Role of Mission Statement in Strategic Planning

The development of strategic planning begins with an agreement on a definition or purpose for the business or organization. It basically answers the question, What business are we in? This question will dictate the type of products or services the business will offer as defined by the needs and wants of the specific market.

This agreement on a definition or purpose for the business or organization is commonly termed as the Mission Statement. This Mission Statement can be thought of as a kind of constitution or charter that is established by any business or organization when it comes into existence. But unlike constitutions or charters, the Mission Statement does not directly answer the question, What business are we in?

Instead of answering by categorically asserting, We sell air-conditioners (this is for purposes of illustration only), the Mission Statement states it in this manner We provide you with a comfortable climate. The Mission Statement first of all states the benefit of the product that is mentioned.

But stating the benefits of the products is not all there is to the Mission Statement. Mission Statements normally include some other very important ingredients, like:

a) The chosen area of activity for the organization; that includes the kinds of products, services or ideas to offered, the customers or clients to be served, and the geographical areas that it intends to cover.

b) The plan for use of the physical resources, financial resources, and human resources to help aid in customer or client satisfaction.

c) The plan for the competition in its arena of choice.

Start-ups Mission Statement

New business or organizations commonly termed as start-ups can be greatly benefited by a well defined and thought out Mission Statement. Start-ups are usually prone to two extreme organizational behaviors; they can be so aggressive and lose energy quickly and run out of resources or they can also be so passive by displaying a wait and see attitude in the market and so nothing actually happens.

To combat the common pitfalls of new business or start-ups, the Mission Statement of the business or organization should specifically focus on the law of the marketplace and that is to get customers and to keep them. This specific focus will be the guiding principle telling the business or organization what it intends to do and how it plans to do it.

For start-ups focus should come first, in order to achieve the intended result as defined by the Mission Statement. First on the focus list is the type of product or service. If one is engaged in the retail business then focus on this business line by getting the best product that will get and keep the customers. The same holds true if one is in the manufacturing, processing or service sectors. Second on the focus list is the market to be served. By looking at the demographics in the business location, focus could be given to the specific market. Identification of the specific market in the business location, as well as analyzing market gaps would enhance this portion of the focus list.

One cannot insist to serve a middle class market if the local demographics say otherwise. Third on the focus list is how to compete in the chosen arena. One can slug it out by waging a price war or one can wage a value added war by giving customers value added services and shopping comfort.