Business / Value Of Mission Statements: Comparrison Of Whitbread And Headwater
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Autor: anton 13 July 2011
Words: 2134 | Pages: 9
A mission statement should focus on goals, clarify issues and outline visions and objectives. It should communicate the essence of the company to the employees, shareholders and to the public (Hassan, M 1988). Similar to this, Doyle (1998) points out, that a mission statement describes the purpose of the business and its essential characters.
A company without a mission statement is like the Cheshire Cat in Alice in Wonderland described; Ð²Ð‚ÑšIf you donÐ²Ð‚â„¢t know where youÐ²Ð‚â„¢re going, it doesnÐ²Ð‚â„¢t matter which way you go.Ð²Ð‚Ñœ
Most large corporations produce a Ð²Ð‚Ñšmission statementÐ²Ð‚Ñœ to give a clear indication of the fundamental aims of the organisation. Whitbread and Headwater are two of those who established a mission statement.
Since 1985, Headwater is in the business of soft adventure travelling which includes guided and independent walking, cycling, canoeing and cross-country skiing in a number of destinations throughout Europe. Its philosophy is to provide customers with a real insight into local life and culture apart from mainstream tourism. Headwater holidays employs 23 employees headquartered in Cheshire and more than 30 part time employees oversees.
Whitbread are a leading force in the UK's leisure industry employing more than 80,000 people and operating more than 6,000 pubs, restaurants, hotels, shops and leisure clubs. Whitbread employees serve up to 10 million customers every week, in major chains like Pizza Hut, Hogshead, Beefeater, Marriott Hotels or David Lloyd Leisure. Whitbread Plc is headquartered in London and achieved turnover (2000) of GBP 2,951.4 million (Hoover, 2001).
The author will examine both mission statements to take a closer look at the aims and how they seek to achieve them. Both companies have their core business in leisure activities in general and aspire to be the market leader. There is a strong marketing spin on both statements.
At Headwater, we recognise that being good is simply not enough. We need to be the best Ð²Ð‚â€œ anything short of this is not acceptable. All our staff, both in the UK and overseas are committed to one sole aim:
Ð²Ð‚ÑšTO BE THE UKÐ²Ð‚â„¢S LEADING SPECIALIST OPERATOR OF SOFT ADVENTURE HOLIDAYS IN EUROPE AND BEYONDÐ²Ð‚Ñœ
In order to achieve this, there are certain things we feel we need to deliver. These are summarised below. In short, we need:
Ð²Ð‚Ñž To provide comprehensively researched, designed and well thought out products which incorporate the very best that a destination has to offer
Ð²Ð‚Ñž To be the preferred UK tour operator in the eyes of our customers and suppliers
Ð²Ð‚Ñž To exceed customer expectations at all times
Ð²Ð‚Ñž To sustain and develop a knowledgeable, committed and enthusiastic team, both in the UK and overseas
Ð²Ð‚Ñž To work with our customers to continually improve our levels of service and quality in everything that we do
Our brands will be people's first choice when they want to enjoy themselves.
While making customers happy is a goal for most businesses, for us it is at the heart of everything we do. We listen to our customers, anticipate their needs and aim to deliver levels of service which are ahead of their expectations.
We recognise that to achieve leadership we must become the most efficient business in each market we serve, and manage all our activities so as to deliver faster, better and lower cost solutions. In this way, we will release resources so that we can continue to improve the quality and value of our brands and services and to support our people who are the key to long-term success.
Our most important task, therefore, is to create a positive working environment based on integrity, teamwork and respect in which everyone takes personal responsibility for what they do. Recognition, job satisfaction and pride will come from serving customers well.
When we succeed we will have created a company which is truly distinctive in the eyes of our customers and demonstrably better than our competitors. It will consistently outperform the market, generating improved rewards for our people and stronger returns for our shareholders.
Some parts of the two statements sound very similar. Headwater write Ð²Ð‚ÑšTo exceed customer expectations at all timesÐ²Ð‚Ñœ and Whitbread Ð²Ð‚ÑšWe listen to our customers, anticipate their needs and aim to deliver levels of service which are ahead of their expectationsÐ²Ð‚Ñœ. Both companies not only want to satisfy their customers, they want to exceed their expectations. Why is it so important?
Doyle (1998), explains as follows Ð²Ð‚ÑšCustomers can choose from whom they buy, and unless the firm satisfies them at least as well as competitors, sales and profit will quickly erode. More companies are putting at the top of their agenda winning and retaining customers via increasing customer satisfaction.Ð²Ð‚Ñœ In the statement of Whitbread it is additionally mentioned that they listen to their customers. Murray and OÐ²Ð‚â„¢Driscoll (1996) outline that it is a challenge to the producer to respond to customersÐ²Ð‚â„¢ needs, and competition between producers is based on their success in understanding and fulfilling those customersÐ²Ð‚â„¢ needs.
A second similarity is that both companies focus on their staff and working environment. For Whitbread it is the most important element. Teamwork seems to be a keyword in both statements. Is this coincidental?
Murray and OÐ²Ð‚â„¢Driscoll (1996) cite that if integrators and specialists are the building blocks of the successful marketing organisation, teams and teamwork are the binding mortar. While teamwork is important within each function and specialism, the distinguishing feature of the marked-focused organisation is the cross-functional teamwork, aligned with key business processes, which cut across departmental, and on occasion, business unit barriers Ð²Ð‚â€œ the Ð²Ð‚?silosÐ²Ð‚â„¢ which obstruct superior customer service.
Both corporations focus on customer service and quality improvements. Headwater states it intends, Ð²Ð‚ÑšTo work with our customers to continually improve our levels of service and quality in everything we doÐ²Ð‚Ñœ. WhitbreadÐ²Ð‚â„¢s is more verbose, but the content is similar Ð²Ð‚Ñš...that we can continue to improve the quality and value of our brands and services...Ð²Ð‚Ñœ. This means both companies do not stand still. They are not satisfied with the status they have achieved, they want to develop themselves and maintain close customer focus insofar as possible at all times.
Jobber and Lancaster (2000), describe that the key to success and profitable business rests with identifying the needs and wants of customers and providing products and services to satisfy these needs and wants. The main problem with selling the same unmodified product over its lifetime, is the product cycle. Wilson and Gilligan (1997) explain it as follows, firstly every product has a finite life. Secondly, during this life, they pass through a series of different stages, each of which poses different challenges to the seller. Thirdly, virtually all elements of the organisationÐ²Ð‚â„¢s strategy need to change as the product moves from one stage to another. Fourthly, the profit potential or products vary considerably from one stage to another. And finally, the demand upon management and the appropriateness of managerial styles also varies from stage to stage. To sum it up, corporations have to improve their products, services and management style continuously to stay profitable in future.
Another parallel between the mission statements is, that both companies want to be Ð²Ð‚ÑšpeopleÐ²Ð‚â„¢s first choiceÐ²Ð‚Ñœ,Ð²Ð‚Ñšthe UKÐ²Ð‚â„¢s leading specialistÐ²Ð‚Ñœ and Ð²Ð‚Ñšthe preferred UK tour operatorÐ²Ð‚Ñœ respectively. Being number one in the market must be a big competitive advantage.
Murray and OÐ²Ð‚â„¢Driscoll (1996) explain as follows, in many markets, share and profitability are directly linked. The bigger a companyÐ²Ð‚â„¢s share, the greater return of investment. The research indicates that companies ranking first in market share earn rates of return that are three times greater than businesses with market share ranking of fifth place or less. The general explanation of the phenomenon are the cost advantages of larger scale and greater experience compared to rival companies and its market power. Most times market leaders have a wide range of advantages starting from negotiating prices to imposition of terms and pricing guidelines among its channels of distribution.
Headwater stresses that its products should be comprehensively researched, designed and well thought. This seems to be a key issue for Headwater. Having a perfect product should lead to customer satisfaction. Jobber and Lancaster (2000), propound that product decisions are the most important of the marketing decisions which a company makes.
In addition to this, Headwater wants to be the very best, to be simply good is not enough. Its mission statement does not distinguish between what is good or best. It is a matter of opinion and is open to interpretation.
Whitbread sees long-term success in supporting their employees. Palmer and Hartley (1999) agree that caring for employees is often assessed by businesses in terms of the additional returns from a more productive workforce.
For Whitbread the result of their actions should be a company which is preferred by customers and ahead of their competitors. This may lead to Whitbread outperforming the market, to improve rewards for their employees and to have stronger dividends for their shareholders. To sum it up Ð²Ð‚â€œ everybody is pleased.
It is arguable whether mission statements really help a company to focus on its strategies or if it is only a good PR statement. In fact most companies which are listed on stock exchanges feel committed to present a mission statement. One reason might be to communicate their strategies to all their stakeholders another reason might be that all the other companies have one.
Doyle (1998), writes that a mission statement has four functions. First to motivate employees, second to provide a shared sense of purpose to people working in widely spread business units, third to give a direction by identifying markets and technologies, fourth to identify major policies in how to treat their stakeholders.
In HeadwatersÐ²Ð‚â„¢ mission statement most of these points are missing. Headquarter for example does not mention staff motivation at all. And their business is small (23 full time employees) so that DoylesÐ²Ð‚â„¢ second point is not relevant to them. As Headwater is not a listed company they do not focus on other stakeholders besides their customers. It is also questionable whether their mission statement provides a vision other than simply being the best.
Lynch (1997) outlines that mission statements should not have a lack of clarity. But what does Ð²Ð‚ÑšWe need to be the best ...Ð²Ð‚Ñœ mean? Best in shareholder value, in customer care, in staff motivation? The aim of being best is too imprecise. It is also questionable to primarily focus on their products. Undoubtedly, products are important and to have a good product is even better. But Jobber and Lancaster (2000) describe that there is more to commercial success than just having a perfect product at the perfect time. In fact many products which had a considerable market potential failed, because of poor promotional, pricing and distribution decisions (e.g. Sony Beta system, VCR).
It is arguable if the aim of Headwater to be the market leader is achievable or if it is just a wish of the managing director. It is a fact that the company increased their staff from 2 to 23 over the last 16 years. It is doubtful that this speed of expansion is fast enough in the future.
The mission statement of Whitbread is nice and neat and has most of the classic elements required. They speak of their aims, how they can achieve them, that staff is important and must be motivated, they want to satisfy their shareholders and everything is for the customer benefit. The question with this statement not is whether it is good, but whether it is too good. Is this really what Whitbread believe? Or is it just a well designed corporate statement for public use.
To investigate this statement, Whitbread state that the long-term success of their company is based on their employees. They are the key factor. In contrast to the statement, some employees may be uninformed about their futures. For example an employee asked in the open forum of WhitbreadsÐ²Ð‚â„¢ official website for answers. This indicates poor communication whereby decisions cannot be communicated from top to button. The staff do not seem so important in the light of this?
For an outsider it is very difficult to prove if a company really applies its mission statement or if it is just PR. In the case of Whitbread it is even more difficult because the company had changed its strategies drastically very recently. For Headwater, undoubtedly their mission statement leaves some room for improvement. It is too broad and not distinctive enough.
Doyle, P. (1998), Ð²Ð‚ÑšMarketing Management and StrategyÐ²Ð‚Ñœ 2nd edition, TJ International Ltd., Cornwall
Jobber and Lancaster (2000), Ð²Ð‚ÑšSelling and Selling ManagementÐ²Ð‚Ñœ, 5th edition, Pitman, London
Lynch, R. (1997), Ð²Ð‚ÑšCorporate StrategyÐ²Ð‚Ñœ, Aldersgate Consultancy Limited, Great Britain
Murray and OÐ²Ð‚â„¢Discoll, (1996), Ð²Ð‚ÑšStrategy and Process in MarketingÐ²Ð‚Ñœ, TJ International Ltd, Cornwall
Palmer and Hartley, (1999), Ð²Ð‚ÑšThe Business and Marketing EnvironmentÐ²Ð‚Ñœ, 3rd edition, Mc Graw-Hill Publishing Company, Berkshire
Wilson and Gilligan, (1998), Ð²Ð‚ÑšStrategic Marketing ManagementÐ²Ð‚Ñœ, 2nd edition, Butterwoth Heinemann, Oxford
Hassan, M. (1988), Ð²Ð‚ÑšStarting and operating a new small businessÐ²Ð‚Ñœ, Cabrillo College, Watsonville
Souster, C. (2001), Ð²Ð‚ÑšFuture Whitbread: Whitbread case notesÐ²Ð‚Ñœ, University of Luton, Luton
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