expanded assortment of offerings at KKD stores
including beverages
Doughnut machine technology
Copyright 2005 Prentice Hall
Ch 2 -4
Weaknesses
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Perishability of product
Limited product line (heavy reliance on
doughnut sales)
Overextended (i.e., Montana Mills
acquisition)
Lack of locations in some areas
Pricing in some locations
Copyright 2005 Prentice Hall
Ch 2 -5
Opportunities
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Increasing popularity of coffee shops and bakery cafés
Popularity of American foods and fashion in overseas markets
Growth in two-income households
Americans continue to experience time-starvation
Entertaining opportunities moving from home to work
environment
Technological advancements (i.e., paperless ordering,
predictive modeling software, hand held computers for delivery
drivers)
Channel expansion possibilities (i.e., Internet pre-ordering)
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Ch 2 -6
Threats
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Dunkin Donuts and Starbucks
Low-carb trend in eating preferences
All-natural, organic, healthy eating trends
Cultural differences in breakfast and snack foods
Consumption of doughnuts in mornings rather than
as an all day snack or meal
Requirements for increased accessibility of
nutritional information
Increase in eating at full-service restaurants
combined with a decrease in the use of fast-food
restaurants
Copyright 2005 Prentice Hall
Ch 2 -7
Chapter 2
The Business Vision & Mission
Strategic Management:
Concepts & Cases
10th Edition
Fred David
PowerPoint Slides by
Anthony F. Chelte
Western New England College
Copyright 2005 Prentice Hall
Ch 2 -8
Chapter Outline
What do we want to become?
What is our business?
Importance of Vision and Mission Statements
Copyright 2005 Prentice Hall
Ch 2 -9
Chapter Outline (cont’d)
Characteristics of a mission statement
Components of a mission statement
Writing & evaluating mission statements
Copyright 2005 Prentice Hall
Ch 2 -10
Vision
“The last thing IBM needs right now is a
vision.” (July 1993)
What IBM needs most right now is a
vision.” (March 1996)
-- Louis V. Gerstner, Jr., CEO, IBM Corporation
Copyright 2005 Prentice Hall
Ch 2 -11
Vision
Agreement on the basic vision for which the
firm strives to achieve in the long run is
critically important to the firm’s success.
Copyright 2005 Prentice Hall
Ch 2 -12
Vision
“What do we want to become?”
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Ch 2 -13
Vision
Clear Business
Vision
Comprehensive
Mission Statement
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Ch 2 -14
Vision & Mission
Shared Vision -Creates commonality of interests
 Reduce daily monotony
 Provides opportunity & challenge
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Resource
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http://www.csuchico.edu/mgmt/strategy/module1/sld007.htm
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Ch 2 -15
Vision Statement Examples
A national organization which represents its
members in all aspects of poultry and eggs
on both a national and international level.
-- U.S. Poultry & Egg Association
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Ch 2 -16
Vision Statement Examples
The Vision of Manley Baptist Church is to be
the people of God, on mission with God,
motivated by a love for God, and a love for
others.
-- Manley Baptist Church
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Ch 2 -17
Vision Statement Examples
The Vision of USGS is to be a world leader in
the natural sciences through our scientific
excellence and responsiveness to society’s
needs.
-- U.S. Geological Survey (USGS)
Copyright 2005 Prentice Hall
Ch 2 -18
Vision Statement Examples
To be the first choice in the printed
communications business. The first choice is
the best choice, and being the best is what
Atlanta Web pledges to work hard at being—
every day!
-- Atlanta Web Printers, Inc.
Copyright 2005 Prentice Hall
Ch 2 -19
Vision Statement Examples
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The University of Maine at Fort Kent is a quality small public institution, with a
curriculum tightly focused on undergraduate education in the traditions of the liberal
arts and sciences. The university will select academic and professional programs of
the highest quality, which respond to the needs of northern Maine and which build
upon the region's unique culture and rural environment. The university will be
recognized nationally and regionally as the education and outreach partner of choice.
We Are Committed to:
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A legacy of preparing quality teachers
High quality affordable and accessible education
Programs which foster a sense of community
Technically advanced academic and distance learning environments
Development of distinct rural-based identity and curriculum
Expanded rural research and development activities
Study and interaction with Maine's wilderness environments
Development of graduate program initiatives
Expanded outreach activities
A fully developed student life program that supports educational development
Student preparation to meet the changing need of society
Active community membership and cultural enrichment
The University of Maine at Fort Kent seeks to become the best small
university within the University of Maine System and beyond.
UMFK
Copyright 2005 Prentice Hall
Ch 2 -20
Vision statement examples
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The mission and vision of Rainbow Cove, LLC is to
develop the properties owned on big Madawaska
Lake, Maine into several profitable business
ventures that satisfy the following four requirements;
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Benefit the economic condition of Northern Maine
Preserve the unique Swedish cultural heritage of the Big
Madawaska Lake region
Foster an appreciation for the natural beauty of Northern
Maine
Promote environmentally sound, four-season outdoor
recreational activities
Copyright 2005 Prentice Hall
Ch 2 -21
BUS 411
Day 4
Copyright 2005 Prentice Hall
22
Agenda
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Assignment # 1 due
Finish Discussion on Business Mission and
Vision
Copyright 2005 Prentice Hall
Ch 2 -23
Mission Statements
-- 90% of all companies have used a
mission statement in the previous five
years.
Copyright 2005 Prentice Hall
Ch 2 -24
Mission Statement
“What is our business?”
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Ch 2 -25
Mission Statements
•Enduring statement of purpose
•Distinguishes one firm from another
•Declares the firm’s reason for being
Copyright 2005 Prentice Hall
Ch 2 -26
Mission Statements
Also referred to as:
•Creed statement
•Statement of purpose
•Statement of philosophy
•Statement of business principles
Copyright 2005 Prentice Hall
Ch 2 -27
Mission Statements
Reveal what an organization wants to be
and whom it wants to serve
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Ch 2 -28
Mission Statements
Essential for effectively establishing
objectives and formulating strategies.
Copyright 2005 Prentice Hall
Ch 2 -29
Vision & Mission
Many organizations develop both
vision & mission statements.
Copyright 2005 Prentice Hall
Ch 2 -30
Vision & Mission
Profit & vision are necessary to effectively
motivate a workforce
Copyright 2005 Prentice Hall
Ch 2 -31
Vision & Mission
Shared vision creates a community of
interests
Copyright 2005 Prentice Hall
Ch 2 -32
Developing Vision & Mission
Clear mission is needed before alternative
strategies can be formulated and
implemented
Copyright 2005 Prentice Hall
Ch 2 -33
Developing Vision & Mission
Participation from diverse managers is
important in developing the mission.
Copyright 2005 Prentice Hall
Ch 2 -34
Mission Statement Examples
It is the California Energy Commission’s
mission to assess, advocate, and act to
through public/private partnerships to improve
energy systems that promote a strong
economy and healthy environment
-- California Energy Commission
Copyright 2005 Prentice Hall
Ch 2 -35
Mission Statement Examples
The Bellevue Hospital, with respect,
compassion, integrity, and courage, honors the
individuality and confidentiality of our patients,
employees, and community, and is progressive
in anticipating and providing future health care
services.
-- The Bellevue Hospital
Copyright 2005 Prentice Hall
Ch 2 -36
Mission Statement Examples
John Deere has grown and prospered through
a long-standing partnership with the world’s
most productive farmers. Today, John Deere is
a global company with several equipment
operations and complementary service
businesses. These businesses are closely
interrelated, providing the company with
significant growth opportunities and other
synergistic benefits.
-- John Deere, Inc.
Copyright 2005 Prentice Hall
Ch 2 -37
Importance of Mission
Benefits from a strong mission
Unanimity of Purpose
Resource Allocation
Mission
Organizational Climate
Focal point for work
structure
Copyright 2005 Prentice Hall
Ch 2 -38
Effective Missions
Broad in scope
Generate strategic
alternatives
Not overly specific
Reconciles interests among
diverse stakeholders
Finely balanced between
specificity & generality
Copyright 2005 Prentice Hall
Ch 2 -39
Effective Missions
Arouse positive feelings &
emotions
Motivate readers to action
Generate favorable
impression of the firm
Copyright 2005 Prentice Hall
Ch 2 -40
Effective Missions
Reflect future growth
Provide criteria for strategy
selection
Basis for generating &
evaluating strategic options
Are dynamic in nature
Copyright 2005 Prentice Hall
Ch 2 -41
Mission & Customer
Orientation – Vern McGinnis
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Define what the organization is
Define what it aspires to be
Limited to exclude some ventures
Broad enough to allow for growth
Distinguishes firm from all others
Stated clearly – understood by all
Copyright 2005 Prentice Hall
Ch 2 -42
Mission & Customer
Orientation
An Effective Mission Statement -
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Anticipates customer needs
Identifies customer needs
Provides product/service to satisfy needs
Copyright 2005 Prentice Hall
Ch 2 -43
Mission & Customer Orientation
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Customer manifesto (page 60)
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Do not offer me things
Do not offer me clothes, offer me attractive looks
Do not offer me shoes, Offer me comfort for my feet and
the pleasure of walking
Do not offer me a house, offer me security, comfort, and a
place that is clean and happy
Do not offer me books, Offer me hours of pleasure and the
benefit of knowledge
Do not offer me things, Offer me ideas, emotions,
ambience, feelings, and benefits.
Please, do not offer me things
Copyright 2005 Prentice Hall
Ch 2 -44
Social Policy & Mission
Managerial philosophy shapes social policy -
Affects development of vision & mission
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Responsibilities to –
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Consumers
Environmentalists
Minorities
Communities
Copyright 2005 Prentice Hall
Ch 2 -45
Social Policy & Mission
Social policy should be integrated in all
strategic-management activities.
Mission should convey the social
responsibility of the firm
Copyright 2005 Prentice Hall
Ch 2 -46
Mission Statements
2003 Rated Best in Social Responsibility
(Wall Street Journal)
1. Alexander & Baldwin
6. BP America
2. Johnson & Johnson
7. Procter & Gamble
3. American Express
8. Administaff
4. Altria Group
9. Medtronic
5. United Parcel Service
10. Merck
Copyright 2005 Prentice Hall
Ch 2 -47
Vision & Mission
Research results are mixed, however,
firms with formal mission statements -
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2x average return on shareholder’s equity
Positive relationship to company performance
30% higher return on certain financial measures
Copyright 2005 Prentice Hall
Ch 2 -48
Customers
Products
Services
Markets
Technology
Employees
Mission
Elements
Survival
Growth
Profit
Public
Image
Self-Concept
Copyright 2005 Prentice Hall
Philosophy
Ch 2 -49
Components and Questions That a
Mission Statement Should Answer
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Customers: Who are the firm’s customers?
Products or services: What are the firm’s major products?
Markets: Geographically, where does the firm compete?
Technology: Is the firm technologically current?
Concern for survival, growth, and profitability: Is the firm
committed to growth and financial soundness?
Philosophy: What are the basic beliefs, values, aspirations, and
ethical priorities of the firm?
Self-concept: What is the firm’s distinctive competence or
major competitive advantage?
Concern for public image: Is the firm responsive to social,
community, and environmental concerns?
Concern for employees: Are employees a valuable asset of the
firm?
Copyright 2005 Prentice Hall
Ch 2 -50
PepsiCo Mission
PepsiCo’s mission is to increase the value of our
shareholders’ investment. We do this through sales
growth, cost controls, and wise investment
resources. We believe our commercial success
depends upon offering quality and value to our
consumers and customers; providing products that
are safe, wholesome, economically efficient and
environmentally sound; and providing a fair return to
our investors while adhering to the highest
standards of integrity.
Copyright 2005 Prentice Hall
Ch 2 -51
Ben & Jerry’s Mission
Ben & Jerry’s mission is to make, distribute and sell
the finest quality all-natural ice cream and related
products in a wide variety of innovative flavors made
from Vermont dairy products. To operate the
Company on a sound financial basis of profitable
growth, increasing value for our shareholders, and
creating career opportunities and financial rewards
for our employees. To operate the Company in a
way that actively recognizes the central role that
business plays in the structure of society by initiating
innovative ways to improve the quality of life of a
broad community—local, national and international.
Copyright 2005 Prentice Hall
Ch 2 -52
Mission Statement Evaluation Matrix
COMPONENTS
Customers
Products
Services
Markets
Concern for
Survival,
Growth,
Profitability
PepsiCo
Yes
No
No
Yes
No
Ben & Jerry's
No
Yes
Yes
Yes
No
Organization
Copyright 2005 Prentice Hall
Technology
Ch 2 -53
Mission Statement Evaluation Matrix
COMPONENTS
Philosophy
SelfConcept
Concern for
Public Image
Concern for
Employees
PepsiCo
Yes
No
No
No
Ben & Jerry's
No
Yes
Yes
Yes
Organization
Copyright 2005 Prentice Hall
Ch 2 -54
Group Work
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Two groups
Page 69 Experiential Exercise 2A
 A business mission statement is an integral part of strategic
management. It provides direction for formulating, implementing,
and evaluating strategic activities. This exercise will give you
practice evaluating mission statements, a skill that is a
prerequisite to writing a good mission statement.
 Evaluate (15 min)
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Criterion Productions, Inc.
Mid-America Plastics
Hatboro Area YMCA
UMFK
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On next slide
Rainbow Cove, LLC
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On next slide
Copyright 2005 Prentice Hall
Ch 2 -55
Mission Statement Examples
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UMFK
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The University of Maine at Fort Kent is a liberal arts based university offering quality
baccalaureate and associate degree programs responding to the needs of northern Maine.
The UMFK academic experience provides close interaction with faculty, small classes and the
use of leading technology to prepare students for lifelong learning and success as
professionals and engaged citizens of a democracy.
Our curriculum emphasizes the special challenges of rural communities in America. The
university preserves and fosters an appreciation of the Acadian and Franco-American
heritage and culture while welcoming students of all ethnic and racial heritages. We celebrate
our proximity to the wonder of Maine's wilderness and the joys of outdoor sports. UMFK
contributes to the economic, social and cultural development of the St. John Valley and we
believe that a diverse student body enriches the learning experience of all. In addition, the
University of Maine at Fort Kent joins the University of Maine at Machias and the University of
Maine at Presque Isle working in a consortium with the goal of maximizing efficiencies of
operation while enhancing educational quality and opportunity for all those served by the
three campus communities.
Rainbow Cove, LLC
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The mission and vision of Rainbow Cove, LLC is to develop the properties owned on
Big Madawaska Lake, Maine into several profitable business ventures that satisfy the
following four requirements;
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Benefit the economic condition of Northern Maine
Preserve the unique Swedish cultural heritage of the Big Madawaska Lake region
Foster an appreciation for the natural beauty of Northern Maine
Promote environmentally sound, four-season outdoor recreational activities
Copyright 2005 Prentice Hall
Ch 2 -56
Evaluation
Components
1
2
3
4
5
6
7
8
9
Criterion Productions
Yes
Yes
No
No
No
Yes
Yes
No
No
Mid-America Plastics
No
No
No
No
No
Yes
No
No
Yes
Hatboro YMCA
Yes
Yes
Yes
No
No
Yes
Yes
Yes
No
UMFK
Yes
Yes
Yes
No
No
No
Yes
Yes
No
Rainbow Cove LLC
Copyright 2005 Prentice Hall
Ch 2 -57
Group Work
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There is no one best vision or mission statement for a given
organization. Analysts feel that KKD needs a clear vision and
mission statement to prosper. Writing a mission statement that
includes desired components—and at the same time is inspiring
and reconciliatory—requires careful thought. Mission statements
should not be too lengthy; statements under 200 words are
desirable.
INSTRUCTIONS:
 Take 15 minutes to write a vision and mission statement for KKD.
Scan the case for needed details as you prepare your
statements.
 Join with three other classmates to form a group of four people.
Read each other’s statements silently. As a group, select the best
vision statement and the best mission statement from your group.
 Read those “best” statements to the class.
Copyright 2005 Prentice Hall
Ch 2 -58
Mission and Vision for KKD
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KKD Vision Statement:
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KKD strives to be the leading choice of consumers for
specialty baked goods and beverages.
KKD Mission Statement:
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Krispy Kreme seeks to maintain its loyal customer base
and attract new customers in both current and developing
markets with its commitment to quality and consistency in
its doughnuts, other baked goods, and beverages (1, 2, 3,
8). Krispy Kreme will lead the industry via a commitment to
innovation, service, growth, and quality (4, 5). Its channel
system and franchise system ensure profitability for
retailers and franchisees while providing convenient access
for customers. Krispy Kreme desires to instill the belief that
the company is a set of capabilities, not just a product or
brand (6, 7, 8, 9).
Copyright 2005 Prentice Hall
Ch 2 -59