HRM textbook

CHAPTER 3 HUMAN RESOURCE MANAGEMENT STRATEGY AND ANALYSIS 75
FIGURE 3-4 SWOT Matrix,
with Generic Examples
Potential Strengths
Market leadership
Strong research and development
High-quality products
Cost advantages
Patents
Potential Weaknesses
Large inventories
Excess capacity for market
Management turnover
Weak market image
Lack of management depth
Potential Opportunities
New overseas markets
Failing trade barriers
Competitors failing
Diversification
Economy rebounding
Potential Threats
Market saturation
Threat of takeover
Low-cost foreign competition
Slower market growth
Growing government regulation
guide for compiling relevant information about the company s environment. This
includes the economic, competitive, and political trends that may affect the
company. The SWOT chart in Figure 3-4 is the 800-pound gorilla of strategic
planning; everyone uses it. Managers use it to compile and organize the company
strengths, weaknesses, opportunities, and threats. The aim, of course, is to create a
strategy that makes sense in terms of the company s strengths, weaknesses, opportunities,
and threats.
STEP 3: FORMULATE A NEW DIRECTION The question now is, based on the
environmental scan and SWOT analysis, what should our new business be, in terms of
what products we will sell, where we will sell them, and how our products or services
will differ from competitors products?
Managers sometimes formulate a vision statement to summarize how they see
the essence of their business down the road. The vision statement is a general statement
of the firm s intended direction; it shows, in broad terms, what we want to
become. 2 Rupert Murdoch, chairman of News Corporation (which owns the Fox
network, and many newspapers and satellite TV businesses), built his company
around a vision of an integrated, global satellite-based news-gathering, entertainment,
and multimedia firm. PepsiCo s vision is Performance with Purpose. PepsiCo
CEO Indra Nooyi says the company s executives choose which businesses to be in
based on Performance with Purposes three pillars of human sustainability, environmental
sustainability, and talent sustainability. 3
Whereas vision statements usually describe in broad terms what the business
should be, the company s mission statement summarizes what the company s main
tasks are now. Several years ago, Ford adapted what was for several years a powerful
mission for them making Quality Job One.
STEP 4: TRANSLATE THE MISSION INTO STRATEGIC GOALS Next,
translate the mission into strategic objectives. The company and its managers need
strategic goals. At Ford, for example, what exactly did making Quality Job One
mean for each department in terms of how they would boost quality? The answer is
that its managers had to meet strict goals such as no more than 1 initial defect per
10,000 cars.
vision statement
A general statement of the firm s intended
direction that shows, in broad terms, what
we want to become.
mission statement
Summarizes the answer to the question,
What business are we in?