Have you ever wondered why a certain company exists? Sure, making its shareholders a tiny bit richer and employees earn a monthly income is a big portion of that. But that is not the whole story.
Legendary business professor Peter Drucker stated that a mission statement answers the questions of
“What is our business?”
“What should it be for the enterprise as a whole?”
A mission statement thus helps to create a firm’s identity, explain what it does, and how it is different from its competitors.
There are multiple approaches to defining a company’s mission. For instance, a product oriented mission statement focuses on the offering itself – something in the likes of “We created the smartest lightbulb in the world.”
Contrary to the product focus, the concept of market orientation focuses on the needs and desires of the customers. And that is exactly what we are going to cover in this article!
Market Oriented Mission Statements: Definition And Characteristics
Market oriented statements, as the name indicates, take an external view and put the customers at the center of their universe. Within a market-oriented company, all employees are committed to the continuous creation of customer value.
These companies are devoted to understanding the competence and plans of their competition by collection and assessing market information in a systematic and anticipatory manner.
Market oriented businesses are also more prone to constantly share knowledge throughout the organization and, if necessary, adjust their strategic course of action.
Customers are the most frequently mentioned stakeholder in those firms and providing a quality product or service to them is the most commonly included purpose. Employees and stockholders are therefore given lower levels of importance than the end consumer.
Ethical behavior is another aspect of high importance. Then to a smaller extent, the goals of growth, profitability, and thought leadership are also significant.
Examples Of A Market Oriented Mission Statement
Apple’s market oriented mission, for instance, is “to be bringing the best user experience to its customers through its innovative hardware, software, and services.” The user is hereby put at the center of what the company does and its technology is a by-product of fulfilling these needs.
When it comes to customer centricity and focus, no other company exemplifies this more than Amazon. So it isn’t without surprise that they not only act as the poster child for putting the customer first, but have inspired many other tech and non-tech companies to apply the same methodologies.
Just take a look at the graphic below.
Benefits Of A Well-Crafted Mission Statement
Let’s get one thing out of the way first: a mission statement itself will never make or break a company. Rather, it is to be seen as a supplement of the firm’s image and objectives as a whole.
Nonetheless, a well-crafted mission statement can have multiple benefits for the company.
Direction: By making your company’s goal explicit, you can create a compass for everybody in the organization to follow. All initiatives undertaken are influenced by your mission, which removes confusion and acts as a framework for decision-making. It also helps to resolve conflict faster as decision makers can refer to the mission statement to support their argumentation.
Accountability: Every organization is created to fulfill a specific purpose or need, which lies at the core of the mission statement. The only method for a firm to maintain progression is by holding itself accountable, and doing so is unattainable without shared awareness of its purpose. Sticking to that mission statement helps stakeholders hold themselves and their counterparts accountable vis-à-vis what they set out to accomplish.
Staying close to your roots: When companies grow both in size and complexity, it is easy to forget what brought you to that winning position in the first place. The mission statement helps everybody remember why they started and/or joined the venture in the first place.
Difference Between Market Oriented And Product Oriented Mission Statements
Whereas market orientation takes an external view, product oriented companies focus on their internal capabilities.
The focus lies on maximizing the production output, while keeping cost at the minimum. Firms that sell high volumes (for instance appliance manufacturers like Bosch or Siemens) typically utilize this strategy. The demand is constant and high, while the aim is to keep producing high-quality goods as cheaply as possible in order to increase profit margins.
The focus hereby does not lie on the demands of the customer, but rather to maximize product value. These companies believe that if both quality and pricing are of the highest level, customer demand will automatically follow.
A great example is the product oriented mission statement of Dyson. They solve the problems “others seem to ignore” by heavily focusing on internal engineering capabilities and the creative process of creation.
With all those examples in mind: which view does your company take? And why?