TNT case analysis
Mission, aims and objectives
According to Hom (2013), mission is a clear statement of the reason for the company’s existence on the market. Mission details the status of the company and provides both direction and guidance for setting aims, objectives and strategies at different organizational levels.
The value of the mission, which is expressed formally and effectively represented to the employees of the organization, cannot be overstated. The aims and objectives made on its basis serve as criteria for the subsequent decision-making process. For instance, according to the case, the TNT’s mission consists of three key points: to exceed customers’ expectations shipping their stuff all over the world; to provide the most efficient solutions for the customers; to be the leader in the industry. Another example is Samsung company. According to its Strategic Vision 2020, the company's mission is to "Inspire the World, Create the Future." As well as TNT's, Samsung's mission also includes three key points: new technologies, innovative products, creative solutions. Thus, these are core principles that both TNT and Samsung are based on.
The mission is much wider term which sets up the company’s margins. The company’s aim is much narrower statement of what the company plans to do and achieve. Thus, it is a more particular term. Coming back to the TNT example, its aim, according to the case, is to satisfy the customers providing the most efficient stuff shipping while paying attention to the responsible behavior. Meanwhile, one of the Samsung's aims is eco-management, according to its official website.
Finally, the objectives are considered to be the instruments of achieving the aims and mission respectively. They have to meet a range of characteristics, to be so called SMART (Specific, Measurable, Achievable, Relevant, Time-orientated) objectives. The objectives have to specific and measurable. When formulating its objectives in specific and measurable units, management provides a clear framework for future decisions and evaluation. They also should be focused on time with long-term objectives being set first. The company’s objectives should be achievable. In case they are unachievable the employees won’t have any desire to work and their motivation will be weaken. Finally, the objectives should be interrelated and relevant in order to mutually support each other. The case provides the example of TNT’s objective: “Answer 85% of calls from customers within ten seconds”. This is a an objective which relates to the above mentioned aim of satisfying customers and providing the best service and solutions. Samsung's objectives, in turn, are "To reduce emissions from facilities by 50 percent on a financial emissions intensity basis until 2013. To reduce indirect emissions from products by 84 mil. tons through the end of 2013", according to its official website. These are short-term objectives relating to the company's eco-management aim.
Business strategy, strategy map
The development of strategies, its adjustment and implementation are at the heart of business management. The company's business strategy is a comprehensive management plan, aimed at strengthening the company's position in the market as well ensuring the coordination, involvement and customer satisfaction. The process of strategy development is based on a careful study of all the possible directions of the company’s development and activities, and is the choice of the general direction, target markets, methods of competition, resources employed and business models. In other words, the strategy is the development of a company's choice, markets, competition and methods of doing business. Therefore, if the combination of mission, aims and objectives is answering the question ‘What to achieve’, business strategy answers the question ‘How to achieve’. The case provides that the TNT’s strategy is based on three key points: what goods to produce, what territories to work on; what competitive advantages to develop.
Strategy map is a tool that allows management companies to formulate and show how they can effectively create value by matching the strategic objectives through a chain of cause-and-effect relationships. Strategy map is commonly associated with the Kaplan-Norton Balanced Scoreboard. It consists of four main components and involves the following actions: defining the strategic objectives in financial performance - creating long-term shareholder value (financial component); offering value to the customers while ensuring the achievement of financial targets (customer component); defining the internal business processes and bringing them to perfection in order to ensure the implementation of financial and client objectives (internal component); the steps that should be taken by enterprises to achieve the objectives set in the first three components (component of people’s training and development).
Many executives may struggle some difficulties with the business strategy when it comes to its implementation. “That is where the strategy map and its derived balanced scorecard fit in. Their combination is a navigational tool to guide the organization to execute the strategy formulated by the executive team” (Cokins 2013). Therefore, this is the way strategy map helps a company to deliver its business strategy.
Customer Promise
One of the key parts of the TNT’s overall strategy is Customer Relationship Management. The company always tries to meet the customers’ needs since it is much cost-efficient to keep the present customers rather than generate new ones. For this purpose TNT has made its Customer Promise consisting of 10 promises. Of course they are rather informal and there is no guaranty that the company would act up to its promises, but still they ensure the customer that it would. However the most important thing for the customers is simply their stuff delivered on time and to the right place, thus the company always tries to do this. What is more, TNT also segments its customers in order to find personal approach to everyone and eventually make him or her happy and satisfied. As a result customers’ loyalty is measured through Customer Loyalty Measurement.
Strategic gap
Having set its mission, aims, objectives and business strategy, every company shall perform them. However, sometimes the difference between the current and estimated performance comes up. This is called a strategic gap. According to Charan and Colvin (1999), “In the majority of cases--we estimate 70%--the real problem isn't the high-concept boners the boffins love to talk about. It's bad execution.”
TNT has a strong understanding of this issue. People are the basis on which the company’s strategy is built on. They are those who perform the strategy, so if their level of qualification is low the whole company is likely to fail. TNT’s philosophy, according to the case, is that there are no limits to people’s talent. That is why there are various programs aiming at effective training of the employees in order to make them more flexible and reduce the possible gap. For instance, there are safe and fuel-efficient driving training for drivers or training qualifications with educational institutions like Hull College for students. What is more, TNT promotes nearly 70% of its employees, according to the case. Therefore, the company is interested in providing its people with long-term careers and increasing both their qualification loyalty to its mission and principles. TNT has 10 core promises and by meeting any gaps arising in their employees, it makes sure that its Customer Promise is met faultlessly.
References
TNT Delivering a business strategy. (2011).The Times 100 Business Case Studies.
Vision & mission. (n.d.). Retrieved November 24, 2014, from http://www.samsung.com/us/aboutsamsung/corporateprofile/visionmission.html
Eco-Management 2013. (n.d.). Retrieved November 24, 2014, from http://www.samsung.com/us/aboutsamsung/sustainability/environment/em2013/em2013.html
Hom, E. (2013, January 17). What is a Mission Statement? Retrieved November 24, 2014, from http://www.businessnewsdaily.com/3783-mission-statement.html
Cokins, G. (2013, July 22). The balanced scorecard, strategy maps and dashboards: Why are they different? Retrieved November 24, 2014, from http://www.cgma.org/magazine/features/pages/20138186.aspx?TestCookiesEnabled=redirect
Charan, R., & Colvin, G. (1999, June 21). Why CEOs Fail It's rarely for lack of smarts or vision. Most unsuccessful CEOs stumble because of one simple, fatal shortcoming. Retrieved November 24, 2014, from http://archive.fortune.com/magazines/fortune/fortune_archive/1999/06/21/261696/index.htm
