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Definition of Business

Dr.L.Prakash Sai

By creating new products, spreading technology and raising

productivity, enhancing quality and improving service, business has

always been the active agent of progress.

It helps make the good things of life available and affordable to ever

more people. This process is driven by competition and spurred on by

the need to provide adequate returns to those who risk their money and

their careers, but is, in itself, a noble cause.

We should make more of it. We should, as charitable organizations do,

measure success in terms of outcomes for others as well as for

ourselves.

Charles Handy

What’s Business For ?

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Business Definitions

Business Definition Derek F. Abell

Customer functions - What?

Time pieces: record time, fashionable, gift item

Customer groups - Who?

To serve individuals or for Industrial use

Alternate technologies - How?

Mechanical, Quartz digital, Quartz analog

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Xerox India Ltd. (erstwhile Modi Xerox)

Strategy of pitching itself as a service organization rather than a

vendor of machines (of which there are plenty in India).

Customer groups - individual organization, government departments,

export market

Customer functions - provide communication with ease of reproduction

Technology - high quality, latest available from Xerox Corp., USA.

Xerox India: Action taken....

Customer Group : efficient high priced & appropriate & low priced

model; Marketing - full service maintenance agreement, renting of

machines.

Customer functions : high & medium quality photocopier- spares

(drums), consumable items (toner, developer) – after-sales service

support.

Technology : heavy investments in high-tech manufacturing facilities,

high quality manpower, customer services staff.

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Dictionary Definition:

Vision is an “image of the future we seek to create.”

A vision statement describes in graphic terms where the goal-

setters want to see themselves in the future.

It may describe how they see events unfolding over 5 or 10

years if everything goes exactly as hoped.

Vision

Vision Statements

Indian Oil Corporation

A major diversified, transnational,

integrated energy company, with national

leadership and a strong environment

conscience, playing a national role in oil

security& public distribution.

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Dictionary Definition:

Mission is a “purpose, reason for being; also, an inner calling

to pursue an activity or perform a service.”

Mission statement defines the purpose or broader goal for

being in existence or in the business.

It serves as an ongoing guide without time frame.

Mission

What is our business?

What will it be?

What should it be?

- Underlying need of the society that any organization serves to fulfill

Mission

Mission: To satisfy

information needs of

the society

Book Publisher: To provide excellent reading material

Magazine Editor: To present news analysis in balanced and unbiased manner

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Feasible

Precise

Clear

Motivating

Distinctive

Indicate major components of strategy

Indicate how objectives are achieved

Characteristics of Mission

Mission, Purpose, Aim, Goal, General Objective, Grand Strategy,

Corporate Objective, Corporate Philosophy – related terms

Mission Statement Criteria for evaluation

Is our mission statement is focused on satisfying customer needs rather than being focused on the product?

Does our mission statement tells who our customers are?

Does our mission statement explains what customer needs our company is trying to satisfy?

Does our mission statement explains how our company will serve its customers?

Does our mission statement fits the current market environment?

Is our mission statement based on our core competencies?

Is our mission statement motivating and does it inspire employee commitment?

Is our mission statement realistic?

Is our mission statement specific, short, sharply focused and memorable.

Is our mission statement is clear and easily understood?

Does our mission statement says what we want to be remembered for?

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Mission & Vision Statements

Our Mission:

To refresh the world - in mind, body and spirit

To inspire moments of optimism - through our

brands and actions

To create value and make a difference

everywhere we engage

Our mission is:

To bring inspiration and innovation

to every athlete* in the world.

*If you have a body, you are

an athlete.

The Coca-Cola Company

Vision of the Coca-Cola Company:

To achieve our mission, we have developed a set of goals, which we will work with our bottlers

to deliver:

Profit: Maximising return to shareholders, while being mindful of our overall responsibilities

People: Being a great place to work, where people are inspired to be the best they can be

Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy

people's desires and needs

Partners: Nurturing a winning network of partners and building mutual loyalty

Planet: Being a responsible global citizen that makes a difference

Productivity: Be a highly effective, lean and fast-moving organisation

Vision:

"To be a globally respected

corporation that provides best-of-

breed business solutions,

leveraging technology, delivered

by best-in-class people."

Mission Statement:

"To achieve our objectives in an

environment of fairness, honesty,

and courtesy towards our clients,

employees, vendors and society

at large."

Values: We believe that the softest pillow is a clear

conscience. The values that drive us

underscore our commitment to:

Customer Delight To surpass customer expectations

consistently

Leadership by Example To set standards in our business and

transactions and be an exemplar for the

industry and ourselves

Integrity and Transparency To be ethical, sincere and open in all our

transactions

Fairness To be objective and transaction-oriented,

and thereby earn trust and respect

Pursuit of Excellence To strive relentlessly, constantly improve

ourselves, our teams, our services and

products to become the best

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Vision:

"To be among the global top 10 by

2010 ."

Mission Statement:

"To help customers achieve their

business objectives by providing

innovative, best-in-class

consulting, IT solutions and

services. Make it a joy for all

stakeholders to work with us."

Q: TCS had a target to be a $10-billion firm.

Have you given any target to yourself in

terms of the company’s growth?

A: In a few days time, we will have a vision

statement but it will not be about numbers.

-N.Chandrasekharan, CEO

(Oct.07, 2009: Business Standard)

“TCS has become the world's 9th largest

s/w services company in terms of

revenues.”

For the $6.3 billion-TCS, the focus now "would

be to climb the value chain in a bid to

differentiate its services from competition,"

- Ratan Tata, Chairman

(July 03, 2010: The Times of India)

Objectives

Define organization’s relationship with its environment

Help pursue organization’s mission

Basis for strategic decision making

Standards for performance appraisal

Translated to goals - attainable - specific

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Setting Objectives: 5 rules

S pecific

M easurable

A ttainable

R elevant

T imely

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Hierarchy of objectives

Divisional

Departmental

Functional

Operational

What objectives are set? Peter Drucker

1. Market standing

2. Innovation

3. Productivity

4. Physical & financial resources

5. Profitability

6. Manager performance & development

7. Worker performance & attitudes

8. Public responsibility

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How objectives are formulated? Glueck

Forces in environment

Realities of enterprise’s resources & internal power

relationships

Value system of the top executives

Awareness by the management

Critical Success Factors What to we need to do in order to be successful?

e.g. : Courier - reliability & speed

CSFs have an impact on profitability

Product attributes, competitive capabilities and market achievements

Scientific research, low cost efficiency, strong distribution network,

fast technical assistance, design expertise, image, managerial experience,

superior workforce talent.

ORIGIN:

The term 'critical success factor' was first coined by Rockart (HBR, 1979).

He defined it as:

“the limited number of areas in which results, if they are satisfactory, will

ensure successful competitive performance for the organization.’”

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Critical Success Factors ELGI is based in Coimbatore TN (since 1960s)

Humble beginnings -

Bus body building

Wood-working machinery

Reclaiming rubber from used tyres

Automotive chains – Capturing OEM market with quality & reliability in delivery

Garage Equipment – Customer service thru efficient after-sales service

"ELGI aims to get a sizeable share of the world market for its

compressors and automotive equipment business by 2015 " Vision

Rotary Compressor Division

Reciprocating, Railways and Original

Equipment Division

Automotive Equipment Division

Engines Division

Manufacturing and Engineering Services

5 Divisions

Identifying Critical Success Factors

Basis on which customers choose brands or sellers - What product

attributes are crucial?

Resources & competitive capabilities a seller needs to have to

remain competitive

What enables sellers to sustain competitive advantage?

A critical success factor (CSF) is not a “key performance indicator” (KPI).

Critical Success Factors are elements that are vital for a strategy to be successful.

KPIs are measures that quantify objectives and enable the measurement of strategic

performance.

For example: KPI = number of new customers;

CSF = installation of a call centre for providing quotations

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Summary Vision: Destination of business

Mission: Role they wish to play in society

Values: Beliefs that are shared among the stakeholders of an organization.

Purpose: Purpose(s) organization should strive for

Policy: Guidelines for action

Procedures: Series of related steps or tasks

Rules: Prescribed course of action

Strategy: Course of action or a plan - unified comprehensive and integrated - to assure

that the objectives of the organization are achieved.

Goal: Open-ended attributes denoting a future state or outcome of an effort put in now.

Objective: Close-ended attribute which is precise and is expressed in specific terms.

Objectives are often used to refer to end-situations whereas goals are about stages in

the process of reaching the objective.

Analysis

FACET

FOCUS MOULDS MECHANISMS MANIFESTATIONS SWOT

Inte

rnal A

naly

sis

COMPANY • Vision, Mission, Values

• TOWS / SPACE matrix

• Biz Portfolios

• Structure

• Processes

• Systems

• Excellence

• Innovation Stre

ngth

s &

Weaknesses

CUSTOMER • Pricing Models

• Service-Profit Chain

• Co-Creation

• Activity Based

Management

• Balanced Scorecard

• Value Proposition

Exte

rnal A

naly

sis

COMPETITOR • VRIO

• Value Net

• Hyper-Competition

• Competitive Intelligence • Competitive Advantage Opportu

nitie

s &

Thre

ats

CONTEXT • PESTEL

• Five Forces

• Scenarios

• Foresight

• Knowledge

Management

• Early Warning Signals

• Blind spots

STRATEGY FORMULATION EXECUTION & IMPLEMENTATION