Strategic Planning in the Small Business

Unit 2

HO 2-4 (continued)

always be tracked. By following developments reported in

trade

literature and following reports of advances noted by suppliers

or sales representatives the business person may well

be aware"

of these key changes. Fa;lure to monitor

and address major

technological innovations may adversely

affect the firm's com­

petitive position-particularly if competing firms

avail them­

selves of the technical improvements. This

does not, of course,

mean that every fad or innovation

must be accepted. Rather,

it does require a careful analysis and systematic consideration

of each advance to determine its potential

effect on the firm.

By doing so, the best and most relevant changes may

be ex­

ploited. Further, the manager avoids being

caught in a position

where

the customer perceives that the business is technologi­

cally backward or inferior

in comparison to its competitors. If

this occurs, extensive goodwill is

lost, as well as a significant

number of customers, and the business may be forced to incur

substantial

expense to bring its technology up-to-date and on­

line.

For example, an insightful,

middle-aged man recently

started his own graphics design business. He posse!sed

exten­

sive experience in the industry, having

been employed by his

largest competitor for

fourteen years. Through his experience

and exposure to the industry and his careful analysis ofevolving

trends, he concluded that all six

firms in his selected target

market were using equipment and

approaches that were out­

dated. He felt that his business, by availing

itself of the latest

technological advances, could offer customers better

quality at

lower prices-thus, attaining a competitive edge.

Political

and Legal Changes

Relevant political

and legal changes must be consid.red. Here,

factors such as changes in government policy and

regulations,

legal developments,

and changes in political philosophy may

all impact the business. Examples are numerous. Many small

businesses were aware of the Export Trading

Company Act

and recognized its potential effects. Even before passage

of the

act, these businesses were contemplating and

plar.ning the de­

26 Part One The Analysis Phase

169