Strategic Planning in the Small Business

Unit 2

HO 2-4

(continued)

graphic area or boundaries from which customers are drawn.

It is based on the size of the business and its management's

capabilities. A business owner should regularly assess it's

scope

and nature of the trade area. For example, changes

in popu­

lation size and composition, the distribution of wealth,

shif.s in

competition within the area, and changes (either increases or

decreases)

in the business' capacity may necessitate a restruc­

turing of the trade area.

Within the trade area, the key focus of concern is on the

target market. The target market is that

specific set of individ­

uals within the trade area that

the business chooses to attract

as its p,:inary consumers. A clear

recognition of the needs,

concerns, and make-up

of this group is critical, as in ..eting,

promotion, and general sales efforts

are designed to appeal to.

and

address the special conct.rns of this group. It must be

remembered that products and services are not ends in and of

themselves. Many small

business owners forget this, and be­

come so enamored with

their products or services that they fail

to understand or to see the customer's perspective. Products

or services regardless of how brilliantly

conceived or developed

will only be successful if they provide satisfaction or meet some

consumer

need. Shifts in consumer tastes and preferences must

be constantly monitored.

Understanding the demographic and

social make-up

of the target market, specifically the sex, age,

marital

status, income, occupation, and lifestyle of consumers

aids the owner in identification of their

needs and concerns.

Shifts

in target markets, often offer new opprtunities for the

business.

Suppliers

It is important to keep

abreast of suppliers and the factors

affecting their

success. A manager must consider the firm's

relationship to the suppliers in light of two factors-dependency

and vulnerability. Each business will differ,

often considerably,

in terms of these two factors.

Dependency refers to the extent

to which a business depends on or requires extensive

raw ma­

terials or pre-assembly inputs provided by suppliers.

Some busi-

ChapterOne Environmental

Analysis 33

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