Mission: it is the current image that focuses the efforts made by the organization to achieve the fundamental purposes, it indicates specifically where the success of our company lies.
It can be built taking into account the questions:
- About us? = identity, legitimacy What are we looking for? = PurposesWhy do we do it? = Values, principles, motivations For whom do we work? = Clients
It is important to identify and build the mission without confusing the ends and the means we use to achieve it, for example: the mission of a newspaper is not to sell printed papers, but information.
It is not the product or service that we offer our reason for being, if not what need we are satisfying
A well-defined purpose has three elements:
- A verb indicating change of the status quo (increase, decrease, generate, eliminate, transform,) The explanation of the problem or condition that is sought to change The identification of specific clients
The expression of what to do usually begins with phrases like:
- Through… Provide… Lend…
The mission reveals:
- Identity of the organization to be recognized within its values, rules, principles, which guide the activity of the members cohesion around common objectives, which facilitates conflict resolution and motivation of staff.
The mission defines the interrelation between the organization and its relevant actors: clients, suppliers, employees, community, shareholders, environment, it is usually called purpose and is the implicit conception of why or reason of being of the Company; it must be a commitment shared by everyone in the organization; It must be precise and feasible. Once the process is finished, its results are disseminated to all management areas for analysis and contributions. Each area (depending on the nature of the company) must in turn generate its own mission, so that all are directed towards the same ends.
Situation analysis:
It is the means by which the company makes a recognition of its reality both internally and in the environment and serves to assess, evaluate and analyze variables and factors both past, present and future trends.
It is recommended to structure this analysis on three levels:
- Environmental Atmosphere Specific environment Internal situation
The first two levels are located in the environment and the third internally. There are various tools that allow us to carry out this exercise, including: specific guides and questionnaires, structural analysis of industrial sectors (Porter's 5 F), analysis of key actors, and the FLOA (forces, limitations, opportunities, and threats).
Environment analysis is the contextual framework for strategic planning
The internal environment of the company is the context in which the work occurs.
The starting point is to recognize that there are forces within and around us that act by influencing (hindering or promoting) the realization of our basic purposes and strategic objectives.
A proactive vision in the analysis is to recognize that we can also develop strategic actions from our organization to influence these forces.
The situation analysis is a critical step in the elaboration of the Strategic Plan, taking into account that the quality and effectiveness of the decisions taken will be directly proportional to the quality and effectiveness of the information generated.
The planning system contemplates the response of the company to its present and future environment, "in order to allow the business to operate with a maximum of consistency and a minimum of friction in the changing conditions of an uncertain world." (Wilson, 1983).
Surrounding analysis:
A series of exogenous variables, situations or conditions that affect or can positively or negatively impact the development of the company in the present or future are analyzed in detail. For academic and depth analysis purposes, it is recommended to subdivide the superstructural aspects from those corresponding to the specific environment of the industrial sector; The analysis of the environmental atmosphere and the specific environment are part of a whole, however a methodology is proposed that analytically recognizes two large dimensions of the environment, which in turn contain interconnected and interrelated components.
Benefits of environment analysis:
- identify which are the environmental forces that influence or affect the behavior of the company at a macro level and even in the sector, analyze the degree and nature of the influence and make predictions about the possible implications for the development of the company
The analysis of the ambient atmosphere and the specific environment is carried out in the space and time dimensions simultaneously.
The aim is to focus on the current situation in the environment and how it could be transformed in the future, identifying the implications for the company that can be deduced from said analysis.
Environmental Atmosphere:
It is the superstructural part that surrounds the company and is made up of forces of an economic, political, social, cultural, demographic, legal, ecological and technological nature.
In order to achieve a good level of depth and specificity, each of these forces is analyzed, without losing sight of the interdependence between them, the social is totally interconnected with the economic, the political, etc.
The various categories that make up the vision of the environmental atmosphere (the political, economic, social,…) are broken down into variables, situations and conditions for their study, and in this regard it is interesting that the analysis of each of these elements allows us to:
- Have a knowledge of the behavior of the variable, factors that determine it and how it operates Explain in depth and precision the way the variable affects the organization: that is, qualitative and quantitative measurement of its effects, in such a way that it is feasible to take advantage of them, if they are opportunities offered by the environment or to counter them, if they are threats. Identify the centers of power and / or decision in which the behavior of the variable or phenomenon is generated and originated, indicating the degree of incidence that it may have on the organization, to guide the action plan that intensifies, mitigates or eliminates its effects as appropriate.
The study of the environmental atmosphere in its different categories comprises various stages; descriptive, analysis and conclusions.
- Descriptive: it is about reviewing all the variables or situations in the category being studied and identifying those that have or may have influence on the company Analysis: it is about explaining how it influences the situations, conditions or variables identified in the behavior of the company company Conclusions of the analysis: they must lead to the development of reasoning and statements that guide the formulation of the strategic plan
For the analysis of a particular organization, select those variables that are relevant according to the activity it performs. Likewise, variables should be added or those situations and indicators that particularly interest the organization should be considered.
In the same context, it is worth noting that the scope of the space in which each variable must be studied depends on the scope of the company in its operation, marketing of goods or services and obtaining raw materials, which will determine whether the environment It must be analyzed at the local, regional, national or international level.
Components of the Environmental Atmosphere analysis:
- Demographic environment Economic environment Social environment Political environment Cultural environment Legal environment Technological environment Ecological environment
Specific environment
Structural analysis of the Industrial sectors or Porter's Five Forces
In the early 1980s, Michael Porter, in his book Competitive Strategy: Techniques for Analyzing Industries and Competitors, proposed a model for analyzing the structure of what he called "industrial sectors" that results from grouping together for study purposes the companies that They compete with each other by producing and / or marketing the same or similar products or services. One of the postulates of this model is that within the organization there are five forces that determine the long-term profitability of a market or some segment of it.
This tool is important when it comes to diagnosing the situation of the group of competitors grouped in the industrial sector and recognizing the strategic skills that each company can have to create strategies that allow sustainable competitive advantages in the long term.
The five competitive forces identified by Porter are:
Threat of entry of new competitors
The industrial sector or a specific segment is or is not attractive depending on whether or not entry barriers are easy to overcome by new entrants who may come with new resources and capabilities to take over a portion of the market.
Threat of income from substitute products
An SI or segment has a ceiling on its prices and therefore on its profitability if there are current or potential substitute products. Depending on the technological base, they can enter at lower prices reducing the profit margins of the industry.
Bargaining power of suppliers
The providers of an SI will have a correlation of forces in their favor if they are well organized by trade unions, have strong resources and can impose their price conditions and order size. The conditions that would aggravate the SI situation are if the supplies they supply are key, have no substitutes or are scarce and high-cost, and if the provider strategically agrees to integrate forward.
Bargaining power of buyers
The correlation of forces to negotiate will be in favor of the clients if they are organized, the product has several or many suppliers and / or substitutes, the product is not very differentiated or they can make substitutions equally or at very low cost. Buyers generally demand lower prices, higher quality and services at the expense of the profit margins of IS companies. There are situations where it is convenient for buyer organizations to integrate backwards.
Rivalry between competitors
It will be more complex for an organization to compete in an SI or in one of its segments where competitors are very well positioned, are very numerous and have high fixed costs. The rivalry is usually expressed in: price wars, strong and aggressive advertising and marketing campaigns, promotions and new product launches, which ultimately ends up benefiting buyers or other industrial sectors, such as transferring resources to the industry. advertising to the detriment of the profitability of the SI itself
Strengths-Limitations-Opportunities-Threats, FLOA:
It is a tool that facilitates the analysis of the internal situation, through the FLOA an evaluation of the main factors that are expected to influence the fulfillment of basic purposes of the company or institution is made; it requires scrutinizing and in some way predicting what is supposed to happen or the needs that will be had, in addition to what must be done to be prepared.
The strengths and limitations are part of the internal world of the company, where it can directly influence the future. Opportunities and threats take place in the external world of the company or institution, which is not controllable but influential, a practice that must be considered in the plans. The issues listed must be specific to the particular company.
Forces
They represent the main points in favor of the company or institution in four broad categories: Human potential, Process capacity (which includes equipment, buildings and systems) Products and services and Financial resources.
Limitations
It replaces the term weaknesses with which it has been traditionally called because it implies that something is wrong or with which one must live as if it were a disability; send a negative message. The term limitations contains less associated prejudice, weakness is nothing but lack of strength. Limitations related to human potential, process capacity, or finances can be reinforced or actions taken to impede progress.
Opportunities
They are events or circumstances that are expected to occur or can be induced to occur in the outside world and that could have a positive impact on the future of the company. This tends to appear in one or more of the following broad categories: Markets, Customers, Industry, Government, Competition and Technology.
Threats
They are events or circumstances that may occur in the outside world and that could have a negative impact on the future of the company; they tend to appear in the same broad categories as opportunities. With a creative approach, many threats become opportunities or are minimized with careful planning.
The FLOA analysis is also known as Foda or Dofa.
This type of analysis represents an effort to examine the interaction between the characteristics of a particular company and the environment in which it competes. The FLOA has multiple applications and can be used as a tool by all levels of the organization and in different analysis categories such as product, market, product line, department, company, functional area, etc. Many of the conclusions obtained as a result of the analysis may be very useful for formulating the program of strategies to be incorporated into the strategic plan.
Since in this case the FLOA tool is being used for strategic (long-term) purposes, it should focus only on the key factors for the future success of the organization. You must highlight internal differential strengths and weaknesses objectively and realistically, as well as key opportunities and threats from the environment.
View
To carry out the process of formulating the future is to establish the "Vision".
Visualizing the future implies a permanent examination of the organization vis-à-vis its clients, its competition, its own culture, and above all, discerning between what it is today, and what it wants to be in the future, all this in front of its capabilities and opportunities. The aspects to review are;
- What the Company aspires to be and not what it has to do, What type of Company do we want to be? What type of business should the Company enter and what should be the performance objectives ?.
There are nine steps to follow to arrive at the vision definition:
(Linda Kasuga Business Foundation - Luis Humberto Franco Quality and Excellence)
1. Confirmation of vision statement. Who develops the vision must decide what will be its declaration, example: "we will be leaders in the design and manufacture of equipment for the food industry".
2. Understanding of the environmental impact. Detect the influences of the external environment, important for the future of the Company. Reviewing the important facts of the environment develops an understanding of how to act and discover opportunities to influence it.
3. Definition of customers. Define the clients that the Company expects to have, 4. Selection of the groups of products and / or services of the company, integrates those that you want to generate, in this topic it is necessary to take into account some alternatives:
- customer-driven products; competition-driven products; supplier-driven products; substitute products that replace existing ones; technology-driven products; products based on some strength of the Company.
5. Estimation of the Company's potential to facilitate any future strategic investment decision. Then, it is necessary to define the growth potential based on its speed
6. Identification of added values; they are a particular set of skills, positioning, experience or resources to act successfully. They can be of two types: main or secondary, the first are supplied by the Company, the secondary are obtained through value-added providers.
7. Selection of the main and secondary aggregate values. If the company does not have the added values for the products it wants to offer, it can go to: subcontracting, creation of temporary joint ventures, acquisition of other companies, investments to create value.
8. Determination of potential suppliers and sources. Knowing the added values that we must seek, it will be necessary to debate widely so that the vision carries its support and commitment.
9. Quantification of the success criteria of the products. Here "measurable goals" and "appropriate incentives" are created to kick-start the organization's energy. These criteria are defined in terms of: product functionality, appearance, price, margin, quality, etc.
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