Strategic Planning in the Small Business

Unit 2 HO 2-4 (continued)

clear snapshot of where

each firm stands in terms of the fifteen

factors. Such an awareness allows managers to recognize threats

and opportunities and thereby, pursue actions to deal with them.

PERFORMING THE ENVIRONMENTAL ANALYSIS

Previous sections have discussed factors taL should be included

in a firms external analysis. Attention now turns to the actual

analysis itself.

Environmental Threats

and OpportunitiesProfile

The environmentalthreats and opportunitiesprofile (ETOP) can be

an easily used and a very beneficial tool for the small business

owner. Here, one looks at the

firm's environment for the pur­

pose of identifying significant threats and opportunities. As

used here, a threat is any

factor that may limit, restrict, or impede

the business in the pursuit of its goals. A range of factors may

need to

be considered. The presence of strong competition,

changing public attitude toward the

firm's produc-', an adverse

economic climate, or the bankruptcy of a key suppI.r are all

examples of environmental factors that may pose threats for

the business.

On the other hand, an opportunity is any factor that offers

promise or potential for moving closer or more quickly

toward

the firm's goals. New high growth markets, unmet or changing

customer demands, the development of new products to com­

plement existing lines, or a general upsurge in the local econ­

omy may all produce genuine opportunities for the business.

More will be added on the use of ETOP in a subsequent portion

of this section.

Deciding What to Consider

First, one must decide which environmental factors to track.

For most small businesses, it is totally unrealistic to believe that

all the external factors that may have some influence on the

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TP Analysis Phase

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