Strategic Planning in the Small Business

Unit 2 HO 2-5 (continued)

Capsule 2-1 Tannert Video

Tonnert

Video, a small television shop specializing inquality mer­

chondise, personal

sales efforts, and superior product service,

hod been operating successfully

for fourteen years. However, in

recent years, sales and revenues hod gradually but steadily

de­

clined. The owners were concerned and sought means to stim­

ulate growth. A look at the nature of the competitive external

environment revealed a particularly

promising trend-the de­

veloping popularity of the videocassette

recorder market. The

owners

reasoned that this market possessed outstanding poten­

tial and identified movement Onto this market as a key environ­

mental opportunity.

Enthusiastically, the

business launched its foray into the VCR

market. Due largely to Tannert's excellent past reputation, con­

sumer response was excellent and the shop experienced large

numbers of potential customers interested in VCRs. Although

events and responses appeared encouraging,

a troubling series

of

factors loomed over this situation. Intheir enthusiasm to cap­

itolize on the emerging VCR trend, the owners forgot

to consider

an objec ive look at its internal condition so two critical difficulties

or barriers were undetected. First, the shop did not have a sales

force adequately versed in the intricacies of VCR features and

operations. Customers approached the shop seeking

the kind

of reliable, personal information that they hod come to expect

from this business. They were sorely disappointed

to learn that

the sales force, simply was uninformed and

unable to provide

many basic answers.

Secondly, the business did not have a service staff with in­

depth knowledge in the repair, cleaning, and maintenance of

VCRs. The firm recognized

this deficiency but was unwilling to

hire additional, trained staff members or to pull existing repair

staff off their regular repair schedules. They decided to contract

their repair work to a local shop who promised quick service.

Although this service was fast, its quality was below par and

customers registered numerous complaints.

One of the shop's domin, nt competitivl't'rengths-qualty

service-was being undcermined by the approach taken with the

new VCR venture. As one might expect, word of these transgres­

sions traveled, affecting not only the firm's VCR business, but

their traditional

strength in the TV market. Today, the firm has

decided to discontinue its VCR

efforts and embark on acampaign

to regain customer confidence in its TV sales and service.

55

Chapter Two

Internal Analysis

198