SCHOOL OF COMMERCE

BACHELOR OF APPLIED ACCOUNTING: AUDIT AND

INFORMATION SYSTEMS
(BAA-AIS YEAR 4)

STRATEGIC PERFOMANCE MANAGEMENT (SPM400)

ASSIGNMENT ONE

PREPARED BY KELVIN MASEKO

(MA0226)

SUBMITTED TO
ALEX CHILIGO

SUBMISSION DATE
(26 MARCH 2016)
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QUESTION ONE
MISSION STATEMENTS AND ITS BENEFITS WITHIN A
COMPANY.
A mission statement is a written declaration of an organizations core purpose and
focus that normally remains unchanged overtime, or in simpler terms it can be
referred to as enduring statements of purpose that distinguish one business from
other similar firms.
Properly crafted mission statements serve as filters to separate what is important
from what is to, clearly state which markets will be served and how and communicate
a sense of intended direction to the entire organization. A mission statement
identifies the scope of a firms operations in product and market terms and charts the
future direction of an organization. A mission statement is a constant reminder to its
employees of why the organization exists.
A mission statement is different from a vision in that the former is the cause and the
latter is the effect; a mission is something to be pursued for that accomplishment.
Also called company mission, corporate mission, or corporate purpose.
A mission statement is proposed by the companys board of trustees, they are
normally short and simple and should outline what the organizations purpose is and
are related to the specific sector an organization operates in. The mission statement
should guide the actions of the organization, spell out its overall goal, provide a path,
guide decision making, it should provide a framework or context within which the
companys strategies are formulated.
According to Dr. Christopher Bart, the commercial mission statement consists of three
essential markets.
Key market: focusing on the target client/customer
Contribution: what product or service to provide
Distinction: What makes your product or service unique, that it stands out from
the rest
Elements of Mission Statement
1. Purpose
Why is the company in business? What is the organization for?
This could be maximizing shareholder wealth or taking such aim as secondary, like
satisfying needs of customers, the community, employees as well as shareholders.
2. Strategy
Part of mission statement where company states how it is going to achieve its
purpose. How competitive advantage will be soughed
3. Policies and Standards of behavior
Without policy and behavior guidelines that help staff to make decisions on a day-today basis the strategy and purpose has little value.
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4. Values
Values are feelings and moral principles that lie behind the companys culture.

Benefits of Mission statements

1. It determines the companys direction.
Smart business owners use this statement to remind their teams why their
company exists because this is what makes the company successful. The
mission statement serves as a North Star that keeps everyone clear on the
direction of the organization. This leads to the second reason.
2. It focuses the companys future.
The mission tells us what were doing today that will take us where we want to
go in the future.
3. It provides a template for decision-making.
A clear mission sets important boundary which enable business owners to
delegate both responsibility and authority. Mission is to the company what a
compass is to an explorer, a map to a tourist, a rudder to a ship, a template to
a machinist. It provides a framework for thinking throughout the organization.
4. It forms the basis for alignment.
When a new employee is hired it is critical that the new hire know what the
company does and where the company is going. The mission statement forms
the basis for alignment not only with the owner, but the entire team and
organization.
5. It welcomes helpful change.
Many people are resistant to change because it causes us to feel insecure and
sometimes out of control. However, if the mission is clear, then team members
are more likely to see the value of the change and how it helps the organization
accomplish the mission. This will create a culture that welcomes change when
warranted.
6. It shapes strategy.
Every business needs a strategy. But strategies must not be created in a
vacuum. Instead of looking at whats new or what competitors are doing and
trying to copy them, wise business owners create the most effective strategies
possible to accomplish the mission.
7. It facilitates evaluation and improvement.
A clear, written statement of mission will know exactly what to measure and
how to measure it. Clarity of mission brings clarity on every other level of the
organization.

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QUESTION TWO
ANALYSING THE MKANGO TRANSPORT ENVIRONMENT
In analyzing the environment in which the Mkango transport is operating in first we
have to consider the internal and external factors on which the company is operating.
Below is the analysis on the environment.

1.SWOT ANALYSIS
The word SWOT is an abbreviation which stands for Strength, Weakness,
Opportunities and threats; SWOT analysis is often used in the initial stages in the
analysation of the environment. SWOT analysis helps to focus on what the
external and internal factors are. The analysis helps to focus on the strengths and
identify where the best opportunities are. It helps spot danger and improves
weaknesses.
Strengths
The advantages of the company Mkango Transport has to be assessed thats in
terms of the areas which the transport company performs best. Thom has
succeeded in the negotiations to lease and occupy some land to accommodate
all the tractor units, trailers and even build a repair and maintenance facility
adequate for the fleet. These are capital assets which will in return assist Thom
to improve and increase the generation of profits to the company operating
from own premises.
Weaknesses
This will try to assess the areas in which could be improved and also try to find
the areas in which Mkango is performing weakly. There is an external factor of
changes in technology which Mkango Transport has decided not to introduce it
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its business. This is a weakness to the business as all the competitors of

Mkango Transport have introduced and are already using the advanced ways of
managing the their busineses.
Opportunities
Focus on the opportunities the company has. This is often the area where
competitors perform poorly. : Mkango transport has obtained a license to
undertake heavy goods vehicle training. In as much as Mkango Transport is a
haulage company it has also successfully diversified to heavy goods vehicle
training which happens to have a regular stream of customers. This is a big
opportunity to Mkango Transport because the introduction of the training point
will increase cash inflow while operating from own premises.
Threats
The threats will focus on the obstacles that the company is facing, this is the
area where competitors are performing well. Mkangos threat here is the use of
technology of monitoring traffic volumes thereby avoiding traffic jams. The ther
competitors have already introduced the technology this therefore, Mkango
transport may lose customers and its competitors may take advantage of the
same because of their advancement in technology.

2.PESTEL ANALYSIS
This is the framework in which the external environment is analyzed. The process
entails learning about the various external factors which can affect Mkango Transport.
The acronym PESTEL stands for Political, Economic, Sociological, Technological,
Economical and Legal factors.
In the context of Mkango Transport the analysis can be analyzed as follows:
Political Factors
The factor studies the current political situation and also includes the
potential political influences. These are basically how the government
intervenes in the economy. In the case of Mkango Transport the residents
have petitioned the company through a local MP and council, who are
politically connected to the government, form operating for 24 hours a day.
Intervention into this matter by either the local council or the MP may
negatively affect the operation of the company.
Economic factors
The factor deals with the national and global economy impact. These include
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economic growth, interest rates, exchange rates, the inflation rate. These
factors greatly affect how businesses operate and make decisions. It is
indicated that Mr. Thom obtained a loan from the bank of K10 million. The
company will suffer high interest charges due to high borrowing rate.
Interest rates affect a firm's cost of capital and the extent a business grows
and expands. Exchange rates can also affect the costs of exporting goods
and the supply, and price of imported goods in the global economy that
Mkango Transport is operating.

Technological Factors
The factor discusses the effect of emerging technologies. This external
factor focuses on the ways a society can affect your company.Mkango
Transport is failing to adapt to technological changes in the industry though
its competitors have responded to the changes already. This indicates
problems like; barriers to entry, minimum efficient production level and
influenced outsourcing decisions by Mkango Transport. Furthermore,
technological shifts would affect costs, quality, and lead to innovation. Other
factors include technological aspects like R&D activity, automation,
technology incentives and the rate of technological change.

3.STAKEHOLDER MAPPING
Stakeholder mapping is an important step in understanding your key stakeholders,
thus who they are, where they come from, and what they are looking for in
relationship to your line of business. This process is driven by engagement strategy
that is developed in identifying those stakeholders, directly and indirectly affected by
the project, taking into account the government as a key stakeholder.
The first step in the process of stakeholder engagement is identifying and
determining who your project stakeholders are, and their key groupings and subgroupings, bearing in mind that certain stakeholder groups might be pre-determined
through regulatory requirements.
However, it indicates that Mkango Transport did not do the analysis of stakeholders
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as evidenced by the differences as a result of its 24 hour operations. The residents of

houses that are adjacent to the Thoms piece of land are complaining of the noise of
vehicles moving in and out of the site in the early hours of the morning. If the process
of analyzing the residents around the business place was conducted by Mr. Thom
Banda it would have revealed that the stakeholders most directly affected by the
project, whether from the use of land at the project site or the effects of air and water
emissions, from off-site transportation of hazardous materials, or even the socioeconomic effects of job creation throughout the supply chain.

4. PORTERS 5 FORCES MODEL IN ANALYSATION OF

MKANGO TRANSPORT
This is a framework that analyzes the level of competition within an industry and
business strategy development. It draws upon industrial organization economics to
derive

five

forces

that

determine

the

competitive

intensity

and

therefore

attractiveness of an Industry. Attractiveness in this context refers to the overall

industry profitability. An "unattractive" industry is one in which the combination of
these five forces acts to drive down overall profitability.
Below is the detailed analysis of Mkango Transport in relation to Porters five forces
model:
Threat of new entrants
Mkango Transport operates yield high profits this is evident from the
haulage contract work. Profitable markets that yield high returns attract
new companies. This means that Mkango is operating within the
environment that has strong competition due to high profits realized.
These results in many new entrants, which eventually will affect Mkango
Transports profitability and all other firms in the industry. Unless the entry
of new firms can be blocked by incumbents as the large haulers have
already started dominating the market, the abnormal profit rate will trend
towards zero.

The bargaining power of customers

Mkango Transports income is dependent upon work received from GDM
Haulage LTD. As mentioned in the analysis of the company 70% of its
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turnover is deliverd from GDM, with the appointment of the new GDM
Haulage transport manager who is employing other haulers beside Mkango
Transport has already affected the company by a third thus their levels of
income has been reduced.
Competition
Competitive rivalry is the major determinant of the competitiveness of the
industry. Mkango Transport will face a very stiff competition in this industry
because the large haulers have a sustainable competitive advantage
through innovation of developing their major brand names within the
market. Another powerful competitive advantage by the large haulers is the
ability to operate across a large network of local distribution centers.
Summary
The analysis of the environment in which a company is to operate in is very vital as
this determines the extent on which the company will face in the running of the
business. The study of the Internal factors and the external factors will thus improve
the management and the running of the businesses as a whole.Every implementation
of the of the factors will therefore save the company.

REFERENCE:

http://www.thegrowthcoachhouston.com/7-reasons-why-your-company-needs-aclear-written-mission-statem&#8230
R. D., Hoskisson, R., & Hitt, M. (2008). Understanding business strategy
Strategic management; R. David
Cooper, D.R. & Emory, C.W. 1995. Business Research Methods, fifth
edition,Richard D Irwin.
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