Strategic Planning in the Small Business

Unit 2

HO 2-5 (continued)

are somewhat intangible elements and susceptible

to a wide

range of interpretations. Yet, this

knowledge may be most cri­

ical in helping position the business

to deal with future obstacles

and opportunities.

Product

The firm's owner or manager

must evaluate the strength of

the products sold. Products

can be evaluated in absolute terms.

However, the rating should

also reflect the relative strength of

products from a competitive

perspective. Here, three aspects

of the product

should be considered.

First, the firm's product

line should be evaluated. Product

line refers to the variety of products

that the firm offers. Here,

one should consider both the breadth

and depth of the product

line. A broad or cornr'ete line enables

the business to meet a

wider

range of consumer needs. Similarly,

depth refers to the

choices

available. For example, cne shoe store

may offer a very

narrow

and specialized product line-limiting

its business ex­

clusively to

shoes. A competing store, presenting

a much broader

line, offers not

only shoes but an array of complementary

or

supportive products--such

as polishes, socks, purses,

and leather

goods. Frequently,

the store with a narrow line can compete

because of the depth

built into the line. For example,

a wider

range of shoe style

and sizes is available. Consequently,

the

evaluation of product line must

consider not only competitive

influences, but the strategic

approach the business is trying to

promote. If the owner

visualizes the business as a specialty shop,

its product

line should reflect this -,trategy.

A second product rating decision

relates to the attractiveness

of the firm's products. Both product

image and product quality

are important determinants. Largely,

they both must be viewed

from

a consumer or market perspective.

Purchases are made

on

the basis of perceived image and

quality even though the

perceptions

may be inconsistent with reality.

If the owner or

manager realizes

these perceptions are inaccurate,

remedial

action, perhaps in

the form of advertising or promotions,

should

be directed at this

area. The planner should strive to obtain

an

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Chapter

Two InternalAnalysis

218