Strategic Planning in the Small Business

Unit 3

Content

Process

may be achieved by moviiig toward

un­

exploited or untapped areas of consumer

demand. The business

swill only consider

growth

toward areas where real and

meaningful prospects

for success are

present.

The concept of strategic fit means

that the

firm will

only grow into areas that are

consistent with or complement

existing

operations.

Although diversifying, the

small

firm must be assured that some logi­

cal relationship

exists between existing

operations

and the desired areas of diver­

sification.

Extremely high risks occur

when expansion

extends beyond the entrepreneur's

realm

of experience or demonstrated

rompe­

tence. For this reason,

unrelated diversi­

fication is, typically,

not a reasonable

option

for the small firm.

THE CHOICE OF STRATEGIC

POSTURE

Given these six general strategic

postures

available to small

firms, managers must

decide which postures are most

approp­

riate for their situation.

It is not unusual for
a firm to simulta­

neously
embrace more than one posture.

The appropriate posture(s)
may be a func-

tion
of at least four significant influences.

*   The stage of business development

" The attractiveness of the
firms

products and industry

" The firms relative competitive
strength

" The personal desires and aspirations
of

the

business owner.

258

Put up TP 3-8: The

Process of Choosing

a

Strategic Posture.

Put up

TP 3-9: Factors to Consider When

Choosing a Strategic Posture.