Crafting Executing Strategy
Q: Importance of a strategic plan to the success of a business
From both the macro and micro view of business, a strategic plan is regarded as a crucial tool. In this modern age, business is conducted in a global marketplace, which experiences rapid and unprecedented change. The explosive growth occasioned by the Internet and technology has bridged the distance and time gaps that existed between nations. In previous times, strategic planning was considered an undertaking for big corporations (Abrams, 2003). The modern day marketplace has forced a paradigm shift necessitating the creation and execution of stellar strategic plans by managers of both small and large entities.
The success of a business rests in the ability of its leaders knowing exactly where the business is headed. A company’s strategic plan comprises its mission, vision, and out-of-the-box thinking and it describes or outlines exactly what the company wishes to achieve or where it hopes to go (Simerson, 2011). The strategic plan entails the dreams and aspirations of the owner(s) of a business as regards the success of the business. This plan creates the picture of the accomplished goal.
A strategic plan is important as it helps various people within an organization to align themselves with the goals set for the organization. The plan is instrumental is setting the standards expected of all employees. The plan enhances productive communication, and morale between and among the employees. The business owners and managers are benefitted by strategic planning to the extent that they can forge stellar business strategy.
Q: Mission Statement and its importance to success of the company
Mission statement for Shell Refining Company (SRC)
To transfer value to stakeholders by:
- Offering refined oil products that respond to the needs of our clientele.
- Striving to raise the bar on operational excellence
- Carrying out our business in a profitable, sustainable, and eco-friendly
- Engaging and employing a team of self-driven, team-oriented team to deliver on the goals of the corporation.
A mission statement explains the reason as to why a company exists. It is charged with the responsibility of defining the actions of an entity. Mission statements are cornerstones of both to profit and not-to-profit organizations. A stellar mission statement captures and mirrors the intentions of an organization. Such a mission statement incorporates the needs of all stakeholders of the company. As revealed by the mission statement for shell, the needs of different stakeholders have been capture in the 4-points mission statement.
Once penned down, a mission statement becomes bedrock upon which crucial documents such as the organizational chart, marketing plans, policy and procedure statements, compensation plans, and product lines are founded. The mission statement maps out the direction that the managers will take in managing and driving the company towards success. From the mission statement outlined above, the management of Shell Refinery Company will consolidate their efforts towards giving value to their stakeholders (Bush, & Johnston, 1998). This will see them employ qualified staff, enforce and promote environment friendly practices, and do value addition on most of its products. All these will contribute towards the success of company.
Q: Company’s Vision and How it Supports the Mission Statement
Vision statement for Shell Refining Company (SRC)
Shell aims at becoming a global leader in the refinery business
The vision statement is important as it communicates an entity’s goals both to internal and external stakeholders. A good vision statement should be both inspirational and aspirational i.e. it should inspire employees to contribute their efforts towards the meeting of the vision while at the same time communicating to the financers of the company of the company’s short, mid, and long-term goals. Vision statements need not be specific; they can be general in wording and it is from these that mission statements are fashioned (Clegg, 2011). The vision presents the big picture of the finished goal at the horizon. It guides the business and energizes the stakeholders. A strategic vision aligns the management’s hopes and aspirations for the business giving a sneak peak of where the organization is going. Looking at Shell’s strategic vision, the company aims at becoming a global leader in the refinery industry. Shell’s mission statement comes in to map the direction the company will take to achieve the desired vision.
Q: Objectives of Shell Refinery Company (SRC)
Shell Refinery Company is committed to setting the standards in the refinery industry by focusing attention on the following objectives:
- Social impact objectives
These measure the social strength or impact of the mission statement and include:
- Benefit the shareholders
- Harness the potential in the staff
- Meet and exceed customer expectation
- Achieve double digits growth in refinery margins
- Ensure that the assets are safeguarded with integrity
- Work on reducing structural cost reductions over time
- Maintain and sustain a strong management system
- Afford a sustainable healthy, safe, secure, and environmental friendly working environment to the workers.
- Financial impact objectives- this objective helps HOC to streamline its business component to the mission statement and measure the viability of HOC’s financial bottom line. The parameters measured include:
- Cost recovery- this parameter gauges SRC’s ability to cover its costs through the income it generates. It is expressed as a percentage of the costs covered by income generated in a particular period. For ensample, a 45% cost recovery alludes to the fact that 45 % of the total costs is covered by 45% of the total revenue while the remaining 55% is covered by other subsidies.
- Net profit or loss- This parameter measures the profitability of SRC through the financial bottom line with net positive figure indicating profit while net negative figure indicating loss. This parameter is used to test the market and gauge the probability of success in the refinery industry.
- Cost efficiency- this parameter measures SRC’s ability to offer its services at decreasing cost over some time. SRC’s cost efficiency is low at the formative years of its operations. This is occasioned by the high cost of capital, a characteristic of businesses in the refinery industry.
Q: How Objectives Support Mission and Vision of HOC
The vision of SRC seeks to establish the company as a global leader in the refinery industry. The Mission statement outlines how the vision will be achieved. The objectives discussed above, both social and financial outlines how the mission will be conducted and driven towards meeting the strategic vision of the company. This will in essence ensure that all players in the company focus their attention towards meeting each objective and by so doing fulfil both the mission and vision of the company.
Abrams, R. M. (2003). The successful business plan: Secrets & strategies. Palo Alto, Calif: The Planning Shop.
Bush, J., & Johnston, D. (1998). International oil company financial management in nontechnical language. Tulsa, Okla: PennWell.
Clegg, S. (2011). Strategy: Theory & practice. Los Angeles: Sage.
Simerson, B. K. (2011). Strategic planning: A practical guide to strategy formulation and execution. Santa Barbara, Calif: Praeger.
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