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1. Mission

The mission is the very reason and justification for the existence of a firm. Mission is always defined in terms of the benefits the firm provides to its customers. Thus the starting point for, defining the mission of any business is its customer..

Since the customer exists outside the business, the mission must be defined from the outside. The firm must ask the questions "What is our business?" and "What should our business be?" but seek the answer from the customer's viewpoint.

"What is our business?":- The important thing is to identify the perceived benefit or value which the customer is actually seeking when buying the product.

"What should our business be?" -  Mission has to seek a balance between the present and the future, and avoid being defined too narrowly or too broadly.

Here is an example of how mission can be defined too narrowly. Example - "Seeking to fulfill the entertainment needs of customers through distributing films to theatres for exhibiting to actual customer" - With the increasing popularity of videos and the subsequent decrease in earnings from theatres this firm was soon faced with the prospect of dwindling business. With the increasing popularity of videos and the subsequent decrease in earnings from theatres this firm was soon faced with the prospect of dwindling business.

Here is an example of how mission can be defined in balanced way - "fulfilling the entertainment needs through distributing means of audio-cum-visual entertainment".  It could have undertaken the distribution of video films along with films and continued to grow.

Here is an example of too broad way of defining the mission. “"Distributing means of entertainment". The field which the firm had identified is far too broad to be meaningfully able to concentrate on any workable opportunity. Consider that books, magazines, records, music cassettes also constitute means of entertainment. For many people both indoor and outdoor games are a way of entertainment. Should this firm then include hockey sticks, badminton rackets footballs, and chess boards also?

The scope of a firm's business flows from its definition of mission but is described in more specific rather than generic terms. Scope refers to the choice of the specific products and markets in which a firm wishes to operate. The definition of product/ market scope has a direct bearing on the subsequent decisions regarding choice of objectives and strategy.