The Nature and Purpose of an Organizations Vision Essay

The Nature and Purpose of an Organizations Vision Essay The Nature and Purpose of an Organizations Vision – Essay Example ï » ¿The Nature and Purpose of an Organization’s Vision 1. What is meant in Porter’s Five Forces Model by competitive pressure coming from suppliers? What are the market conditions that could create an opportunity in this area? What will make this an opportunity? Competitive press pressure from suppliers is known as â€Å"supplier power† and generally speaks to the fact that industry or businesses require inputs of raw materials such as labor, parts, or other supplies. Accordingly, there are relationships between companies that offer goods and services and the suppliers of raw materials. Supplier power occurs when suppliers are able to exert pressure on markets to increase costs to manufacturers. The market conditions contributing to such power include; times when there is a threat of forward integration by suppliers (when the supplier can acquire the distributor or compete directly), times when suppliers are concentrated into just a few firms (like the pharmaceutical industry), if conditions exist where there is a high cost to switch suppliers (say, if Apple stopped making Mac computers), or there is a powerful customer base (like boycotts). The opportunity in this market (if you are a supplier) is to raise prices to capture some of t he industry profits from wholesalers, or increase R&D to forward integrate into a direct competition with wholesalers. 2.Describe the nature and purpose of an organization’s vision? What impact should a vision have on the remaining parts of the strategic process? Organizational vision is the primary driver for the firm’s existence. In the form of a mission statement or vision statement, the company sets forth its values, the things the company wants to achieve, and the things management sees as future opportunities for the organization. The vision is vital to the strategic process as it frames the company’s strategic objectives and provides measurable goals and metrics. These will involve things like guiding the company’s position within its competitive market by establishing metrics such as the organization’s reputation (customer service), its penetration (market share), or its product and service bundle (quality). 3.What is meant by a balanced scorecard? How would you use such a scorecard to address both short and long-term outcomes? A balanced scorecard is when management has set the financial performance goals and the strategic performance goals in conjunction with each other. Financial performance is measured internally, e.g., ratios, profits, and operating costs, and strategic performance goals are measured externally, e.g., market share, competitive strength, and market penetration. These goals are set within time parameters to provide benchmarks in both the short- and long-term. The balanced scorecard is used to address outcomes by looking at both financial and strategic metrics in combination. Focusing solely on financial performance causes the company to become insular and it is likely to miss opportunity. Focusing solely on strategic position can create disaster if the company is losing money and management does not take steps to correct the conditions. When both of these elements are being utilized, the company has maximum opportunity for success. 4.How would you define what constitutes effectiveness of an existing strategy? What tools or processes would you use to evaluate such effectiveness? How would you use them? Simply stated, the definition of an effective strategy is one that works, i.e., one that accomplishes the vision of management. The determination of what â€Å"works† is the reason that companies develop evaluation tools so that management can understand where it is in terms of both market performance and industry benchmarks. The process flow for good evaluation involves five steps: 1. Establish exactly what key indicators are going to be measured. 2. Establish the desired values for these indicators. 3. Measure the indicators defined. 4. Compare the measured indicators with the desired values set forth. 5. Change internal processes or external focus to bring the company in line with the desired values. These are used by applying the process to any specific aspect of the vision. For example, if the vision is to be the cost leader in a market, the key indicators may be the competitor’s pricing, and the desired value for the company would be set at a point where it is lower than the competitor’s but still profitable. Management would then measure the indicators to see if the pricing was set correctly. If, for example, management found that its price was profitable but exactly the same as the competition, it would adjust its pricing points lower to increase volume and profits. 5.Under what conditions would a Broad-Differentiated strategy be most appropriate? How would the organization have to operate to execute this strategy? This strategy, which seeks to provide a very unique product to all segments of the market, is appropriate when the company has the opportunity to convince customers that its uniqueness is a superior quality, and that the price is justified. The conditions for propriety of executing this strategy include; having access to new information with an emphasis on R&D, a strong creative pool for product design, a strong sales and marketing department that can effectively demonstrate the strengths of the product, as well as a good corporate reputation for quality (and innovation).