Strategic Planning in the Small Business

Unit 2

HO 2-4 (continued)

eating out. However,

the attitude

and function

of dining

out

has changed.

Time is also

critical because

families seem to

want

to eat more

quickly. They

desire less

of a dining experience

and

more of a functional

orientation

from restaurants.

Quick

orders

are seen as

reasonable tradeoffs

for limited

menus with

few or no frills.

Apparently, the

restaurant has

not responded

to these needs and

therefore, is

losing ground

to more in-touch

competitors.

As another

example,

consider a running

store. Ten

years

ago the business

carried only

running shoes

and appealed

to

a target of

serious runners.

However, changing

social

values

have forced

the store

to change as more

people are

running

for exercise.

It has become

an activity

that refuses to

be bound

by sex or

age. Further,

as running has

gained in popularity,

so

has the consumer

demand

for running gear,

and how-to books.

These

accessories

have become bigger

sellers--on

a more reg­

ular and higher

turnover

basis-than shoes.

By tracking

these

changes

and anticipating

their effects,

the store was

able to

expand

its original

business concept

to include these

extra and

quite

profitable items.

One

may argue that

logically any store

concentrating

only

on running shoes

would be

forced to change

because of con­

sumer demand.

That may

be true, but it

is not the key point.

If

the shoe store was

blind to evolving

changes in

the industry,

and relied

solely on running

shoes, other

entrepreneurs

would

soon

become aware

of the gap and

enter the market

to fill the

consumer demand

for running

accessories. On

the other hand,

if the shoe

store monitors

its environment,

it can anticipate

these

changes and modify

and expand

its offerings.

Here, the

business

mitigates

the threat of potential

competition

and cap­

italizes

on an opportunity

for expanding

its product

line and

increasing

sales

volume.

Economic Changes

Finally,

economic changes

must be considered.

Economic

pro­

jections

or forecasts

are important

because of

the lag-effects

economic

,actors have

on business forces

and consumer

deci­

28
Part One The Analysis
Phase

171