ChapterChapter

2

The Path to a Successful Business

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Because Business Decision Making is Complex, Successful Business Leaders Use a Thought Process to Make Sound Judgments and Decisions.

Because Business Decision Making is Complex, Successful Business Leaders Use a Thought Process to Make Sound Judgments and Decisions.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

The Path Toward a Successful BusinessThe Path Toward a Successful Business

Vision and MissionVision and Mission

Indicators of Business Success

(DesiredPerformance)

Indicators of Business Success

(DesiredPerformance)

Assessing the Environment

AndIts Impact

Assessing the Environment

AndIts Impact

ProvidingExcellence inProducts and

Services

ProvidingExcellence inProducts and

Services

Evaluating Results

And Making Changes

Evaluating Results

And Making Changes

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

VISION: A broad statement of what a business would like to

achieve.

MISSION: A statement that spells out why a business exits and

what the business will do.

VISION: A broad statement of what a business would like to

achieve.

MISSION: A statement that spells out why a business exits and

what the business will do.

Vision and MissionVision and Mission

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

To Grow, A Business Must Acquire ResourcesTo Grow, A Business Must Acquire Resources

Resources are the Factors of Production: Human Resources Physical Resources

Land, buildings, equipment & raw materials

Financial Resources Information

Resources are the Factors of Production: Human Resources Physical Resources

Land, buildings, equipment & raw materials

Financial Resources Information

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

1. Defines the company’s basic business.

2. Specifies the markets or constituents the business serves.

3. Specifies the basic philosophy, or core values, of the business.

1. Defines the company’s basic business.

2. Specifies the markets or constituents the business serves.

3. Specifies the basic philosophy, or core values, of the business.

The Mission StatementThe Mission Statement

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Dell ComputerDell Computer

Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in

markets we serve. In doing so, Dell will meet customer expectations of:

Highest qualityLeading technologyCompetitive pricingIndividual and company accountabilityBest-in-class service and supportFlexible customization capabilitySuperior corporate citizenshipFinancial stability

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Best BuyBest Buy

We improve people’s lives by making technology and entertainment products affordable and easy to use. Best buy’s

core values include:Unwavering ethics

Honesty and integrityRespect for our customers, our communities, and our fellow employees

Extraordinary growthFor our Company, our employees and our shareholdersDiscovery and learningEmbracing speed and change

Being the bestHaving fun while being the best

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Southwest AirlinesSouthwest Airlines

The mission of Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual

pride, and Company Spirit.

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Indicators of Business SuccessIndicators of Business Success

Achieving Financial PerformanceAchieving Financial Performance

Meeting Customer NeedsMeeting Customer Needs

Building Quality Products and ServicesBuilding Quality Products and Services

Encouraging Innovation and CreativityEncouraging Innovation and Creativity

Gaining Employee CommitmentGaining Employee Commitment

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Achieving Financial Performance…..the bottom lineAchieving Financial Performance…..the bottom line

Revenue: The amount customers pay for goods and services they

purchase

Expenses: Money a business must pay out to make its products and

provide its services

Profit: The amount of money left over after a business records all its

revenues and subtracts all its expenses

Revenue: The amount customers pay for goods and services they

purchase

Expenses: Money a business must pay out to make its products and

provide its services

Profit: The amount of money left over after a business records all its

revenues and subtracts all its expenses

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Business Must be ProductiveBusiness Must be Productive

Productivity: The ratio of goods and services provided to

resources used.

Productivity: The ratio of goods and services provided to

resources used.

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Customers can: Be individuals or other businesses Be one-time buyers or repeat buyers Spend a little or spend a lot of money Be located next door or 1000 miles away Order face-to-face or order or by mail or Internet

The key to business profits is satisfying customer needs over time!

Meeting Customer NeedsMeeting Customer Needs

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Keys to Meeting Customer NeedsKeys to Meeting Customer Needs

Customer Sensitivity The awareness of customer

desires and needs. Customer Service

Business actions taken to meet customer needs and preferences.

Timeliness Taking action for the

consumer - the “first-comer advantage.”

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Building Quality Products and ServicesBuilding Quality Products and Services

Businesses must focus on the quality and value of their products and services using:

Quality Management How a company addresses their

quality

Continuous Improvement Efforts to provide steadily higher

quality throughout all phases of operations

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Providing Excellence in Products and ServicesProviding Excellence in Products and Services

Thinking StrategicallyThinking Strategically

Acquiring and Using ResourcesAcquiring and Using Resources

Enhancing Value Through Communicating with CustomersEnhancing Value Through Communicating with Customers

Integrating Activities and Encouraging CommitmentIntegrating Activities and Encouraging Commitment

Providing Value Through Quality Products and ServicesProviding Value Through Quality Products and Services

Using Technology in a Competitive Environment Using Technology in a Competitive Environment

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The Use of Technology is a Key Issue of Contemporary ManagementThe Use of Technology is a Key Issue of Contemporary Management

Information Technology

Information Technology

Production Technology

Production Technology

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Encouraging Innovation and CreativityEncouraging Innovation and Creativity

In today’s volatile business, the only

constant is change!

Creativity: New and different

patterns of thinking and behaving.

Innovation: New approaches and

options that are the result of creative activities.

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A New Business TrendA New Business Trend

The Learning Organization: Organizations that adapt to change and creatively

search for new and better ways to operate and meet the needs of their employees and customers. Highly proactive Ripe with creativity More likely to produce useful innovations A healthy organization

The Learning Organization: Organizations that adapt to change and creatively

search for new and better ways to operate and meet the needs of their employees and customers. Highly proactive Ripe with creativity More likely to produce useful innovations A healthy organization

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

In a successful business, employees:

Care about the jobs they do Are proud of their work Feel commitment to their jobs and company Are dedicated and concerned Motivated to do the best jobs possible

In a successful business, employees:

Care about the jobs they do Are proud of their work Feel commitment to their jobs and company Are dedicated and concerned Motivated to do the best jobs possible

Gaining Employee CommitmentGaining Employee Commitment

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Keys to Gaining Employee CommitmentKeys to Gaining Employee Commitment

Empowerment - involvement in decision-making authority and responsibility

Company-supported training Creative benefits and work

options Full use of workforce talent Understanding and meeting

worker’s needs