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When we are talking about business strategy many times we use the following strategic concepts: values, mission, vision, strategic objectives, strategy, and business policies. Those strategic concepts can be sorted into present and future focus on. Thus, values, mission and policies are very much focus on the present/today (the current situation), and vision and strategy build the company future. In the case of objectives, there are short-term and long-term (more than one year).
From the turnaround prospect, it is more important present than future because if we do not quickly solve the current problems, there will not be any future. Therefore, business strategy in turnaround should be prioritized short-term strategic concepts. This is going to offer us the actual strategic status of the company.
The main strategic concept related to the present is mission that is going to answer questions like: What do we do? or What is our business?
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Mission: If we ask the Managing Committee the six basic questions for Mission Definition (and the answers match with the reality), we would probably discover any of the following problems:
- Market: Selling to companies of many different industries, sizes, and so on. So there is not any customer segmentation strategy, or it is not properly implemented and controlled it. In those situations, firms used to be more focus on sales than profitability. Perhaps we have some unprofitable customers that erode the profit generated for the rest of the customers.
- Product: Selling with important price discounts even if the company does not enjoy an important cost advantage compared with his competitors. That discount affect importantly to bottom line. Usually those situations come when we do not understand our own value proposition for customers, and obviously we are not able to sell value. We have to highlight that failing to define our market segmentation, or using a passive sell strategy (waiting for customers calls rather than “hunting” customers) in industrial markets push organizations to reduce prices to close sales.
- Capabilities: When we do not understand how to create value for customers, we invest in the wrong capabilities in the medium and long-term and that could jeopardize our competitive advantage. Without a competitive advantage, firms used to reduce prices/margins to maintain sales.
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