A company description consists of four essential elements: key success factors, core values, a vision statement and a mission statement. Key success factors are organisational strengths that create competitive advantage for the company. Core values are guiding principles and express what is important to the entrepreneur or company when conducting business. A vision statement sets the overall direction of the company and a mission statement is a clear and concise explanation of the company’s purpose.
A company description consists of four parts which have to be compiled in a consistent manner: the key success factors, the core values, the vision statement and the mission statement. While a business must continually adapt to its competitive environment, there are some core ideals that remain relatively steady and provide guidance in the process of strategic decision-making. These unchanging ideas form the vision, and are expressed in the company mission statement.
Key Success Factors
Key success factors are key abilities, competencies and strengths that an organisation has acquired and that differentiate it form its competitors. Therefore, they result in competitive advantages and contributions to the long-term success of the company.
Since these are the factors in which the organisation performs well in a benchmark with competitors, they can also be referred to as Key Competitive Factors (KCF). These KCFs can consist of the entrepreneur’s own background experience, skills and personal strengths as well as to the organisation’s location, its expert personnel, efficient operations, or ability to bring value to its customers.
Core values are guiding principles that indicate how the company will behave, internally as well as externally. They support a company’s strategy planning and decision making processes. These core values are expressions of what is important to the entrepreneur or the company as a whole when doing business. They serve as the basis for creating a good mission statement (BUSINESS DICTIONARY; NO YEAR).
The following list presents some examples of how core values might look like:
- Provide high product quality
- Provide superior customer service
- Protect the quality of the environment
- Ensure equal access to resources
- Encourage innovation/creativity
- Practice sustainable development
A vision statement answers the question, “where are we going?” (OLSEN, NO YEAR). In other words, it sets the direction of the company’s activities. It can range from one line to several paragraphs and captures what the company would like to accomplish. Thereby, it provides inspiration for every member of the company during day-to-day operations as well as decision making from the strategic to the operative level. Despite it being an articulation of hopes and dreams regarding the business, a vision statement does not give any guidance on how to accomplish these dreams.
A mission statement answers the question, “why do we exist?”. In other words, it is the opportunity to define the company’s goals, ethics, culture, and norms for decision-making (BERRY, NO YEAR). The best mission statements define a company’s goals in at least three dimensions: what the company does for its customers, what it does for its employees, and what it does for its owners (BERRY, NO YEAR). In usually not more than 30 words, an explanation is given on the reasons for existence and guiding principles of the company. The mission statement works as a filter to separate what is important to the company from what is not. For example, it can clearly state which markets are to be served by the company. Important is that the mission statement is sufficiently communicated. If the employees do not know and embrace the mission statement, it does not exist!
This textbook chapter gives a good introduction to the different parts of a company description with examples and exercises.ALTER, S.K. (2000): The Vision, Mission, Objectives and Business Description. In: ALTER, S.K. ALTER, S.K. (2000): Managing the Double Bottom Line. A Business Planning Reference Guide for Social Enterprises. San Francisco, CA: 44-61. URL [Accessed: 16.12.2015]