The mission of a company in order to always get the best results
The mission should talk about what we offer to clients, regardless of what occurs, and that’s what they’re looking for the company. Basically, companies have two missions: the internal and external.
1. Internal Mission: determines the rate of return sought. It is worth mentioning that a company can generate strong value but not be profitable.
Is common confusion between profit and profitability.
Profit or profit = revenue – expenses
Profit margin = profit / price
Return = profit / assets
In turn, this formula can be decomposed into:
Profitability = (profit / sales) x (sales / assets)
Profit margin = profit / sales
Turnover = Sales / Assets
Then the formula for return becomes:
Return = profit margin x rotation
From this expression can discuss strategies to follow, trying to find the balance that maximizes the profitability equation, increasing the utility and / or sales volume.
It is important to think in terms of profitability, and that can be charged much, ie, achieving significant levels of sales and business will not be profitable.
2. External mission: important to define under what guidelines the company is released to the market to find the return sought.
The external mission should be stated from the perspective of how customers see the company, not what she thinks will sell. Therefore, from the definition of the mission, you begin to convey the philosophy, culture and way of making decisions inherent in the business. It should be wide enough not to limit the company and at the same time sufficiently defined as marking the course.
This is because people do not buy things, let alone what the company believes it sells, just buy the solution to a problem and this problem is different in everyone, even differs in the same person in different situations, although the solution with the same product, each person is buying another solver for personal and different.
In short, we must be clear what business we are and who our customers. Here are some examples that illustrate this conceptual approach.
Example 1: everybody knows that the Swiss were the owners of the business of watches in the world. No one better than them to make mechanical machines with high-precision parts. When you see the application of quartz and is offered to the Swiss manufacturers, none was accepted because they were in the business of manufacturing mechanical machines with high precision parts. Much later discovered they were in the business of … “tell the time.”
Meanwhile the market was taken over by the Japanese for many years paid the consequences of not having clear business mission. The latest statistics indicate that once again leading the watch market thanks to the restructuring of their industry guided by the mission of telling time.
Example 2: U.S. radio manufacturers to sell tired tube radios. The mission was to sell radios valves. Until Bell invented the transistor and offered it to all companies using the valves in their manufacturing process. Nobody was interested in this technological advancement, but a gentleman Sony of Japan bought the patent and soon led the global electronics market. Sure, your business mission is “to communicate, inform and entertain.” So buy as the CBS record companies and film companies such as Columbia.
HOW TO DETERMINE WHAT IS OUR BUSINESS
It is almost always a difficult question can be answered only after much thought and study. (Peter Drucker)
What our business is not determined by the producer but the consumer. Do not define the name of the company, the articles or bylaws under which society is constituted, but the need to satisfy the consumer when purchasing a product or service. The only question can be answered, therefore, looking at business from outside, from the standpoint of the consumer and the market. What the consumer sees, thinks, believes and needs at any given time must be accepted by management as an objective fact which deserves to be taken into account as seriously as sales reports, tests conducted by engineers or counter figures, which for a few managers is easy to understand.
It is therefore the primary responsibility of management at its highest level asking “What is our business?” And ensure that the study question is answered thoroughly and correctly. It is rare that the question is formulated in a clear and sharp and in turn be spent on proper study and thought, therefore, it is considered that the absence of a precise definition of the mission represents a frequent cause of business failure.
Conversely, wherever we find a remarkably successful business, often find that their success relies heavily on the fact of asking the question clearly and deliberately and carefully and answer thoughtfully.
Also a company or organization is multidimensional. On the one hand, can simply be defined according to the products or services offered and the markets or customers who receive them. But always there are other dimensions that sharpen the definition and reveal additional facets of the uniqueness of the organization. For example, McDonalds is so proud of her hamburger called Hamburger University at its training center. Is McDonalds just a great burger chain? Or, is a giant in the fast food business, or international agent licensing, or one of the largest processors of meat and fries in the world?
It is all that and more, but the way that McDonald chooses to define the core business influences the likely future directions. For example, if McDonalds itself is defined by the ability to grant concessions may be reasonable to develop a worldwide chain of pizza sales. But perhaps it is logical to acquire a soft drinks company in Europe or Big Macs offering frozen in supermarkets. The last two alternatives would be feasible given other definitions. To define the basic nature of the organization we must answer the following questions:
What is the current mission or purpose of the organization?
What the organization provides value to society?
What is the unique position of the organization and / or company in the industry and / or institutional structure?
What your organization needs to succeed?
These questions may seem obvious or even trivial at first, but it’s worth taking time to carefully evaluate and record their responses. In many cases, a mission statement defines how the organization intends to achieve its objective, define the products and markets, although some also include the “creed” or the values of management, its operating philosophy and its main objectives. To say that the organization has a mission is to declare your goals, not its direction.
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