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CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management

Anaya Pharma has a mission to 'provide affordable generic medicines to rural India'. Its managers have set a target: 'achieve 15% market share in generics in five states within three years, with 20% lower cost than competitors'. A consultant reviews the documents and makes four remarks. Which remark is CORRECT?

The correct remark is that the target is a strategic objective, being specific, measurable and time-bound, while the mission states the firm's basic purpose. Objectives translate the mission into quantifiable results such as 15% market share in three years, whereas a mission remains broad and non-numerical.

  1. AThe target is a strategic objective because it is specific, measurable and time-bound, while the mission states the firm's basic purposeCorrect
  2. BThe mission is more measurable and time-bound than the target
  3. CThe target is a vision because it describes the distant future in broad terms
  4. DBoth statements are goals only because neither can guide strategy

Explanation

A mission states the fundamental purpose and scope of the business, while objectives are specific, measurable, time-bound targets used to achieve it. The 15% share in three years with a cost target fits an objective. The other remarks wrongly reverse the roles or deny that objectives guide strategy.

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