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STRATEGIC MANAGEMENT (MGT 60703)
Student Name: LIM TING LE
Student ID No: 0320028
Lecturer: MR. LEONG BOON TIK
Date of Submission: 10/11/2016
Assignment title: PART A – Vision and mission
PART B – The 5 forces models
Word count: 5045 words

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Part A
In these recent decades, business area is getting bigger and bigger with the comparison of core
competency or other sustainable competitive advantages. Hence, the first step that we need to
take action to enter the business world is to set a future goals and current mission in order to set
the right direction for decision making process. In every business there will be a strategic analysis
and strategic planning before we want to enter to our business.
As the first paragraph stated, these future goals and current mission are so called as vision and
mission statement. Vision statement is very important because it is a step that setting an
organisation’s future direction so that when coming to decision making process, the top
management will select the right decision in order to match with the vision statement that they
stated before entering to this business. Without the vision statement, the top management might
make the wrong decision for the organisation because they don’t have the exact direction. In this
case, how does an organisation explain the vision and mission statement to their workers? Vision
and mission statement can be easily conveyed to his workers and managers if the organisation is
smaller. If the organisation is smaller in term of size and organisational structure, the amount of
workers are simplistic in managerial style which means the vision and mission statement could be
easily discharge without any problem. The employees and managers should be understand and
memorise the vision and mission that the organisation is heading to. However if the organisation
grow bigger, the way to convey the vision and mission statement to the workers would be harder
than smaller organisation. The vision and mission statements is designed and written clearly to
make sure the employees and managers to understand what and how the direction should be
achieve.
Sometimes, vision and mission statement might be fail in the organisation too. To avoid this
situation happens, landing a vision is very important that helps employees see the big picture,
showing them the way to getting there and allowing them to live it. Explain the ‘ways of working’
and the ‘what’s it in for us and you’ perspectives. Give examples of work that the organization
currently does which relates to the vision. Break down the vision into easy and digestible parts.
Give employees ways to explain the vision in short hand. Ask them to specify how they will live
the vision using statements like ‘In my daily work I need to do the following to live the vision’ or
‘Things I expect others to do to make it come together’.

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VISION STATEMENT
An inspirational statement which an organisation would like to achieve or accomplish in future
and long-term goal. It invented to improve the decision making process and provide a clear guide
to the workers.
About A Vision statement outlines WHERE you want to be. Communicates both the
purpose and values of your business
Answer It answers the question, “Where do we aim to be?”
Time A vision statement talks about your future.
Function It lists where you see yourself some years from now. It inspires you to give
your best. It shapes your understanding of why you are working here.
Change As your organisation evolves, you might feel tempted to change your vision.
However, mission or vision statements explain your organisation's foundation,
so change should be kept to a minimum.
Developing a
statement
Where do we want to be going forward? When do we want to reach that stage?
How do we want to do it?
Features of an
effective
statement
Clarity and lack of ambiguity: Describing a bright future (hope); Memorable
and engaging expression; realistic aspirations, achievable; alignment with
organisational values and culture.

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EXAMPLES OF VISION STATEMENTS
Mac Donald: Our overall vision is for McDonald’s to become a modern, progressive burger
company delivering a contemporary customer experience.
Google: to provide access to the world’s information in one click.
Amazon: to build a place where people can come to find and discover anything that they might
want to buy online
IKEA: to create a better everyday life for the many people.
Nike: To bring inspiration and innovation to every athlete in the world
San Diego Zoo: To become a world leader at connecting people to wildlife and conservation
Disney: we create happiness by providing the finest environment for people of all ages,
everywhere.
Wikipedia: Imagine a world in which every single person is given free access to the sum of all
human knowledge.
Starbucks: to establish Starbucks as the most recognised and respected brand in the world
World Vision: For every child, life in all its fullness; Our prayer for every heart, the will to make
it so
Teach for America: One day, all children in this nation will have the opportunity to attain an
excellent education.

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MISSION STATEMENT
A good mission statement should be clear, concise and memorable in order to inspire workers and
managers. A written declaration of an organisation’s core purpose and focus that normally
remains unchanged over time.
 Serve as filters to separate what is important from WHAT is not
 Clearly state which markets will be served and HOW.
 COMMUNICATE a sense of intended direction to the entire organisation
About A Mission statement talks about HOW you will get to where you want to
be. Defines the purpose and primary objectives related to your customer
needs and team values.
Answer It answers the question, “What do we do? What makes us different?”
Time A mission statement talks about the present leading to its future.
Function It lists the broad goals for which the organisation is formed. Its prime
function is internal; to define the key measure or measures of the
organisation's success and its prime audience is the leadership, team and
stockholders.
Change Your mission statement may change, but it should still tie back to your
core values, customer needs and vision.
Developing a
statement
What do we do today? For whom do we do it? What is the benefit? In
other words, Why we do what we do? What, For Whom and Why?
Features of an
effective statement
Purpose and values of the organisation: Who are the organisation's main
"clients"? What are the responsibilities of the organisation towards the
clients?

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EXAMPLES OF MISSION STATEMENTS
Cola-cola: to refresh the world in mind, body and spirit. To create value and make difference
Google: to organize the world’s information and make it universally accessible and useful.
E-bay: to provide a global trading platform where practically anyone can trade practically
anything.
Facebook: To give people the power to share and make the world more open and connected
Invisible Children: To bring a permanent end to LRA atrocities.
Public Broadcasting System (PBS): To create content that educates, informs and inspires.
Mac Donald: to be our customer’s favourite place and the way to eat and drink.
National Wildlife Federation: Inspiring Americans to protect wildlife for our children’s future.
Twitter: To give everyone the power to create and share idea and information instantly, without
barriers.
Oxfam: To create lasting solutions to poverty, hunger, and social injustice.
Environmental Defense Fund: To preserve the natural systems on which all life depends.

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MICROSOFT CORPORATION
In the computer technology’s world, Microsoft Corporation is a successful organisation as a
global computer technology company. Of course, vision and mission statement are needed to
achieve the goal. The vision statement is basically all about development of the business toward a
desired future condition. Therefore, Microsoft’s vision statement is directly point toward the
ability of the company for individual and also organisational customers. On other hand,
Microsoft’s mission statement generate strategic and current task to grow the business.
Microsoft’s mission statement is the current task to empower its customers. In the company,
Microsoft’s mission is strongly aligned with the vision statement.
Why visions fail
Leaders who deride visions can’t improve their organisation in any remarkable way.
For example, when Louis Gerstner Jr. became CEO of IBM in 1993, the company was in deep
red with annual net losses of $8bn. Yet Gerstner was quoted as saying: “The last thing IBM needs
is a vision.” But within two years, he changed that view and embarked on a vision trip that led
IBM into a network computing service. Soon, the company was recording 20% annual growth in
the new venture. Note, however, that without vision Gerstner didn’t turn the tide for IBM. But
when he developed, clarified, shared and launched a vision, the company revived. Yes, visioning
is an indispensable function of leadership; but visions sometimes fail to materialise. As a forecast
of the future, a vision requires that certain factors be shut out to give the vision chance to mature
and materialise. The realisation of a vision isn’t automatic. You may have a mental picture of
remarkable development for your organisation and its people. But if you ignore the effect that
certain intervening variables may have on your vision, the vision may turn out to be wishful
thinking. Giving the factors the chance to act is the reason why some visions fail to “click”.
I call the factors inhibitors. They may strike at three stages in the visioning process: between the
vision’s formation and action; between action and mission; and between mission activities and
full realisation of the vision’s goals (destination). I will treat each inhibitor separately.

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Vision statement
“to help individuals and businesses realize their full potential.”
Microsoft’s vision statement has the following significant components:
 Individuals and businesses
 Help realize
 Full potential
The first component of the vision statement clearly defines Microsoft’s target market. For
example, instead of selling software products to individual customers only, the company also sells
its products to organizations. The second component of Microsoft’s corporate vision statement
shows what the business intends to do. For instance, the company aims to provide products that
assist customers toward the achievement of their full potential, which is specified in the third
component of the corporate vision. Thus, Microsoft’s vision statement presents the target market,
what the company’s technology products do, and what customers can achieve through such
products.
Mission statement
“to empower every person and every organization on the planet to achieve more.”
The following components are significant in Microsoft’s mission statement:
 Empower
 Every person and every organization on the planet
 To achieve more
The first component of the corporate mission shows what Microsoft’s products can do for
customers. For example, such empowerment can take the form of speedy processing in offices and
enhanced information access in homes. The second component of Microsoft’s mission statement
specifies the target market, which in this case involves all individuals and organizations
worldwide. The company’s mission statement also specifies that its computer technology and
software products benefit customers in terms of achieving more. Thus, Microsoft’s mission

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statement is highly similar to the company’s vision statement, although the corporate mission puts
more emphasis on the practical benefit of achieving more.
IMPROVEMENT OF VISION AND MISSION STATEMENT
“to help people and organizations understand their maximum capacity.”
Microsoft’s vision statement shows the company’s target market and product value. However,
the vision statement is lacking in details to effectively guide the organisation’s development. In
my opinion, vision statement must include a detail direction toward the future condition or a
future goal of the company. In this case, the corporate vision does not contain such details. Thus,
as an advice or recommendation, the company have to study its own vision statement to include
information about where the business is heading to. For an example, Microsoft’s vision statement
must present information that about its target market. Leadership for a spec ific set of computer
technology and software products. Microsoft’s mission statement presents the global market
scope of the business and a general idea about the benefit of the business to its customers.
However, such information is still not clearly defined to represent the business. Mission
statements must provide a general idea about the strategic direction of the business, or about what
the organization wants to achieve. In this case, Microsoft’s corporate mission needs improvement.
As a recommendation, the company can improve its mission statement by including how the
organization will achieve its corporate vision. For example, in terms of growing its computer
technology and software business, Microsoft can specify rapid innovation in computing networks
and related products. Also, to improve the mission statement, information about Microsoft’s
generic strategy may be included.
HOW TO WRITE AN EFFECTIVE MISSION AND VISION STATEMENT
Vision statement Mission statement
find the human value in your work develop your winning idea
distill into values clarify your goal
combine your mission and value

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Part B
Executive summary
In my research, in 1979, a young associate professor at Harvard Business School distributed his
first article for HBR, “How Competitive Forces Shape Strategy.” In the years that followed,
Michael Porter’s explication of the five forces that determine the long-run profitability of any
industry has shaped a generation of academic research and business practice. Porter undertakes a
thorough reaffirmation and extension of his classic work of strategy formulation, which includes
substantial new sections showing how to put the five forces analysis into practice.
The five forces govern the profit structure of an industry by determining how the economic value
it creates is apportioned. That value may be drained away through the rivalry among existing
competitors, of course, but it can also be bargained away through the power of suppliers or
the power of customers or be constrained by the threat of new entrants or the threat of substitutes.
Strategy can be viewed as building defenses against the competitive forces or as finding a
position in an industry where the forces are weaker. Changes in the strength of the forces signal
changes in the competitive landscape critical to ongoing strategy formulation.
In exploring the implications of the five forces framework, Porter explains why a fast-growing
industry is not always a profitable one, how eliminating today’s competitors through mergers and
acquisitions can reduce an industry’s profit potential, how government policies play a role by
changing the relative strength of the forces, and how to use the forces to understand
complements. He then shows how a company can influence the key forces in its industry to create
a more favorable structure for itself or to expand the pie altogether. The five forces
reveal why industry profitability is what it is. Only by understanding them can a company
incorporate industry conditions into strategy.

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Assume that I’m in charging the company ABC that’s competing with YTL in the same
industry. The 5 forces models which are barriers to entry, rivalry among existing firms, buyer
bargaining power, supplier bargaining power and availability of substitutes will be used by me if
I’m the person in charge of this construction company in Malaysia. For my research, I realised
that mostly but not all larger developer that doing the properties of industry doesn’t work alone
but normally they will merge will other industries such as water park, hospitality, residence,
commercial, green technology building and so on. For me these are the core competitive
advantages as a construction company. Therefore, 5 forces model is needed in order to have
enough strength to compete with other construction company such as YTL.
Firstly, I would like to explain about the threat of new entry generally. This force shows
the factor of enter a particular industry. Economy of scale might be occurred if time and money
are sacrificed to enter your market and compete effectively, power is also affected by the ability
of people to enter your market. If there are few economies of scale in place, or if you have little
protection for your key technologies, then new competitors can quickly enter your market and
weaken your position. If you have strong and durable barriers to entry, then you can preserve a
favorable position and take fair advantage of it. When the economics of scale is bigger, there will
be greater market to enter property development industry and making more profit. Threat of new
entrants is high when:
 Low amount of capital is required to enter a market;
 Existing companies can do little to retaliate;
 Existing firms do not possess patents, trademarks or do not have established brand
reputation;
 There is no government regulation;
 Customer switching costs are low (it doesn’t cost a lot of money for a firm to switch to
other industries);
 There is low customer loyalty;
 Products are nearly identical;
 Economies of scale can be easily achieved.

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In construction industry, the treat of new entry is low because it is recognised that the
construction industry is in the main and confirmed competition from the published companies.
For my company ABC, I will analyse my economy of scale and huge amount of capital to enter to
this industry. Companies require manpower resources, plant and equipment, health and safety
procedures and various insurances to be in place together with an established track record to be
able to even bid for work in the important sector to develop roads, bridges, ports, airports which
form the infrastructure of a nation and cannot be handled lightly. In this industries, the
requirements that lead the barriers to entry to the construction market resulting a competition no
from the international companies but being challenge with existing local companies. All of these
because of the client and contractor will focus on lower bids and cheapest, and a better quality
tenders, therefore the new entrants might be very high as the contractors would prefer lower cost
as compare to other tenders from other companies. Besides, a new company would have lesser
certifications awarded by the various ISO organizations such as MS (Malaysian Standards) and
BS (British Standards). This would definitely affect the company's chances of winning the tender
for a project. A new company may hard to gain the buyers' trust. For example, a condominium
constructed by IJM will definitely gather greater buyer confidence as compared to a new
company.
Barrier of new Entrants: Weak
 Customers are not very loyal, the lowest bid always wins
 Low switching costs as new projects means new consultants, contractors and suppliers
 Capital requirements for property development are high
 The construction industry is highly risky and filled with uncertainty
 Access to inputs such as skilled labour is difficul
Secondly, I will explain about the buyer bargaining power generally. The buyer
bargaining power is high which the buyer have the power to demand lower price or higher
product quality from the industries. In this model, the lower the price of a product means the
lower the revenue the industry will earn, while higher quality products usually increase
production costs. Again, this is driven by the number of buyers, the importance of each individual
buyer to your business, the cost to them of switching from your products and services to those of
someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate
terms to you. Buyers exert strong bargaining power when:
 Buying in large quantities or control many access points to the final customer

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 Only few buyers exist
 Switching costs to other supplier are low
 They threaten to backward integrate
 There are many substitutes
 Buyers are price sensitive
In construction industry, the buyer bargaining power is very strong. In my research,
Malaysia property’s sale is getting lower year by year. This created demand for the buyers to
choose the property with comparing the price. This is because Malaysia is having several
developers that comparing the price that makes the buyer bargaining power strong. However, not
only the price will affect the demand of the buyer but the location and facilities will affect the
demand of the buyer too. For example, the buyer will surely choose the property (residential) that
surrounded by the commercial building or hospital and so on. As an investor, they will also
purchase the property that located at the perfect location with which higher demand of the buyer.
This is helps the investor increase the speed of returns too. However, if the customer is the
government, or the one that brings the greatest demand in the infrastructure sector, its ability to
assert pressure on the price is high as they buy undifferentiated products also price will largely be
based on the quality provided and will not be agreed to blind folded by the government. In my
opinion, I will choose a perfect location to start up my first project for ABC because the main
factor of the strong buyer bargaining power is the location of the property. Other that location,
there is one more important factor which is reputation of the company. In Malaysia IJM have
loyalty customer due to the sustainable reputation in this industry. For example, IJM had built
High-rise buildings and landmark, such as World-class Mid Valley Megamall, Berjaya Hotel and
Beach Resorts in Mauritius and Port Klang Power Station.
Buyers Bargaining: Strong
 Construction developers have a high quality of information for decision making
 There are few developers and construction clients compared to the many service
providers available to deliver project
 There has been a decline in the developers and client’s demand for construction projects
 Developers and clients have the ability to postpone projects until a later stage when they
can secure lower costs of building
Next, I will explain about the competitive rivalry generally. The competitive rivalry is
basically the number and capability of your competitors. If you have many competitors, and they

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offer equally attractive products and services, then you'll most likely have little power in the
situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you.
On the other hand, if no-one else can do what you do, then you can often have tremendous
strength. Rivalry among competitors is intense when:
 There are many competitors;
 Exit barriers are high;
 Industry of growth is slow or negative;
 Products are not differentiated and can be easily substituted;
 Competitors are of equal size;
 Low customer loyalty.
In construction industry, the rivalry among the existing competitors is very strong. In
Malaysia, there a some developer company that already completed some awesome projects such
as IOI Properties Group Berhad, Eco World Development Group Berhad, Gamuda Land, IJM
Land Berhad, Mah Sing Group Berhad, Naza TTDI Sdn Bhd, SP Setia Berhad, Sunway Berhad,
Tropicana Corporation Berhad, United Malayan Land Berhad (UMLand). As I already explained
above, construction sector is very competitive amongst the existing firms. With the system of
awarding tenders to the lowest bidder, the competition increases manifold. Also, in segments of
non-residence, infrastructure etc., onus is on the established firm to meet the standards as laid
won by the government. The competition is fierce within the construction industry as many
projects available are given on a tender basis or contract basis. Only company with the best offer
will get the project and once the project is awarded, the terms of the contract may include further
cooperation. Therefore, the company need to offer high quality work with lower fee. As I stated
that there are too many developer competing each other in Malaysia in term of price, core
competency and so on. In my opinion, even though the competitive in this industry is very high, i
will determine the core competency and my reputation for my company ABC. The location and
quality of my construction work must be the best among those competitors because the
competitive advantage provided by the leading firm can be easily counteracted by the
competitors.
Industry Competitors: Strong

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 There has been a fall in demand for construction projects and this has resulted inexcess
capacity
 Construction companies are mostly involved in submitting competitive tenders to win
contracts
 Quantity surveying firms also have to compete amongst one another by offering the
lowest fees for services provided to secure clients.
 Construction products are very similar and are delivered by means of projects with
variation amongst retail, residential and leisure.
 Overcrowded market dominated by the big five construction companies as well as major
Q.S firms.
Besides that, I will explain about the bargaining power of suppliers generally. The
bargaining power of the suppliers is basically how easy it is for suppliers to drive up prices. This
is driven by the number of suppliers of each key input, the uniqueness of their product or service,
their strength and control over you, the cost of switching from one to another, and so on. The
fewer the supplier choices you have, and the more you need suppliers' help, the more powerful
your suppliers are. This directly affects the buying firms’ profits because it has to pay more for
materials. Suppliers Bargaining power is weak when:
 Industry members such as the principal contractors’ e.g Grinaker are integrating
backwards into the business of suppliers
 Construction materials are readily available from many suppliers
 Switching costs of contractors Q.S firms are low
 Contractors, sub-contractors and manufacturers have to work together for successful
delivery of the project
In construction industry, the bargaining power of suppliers is very strong. The
bargaining power of supplier is very strong because there are limited suppliers in Malaysia.
Assume that I’m the person who in charge of company ABC, I will find the suppliers for pilling,
excavation, material, steel, machinery and so on. But in Malaysia, the number of suppliers is very
low which the suppliers can control the price. The constantly rising input prices and the acute
labour shortages in the construction industry lead to a very high power in the hands of the
suppliers to affect the price. The same surveys point to the need to hinge on project management,
mechanization and pre advanced technology to handle the situation. This factor entails
Completion risk, i.e. the risk of non-completion of projects on time due to reasons like shortage
of skilled labour, Price Risk which basically is the prices of the inputs like cement, steel,

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aluminium adversely escalating and ultimately resource risk, i.e. the risk of non-availability of
these materials owing to their shortage due to their non-renewable character or the years taken to
generate.
Bargaining power of suppliers: Strong
 There are few suppliers but many buyers;
 Suppliers are large and threaten to forward integrate;
 Few substitute raw materials exist;
 Suppliers hold scarce resources;
 Cost of switching raw materials is especially high.
Last but not least, I would like to explain about the threat of substitution generally.
The threat of substitution is basically affected by the ability of your customers to find a
different way of doing what you do. For example, if you supply a unique software
product that automates an important process, people may substitute by doing the process
manually or by outsourcing it. If substitution is easy and substitution is viable, then this
weakens your power. These are the factor that might affect the threat of substitution:
 Number of substitutes
 Performance of substitutes
 Cost of changing
In construction industry, the threat of substitution is high. In Malaysia, the
construction industry have a threat of substitution of site-based infrastructure construction
activities although the future may see an increase in the prefabrication of buildings or any
factor based building techniques. Also, it is clearly stated that the sence that infrastructure
in terms of airport, railways cannot be substituted by means of any substitute products or
services. Neither can a demand for a house be substituted with its substitute good. Also in
term of the inputs being used in the industry, the same cannot be substituted very esily as
compromising on the quality of the materials being used will ultimately affect the
foundation of the very construction which may become very likely to collapse on account
of substandard material that has been used. In my opinion, company ABC should select
the best location for the development and the best quality in term to minimize the threat
of substitution in this market. For example, this industry is highly competitive if the
products are easily substituted by other alternatives. However, this is not the situation

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within the construction industry. Buildings, roads, tunnels and bridges cannot be
substituted easily by other products. Therefore, the development of substitute products is
not a problem for IJM.
Substitutes: Strong
 New and emerging innovative methods and processes within construction industry
 New innovative methods are at lower cost than traditional methods
 Low switching costs once a project is complete, new consultants may be appointed
CONCLUSION
In conclusion, company ABC will develop a new and emerging innovative methods and
processes within construction industry because the substitution is strong. In order to encounter the
strong industry competitor, company ABC must provide a quality tender document in order to
win the contract or project. In my opinion, company ABC must select the perfect location to start
the construction because most of the demand are from the perfect location properties. In
additional, perfect location also means that company ABC have to select the development area
which all the facilities are nearby such as hospital, education area, and commercial area and so on.
REFERENCES

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 Babnik, K., Breznik, K., Dermol, V., & Trunk Sirca, N. (2014). The mission statement:
organisational culture perspective. Industrial Management & Data Systems, 114(4),
612-627.
 Ekpe, E. O., Eneh, S. I., & Inyang, B. J. (2015). Leveraging Organizational
Performance through Effective Mission Statement. International Business
Research, 8(9), 135.
 Grünig, R., & Kühn, R. (2015). Stakeholder Analysis and Revising the Mission
Statement. In The Strategy Planning Process (pp. 77-83). Springer Berlin Heidelberg.
 King, D. L., Case, C. J., & Premo, K. M. (2014). Does Company Size Affect Mission
Statement Content? Academy of Strategic Management Journal, 13(1), 21.
 Kirkpatrick, S. (2016). Build a Better Vision Statement: Extending Research with
Practical Advice. Rowman & Littlefield.
 Microsoft Corporation, Form 10-K.
 Williams Jr., R.I., Morrell, D.L., & Mullane, J.V. (2014). Reinvigorating the mission
statement through top management commitment. Management Decision, 52(3), 446-
459.

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