1. VISION STATEMENT
What can support you to stay inspired and on the right track when
starting out? You guessedit! It’s thevision statement.
A vision statement is like a photograph of yourfuturebusiness, which
gives your business shapeand direction. A vision statement provides
thedirection and describes what thefounder wants theorganization to
achieve in the future; it’s more about the“what” of abusiness. You
need to have a crystal clear vision when you start out, otherwiseyou can
get easily lost in deciding the best way forward. When you are making
strategicdecisions for your business andeven daily operation decisions,
your vision statement willgive you theinspiration and targeted
direction you need. Without avision statement, yourbusiness willlack
motivation to keep going. Themore specific and clear you are, the
better yourchances are at seeing yourvision turn into reality.
Why is vision statement so important?
Theimportance of avision statement cannot beoverlooked; not only
does it provide long term direction andguidance, but it also supplies
inspiration for daily operation for thecompany andmotivation for
strategicdecisions.
Characteristics of a vision statement.
Does itdescribe whatyoudo? If so, it shouldn’t. Thevision statement
is not an opportunity to usecreative, colorful language to describe the
operations or activities of theorganization. It shoulddescribe the
2. resultant experience or outcome. Too many organizations get caught
up explaining how they work. Instead, focus on the subsequent
outcomes afterthe workis done.
Has it gone beyondsimple? Is it over-engineered? Haveyou literally
beaten all the ‘simple’ out of it with yourbusiness acumen? If so, stop.
Believe it ornot, there is an inverse relationship between the numberof
business buzzwords you useand theclarity yourvisions creates – a true
example of less being more. Rememberthe company that had this one:
“… a computeron every desk …”?
Is iteasy to recite/explain? Can you explain it to your friend that
DOESN’T workin your industry? If not, stop andre-think. For obvious
reasons, it is advantageous for thevision to be easily understoodby the
employees charged with making it a reality. However, you’vestruck
gold if thosesameemployees have internalized thevision so much so
that they can recite it on call. Even more powerfulis theimpression left
on thefriend when thevision is delivered with language they can
understand. Remember complicated ≠ effective.
Did yousleepon it? Unfortunately, vision crafting is not exempt from
thelaw of diminishing returns. If you thinkyou’ve got thevision
statement nailed, stop and sleep on it. When you comeback to it, do
you quickly re-connect with thesameenthusiasm you hadwhen you
first read it?
What makes a good vision statement?
Tip#1: Thebest vision statements areconcise, clear and inspiration.
Examples:
Google: ‘Toprovide access tothe world’s information in one click.’
Linkedin: ‘To create economic opportunity for every member of the global
workforce.’
3. Tip#2: Always keep yourvision statement aliveby revisiting it regularly
and communicating yourvision with other members of the team, to
inspire and motivatethem as well.
Tip#3: When trying to define thevision statement weshouldinclude
specific goals and objectives.
Goals help company define what they want to achieve.
By setting goals, managers commit themselves to a concrete course of
action that will allow them to accomplish the company’s vision.
An example of a vision statement that is not well thought out;
“We are a leadingmultinational corporation committed toenhancing
shareholder value andmaintaininglong-term sustainable growth in our
core businesses.”
~Genting Berhad
I do feel like an adverse effect when I read this statement. This vision
statement is too general and it’s hard to get too elevated about a
statement like that. A mobilizing statement dares you to be more than
mediocre. How much more powerfulit wouldbe if their statement was
something like: “Sustaining greatness through ourmany business
divisions.
MISSION STATEMENT.
A mission statement is thesoulof your business andmust not be
mistaken for a vision statement. Whilea vision statement conveys a
business’s optimal goal, amission statement provides an overview of
theplans put in place to realize the goal (vision) of thebusiness. A
mission statement provides clarity of purpose anddirection to your
startup both foryour customers andfor employees all in a few succinct
sentences. It is the driving force; the unseen anchor for everything else
that you do in yourbusiness.
Some of the most effectivemission statements definea business’s goals
in at least three categories:
1. What the business does for its customers, employees and
owners?
2. Why does the company exist?
4. 3. What is the fundamental reason for our
organization’s existence?
A well-written mission statement can bean effective marketing toolfor
any startup; it can lure or scare away potential customers. It is also a
perfect blend of realism and optimism –two terms conventionally in
disagreement with each other.
A good mission statement is vital. But do you know how to
create one? If you don’t, here are a few steps to review to
help you create an effective mission statement.
1. Define the good yourbusiness does for your customer.
Start your mission statement with yourcustomers in mind. Leverage
theinspiring story you came up with to figure out exactly how your
business benefits your target audience.
To make it easier, break it down by answering thequestions: what who
and why.
2. Define the benefitofyour business to your employees
Your employees are not left out in themission statement; they haveto
feel that they are part of a well-oiled machine working towards a
common good. If your employees are in syncwith the objectiveof your
company, you wouldhave created an environment that will foster
employee happiness and satisfaction.
So be sure to define what yourbusiness does for them. If you value
qualities such as fairness, diversity, creativity, innovation, and thelike,
make sureto put it on there. But remember to present it in a way that is
concrete and uniqueto your businesses.
5. 3. Define whatthe business does for you
You cannot shinethe light on others and not do thesamefor yourself.
You startedthe business so yourmission statement shouldalso reflect
thebenefit of thebusiness to you as well (andyour co-owners if there
are any).
Now weall want to makeprofits but that cannot – or shouldnot – be
theonly reason for establishing a startup. Let yourmission statement
show thebenefits to you – benefits that are beyond profit.
Do you valuebusiness growth aboveprofit? Are you happy working with
people you want to workwith?
Write that into yourmission statement.
4. Make sure itis a clear, understandable statement; nota novel
You might find your mission statement to betoo long when you are
overwhelmed with thewealth of information yourmission statement.
How do you know if it is too long? As a general rule, if you cannot be
done reading your mission statement in 30 seconds orunder, then it is
too long.
It is called a statement fora reason. You shouldbe working on finding a
way to fuse all this information into one smallhappy lump. Avoidthe
business long talk here. That is usually a consequence of not being
specific enough.
Also make sure yourstatement is jargon free. Not all customers will
understandyour‘industry talk’. Most are just looking for a solution to a
problem. So make sureyou avoid the jargon.
6. Lets take a look at how some large firms state their mission
statement
Some firms are very specific when stating theirmission statements and
clearly explain why the firm exist and what kind of services they offer.
Paypal: ‘Tobuild the Web’s mostconvenient, secure cost-effective
paymentsolution.’
Tesla: ‘To accelerate the adventof sustainable transportby bringing
compellingmass marketelectric carstomarketas soon as possible’
These both companies have a mission statement that is clear and laser focused. A
statement that isn’t ambiguous and straight to the point. It just states the company’s main
purpose.
Some companies states thebusiness strategies that theirorganization
follows. Forinstance Walmart and Ikea. They uses acost leadership
business strategy in their mission statement:
Walmart: ‘We save people money sothey can live better.’
Ikea: ‘.. Our business idea supports this vison by offeringa wide range of
well-designed, functional home furnishingproducts atprices solow that
as many people as possible willbe able toafford them.’
7. PART B
YTL CORPORATION BERHAD
YTL Corporation Berhad is an integratedinfrastructuredeveloper
with extensiveoperations in many countries.
8. Totalassets of RM71.3 billion (USD17.8 billion) (as at 30 June
2018).
Thecore businesses of theYTL Group comprise utilities,
construction contracting, cement manufacturing, property
development and investment, hoteldevelopment and
management, e-commerce initiatives and internet-based
education solutions andservices.
YTL Corp is amongst thelargest companies listed on Bursa
Malaysia Securities Berhad.
TheYTL Group is committedto producing world class products
and services at competitiveprices.
This corporate philosophy has enabled theYTL group to build up
a growing customerbaseof more than 12 million customers
globally over thelast 30 years.
ASSUMPTIONS ON ABC CONSTRUCTION
ABC construction is a company that is of thesame scale as YTL
Corporation Berhad.
It is basically the competitiverival for YTL Corporation Berhad
9. It is listed on theMain Board of Bursa Malaysia, is the leading
infrastructureand property developer with operations in Asia and
theMiddle East Regions.
Focusing on three core businesses in Engineering and
Construction, InfrastructureConcessions andProperty
Development
deliver numerous large-scale civil infrastructureprojects to-date.
Besides constantly challenging the status quo to go beyondour
boundaries in thedevelopments weconstruct,
ABC construction endeavors to enrich thecommunities by
positively changing the way people live andcontribute to nation
building through continuous education and training.
Ouremphasis on differentiation, value-creation and operational
excellence has enabled the Group to consistently deliver
distinctiveinfrastructureand homes bearing
ABC Construction is a hallmark of innovation, superior quality,
outstanding valueand on-timecompletion.
Porter’s Five Forces
ThePorter’s toolwill be used to analyze ABC Construction’s
attractiveness andlikely profitability. Since it’s publication in 1979, it has
become one of the most popularand highly regarded business strategy
tools. Porter recognized that organizations likely keep a close watch on
their rivals, but he encouraged them to look beyond the actions of their
competitors andexamine what otherfactors couldimpact thebusiness
environment. Heidentified five forces that makeup thecompetitive
environment, and which can erode yourprofitability. Theseare:
10. 1. Competitive Rivalry. Thislooks at thenumberand strength of your
competitors. How many rivals do you have? Who are they, andhow
does thequality of their products and services compare with yours?
Where rivalry is intense, companies can attract customers with
aggressive price cuts and high-impact marketing campaigns. Also, in
markets with lots of rivals, your suppliers andbuyers can go
elsewhere if they feel that they're not getting a gooddeal from you.
On the otherhand, where competitiverivalry is minimal, andno one
else is doing what you do, then you'll likely have tremendous
strength andhealthy profits.
2. Supplier Power. This is determinedby how easy it is for your
suppliers to increase their prices. How many potentialsuppliers do
you have? How uniqueis the product or service that they provide,
and how expensivewouldit be to switch from one supplier to
another?
11. Themore you have to choose from, the easier it will be to switch to a
cheaper alternative. But thefewer suppliers there are, and themore
you need their help, thestrongertheir position andtheir ability to
charge you more. That can impact your profit.
3. Buyer Power. Here, you askyourself how easy it is for buyers to drive
your prices down. How many buyers are there, and how big are their
orders? How much wouldit cost them to switch from your products
and services to thoseof a rival? Are yourbuyers strong enough to
dictate terms to you?
When you deal with only a few savvy customers, they havemore
power, but your powerincreases if you have many customers.
4. Threat ofSubstitution.This refers to thelikelihood of your
customers finding a different way of doing what you do. For
example, if you supply a uniquesoftwareproduct that automates an
important process, people may substituteit by doing the process
manually or by outsourcing it. A substitution that is easy andcheap
to make can weaken yourposition and threaten your profitability.
5. Threat ofNewEntry. Yourposition can beaffected by people's
ability to enteryour market. So, think about how easily this could be
done. How easy is it to get a footholdin yourindustry or market?
How much wouldit cost, and how tightly is your sectorregulated?
If it takes little money and effort to enter yourmarket and compete
effectively, or if you havelittle protection for yourkey technologies,
then rivals can quickly enter your market and weaken yourposition.
If you havestrong and durable barriers to entry, then you can
preserve a favorable position and take fair advantageof it.
12. COMPETITIVE STRATEGIES FOR ABC CONSTRUCTION
Competitive Rivalry (High)
If the rivalry among the existing players in an industry is intense then it
will drive down prices and decrease theoverall profitability of the
industry. ABCConstruction operates in a very competitiveHeavy
Construction industry. This competition does taketoll on theoverall
long term profitability of theorganization.
How ABCConstruction can tackle intenseRivalry among theExisting
Competitors in Heavy Construction industry?
-By building a sustainabledifferentiation
-By building scale so that it can competebetter
-Collaborating with competitors to increase themarket ---size rather
than just competing forsmall market.
ThreatofNewEntrants (Low)
Theconstruction Industry is very capital intensive. Thebrand names in
theconstruction industry are well known and well established, location
for most of thetop 100 construction firms is not an issueas they can
easily absorb thecosts of travelto win workand diversify their
portfolios in other countries. Profitability in the construction industry
relies heavily on theeconomies of scale. It does not offer much for
consumers switching costs andretaliation from the top 100 wouldbean
13. issuefor a new smaller firm that does not have the heavy capital
investments required. Regulatory approval and licensing is paramount
in this industry and it comes with high operational costs.
Smaller firms and businesses operateand do smaller jobs andcontracts.
They are sub-contractedfrom the larger construction firms and operate
in thelocal markets. They also offer product and service hires which can
prove profitable for them.
With larger firms having theintensive capital required, they are able to
bid lower than smaller firms andwin jobs.
New entrants in Heavy Construction brings innovation, new ways of
doing things andput pressure on ABC Construction through lower
pricing strategy, reducing costs, andproviding new value propositions
to the customers. ABCConstruction, Inc. has to manageall these
challenges andbuild effective barriers to safeguardits competitive
edge.
How ABCConstruction can tackle theThreats of New Entrants?
By building economies of scale so that it can lower thefixed cost
per unit.
Building capacities andspending money on research and
development. New entrants are less likely to enter a dynamic
industry where theestablished players such as ABC Construction
keep defining thestandards regularly. It significantly reduces the
window of extraordinary profits for the new firms thus discourage
new players in the industry.
14. Threats ofSubstitute Products or Services (Low)
ABC Construction produces property developments as their product
although develops infrastructure. Main focus wouldbe put on
residential development. Substitutes to residentialdevelopments are
high end residential and rental units.
How ABCConstruction Company can tackle theThreat of Substitute
Products /Services?
By understanding thecore need of the customerrather than what
thecustomeris buying.
By increasing the switching cost forthe customers.
BargainingPowerofBuyers (Medium)
Buyers are often a demanding lot. They want to buy thebest offerings
available by paying theminimum price as possible. This put pressureon
ABC Construction profitability in the long run. Thesmaller and more
powerfulthe customerbaseis of ABC Construction thehigher the
bargaining power of thecustomers andhigher their ability to seek
increasing discounts and offers.
How ABCConstruction can tackle theBargaining Powerof Buyers?
By building a large baseof customers. This willbe helpful in two
ways. It willreduce thebargaining powerof thebuyers plus it will
provide an opportunity to thefirm to streamline its sales and
production process.
By rapidly innovating new products. Customers often seek
discounts andofferings on established products so if ABC
Construction keep on coming up with new products then it can
limit thebargaining powerof buyers.
New products will also reduce the defection of existing customers
of ABCConstruction to its competitors.
BargainingPowerofSuppliers (Medium)
All most all thecompanies in theHeavy Construction industry buy their
raw material from numerous suppliers. Suppliers in dominant position
15. can decrease themargins ABC Construction can earn in themarket.
Powerfulsuppliers in IndustrialGoods sectoruse their negotiating
powerto extract higher prices from thefirms in Heavy Construction
field. Theoverall impact of higher supplier bargaining power is that it
lowers the overall profitability of Heavy Construction.
How ABCConstruction can tackle Bargaining Powerof theSuppliers
By building efficient supply chain with multiplesuppliers.
By experimenting with product designs using different materials
so that if the prices go up of one raw material then company can
shift to another.
Developing dedicated suppliers whosebusiness depends upon
thefirm.
Conclusion:ThecompetitiveadvantageforABC Construction is low in
theMalaysian Market.
SWOT ANALYSIS FOR ABC CONSTRUCTION
