Strategic Planning in the Small Business

Unit 2

HO 2-4

(continued)

Certainly,

managers of small businesses wish

to realize and

capitalize on the opportunities

and benefits of

size and to pro­

tect themselves from

the critical influence of rapidly

material­

izing environmental

threats and obstacles. Therefore,

a careful

and accurate

determination of

key environmental influences

and changes

is essential. A thorough

environmental

analysis

creates the difference

between a proactive

and reactive

business.

THE PROACTIVE

BUSINESS

One of the themes

noted and built

upon throughout this book

is that planning

is a proactive activity. Simply

stated, a proactive

business

looks to the future, anticipating

and planning for

changes. One

reason for emphasizing environmental

analysis

so strongly is that

it helps the business develop

a proactive

rather than reactive basis

or style of management. The

proac­

tive manager sees opportunities

on the horizon and

positions

the

business to benefit from

them. Proactive managers

also

recognize

impending threats and

take decisive actions to over­

come or mitigate

these before disaster

strikes. A reactive busi­

ness, however, is

driven by day-to-day demands.

Here, events

occur and the firm

responds. This reactive business

is always

undergoing an unanticipated

trauma. As such, crisis

manage­

ment is the evolving style

of operation, and putting

out the

largest

fire is the focus of acti

vities. In all likelihood, the

business

that

fails to continually recognize

and analyze its environment

will become

the victim of changes

and forces within that en­

vironment. The literature

on small business failures is wrought

with these examples.

To recognize the

impact of environmental

analysis and the

importance of proactivity,

consider the case of

Mitinetonka, Inc.

in Capsule 1-1. One can

see that Taylor's success,

at least in

part,

is derived from carefully

a: .essing his environment, ana­

lyzing

unmet consumer needs,

capitalizing on these opportu­

nities, and

constantly being poised

to modify and change

direction in light

of environmental (competitive)

influences.

Taylor is proacting

and, as such, is succeeding

in industries

dominated by giant

international firms.

23

Chapter

One EnvironmentalAnalysis

166