Strategic Planning in the Small Business

Unit 2

HO 2-5

(continued)

effectively.

The process

revealed

a significant market

oppor­

tunity.

The owners

were excited

about this new-found

avenue

for business

growth. However,

the shop

lacked the internal

capacity

(trained sales

and repair personnel)

to effectively

cap­

italize on the

opportunity

and present business

was adversely

affected.

A careful, objective

internal

analysis would

have re­

vealed the

personnel problems

before

a commitment

to action

was made.

Such an

effort would have

enabled the

business to

do one of

two things: (1)

correct the personnel

problems

and

thus, strengthen

the

probability of

realizing the

noted envi­

ronmental

opportunity

and

(2) clearly recognize

that the

in­

ternal

personnel

weaknesses

threatened the

success of the

proposed

venture,

therefore, realizing

that it must

seek other

avenues for

growth. In either

case, the lesson

is clear. Internal

analysis

is an extremely

important

activity. It seeks

to determine

if the firm

is able to effectively

pursue

a particular

strategic or

competitive

thrust.

The business

must combine

its environmental

awareness

and

insight with

a corresponding

understanding

of internal

demands.

Moving aggressively

in

the external environment

without commensurate

internal

support will,

in most cases,

lead

to serious difficulties.

These

points are

reinforced quite

dra­

matically

in the example

of Osborne Computers

in Capsule

2­

2.

Capsule

2-2

Osborne Computer

Corporation

Inthe

early

19

80's, Adam

Osborne revolutionized

the personal

computer

industry. Through

careful assessment

of consumer needs

and

astute marketing,

Osborne built

his empire to one

that by

1983 was

selling 10,000 machines

a month

and earning

annual

revenue

of more than

$100 million.

His approach

was basic. He

delivered a technologically

sound machine (Osborne

I),sold

it at two-thirds the

price of its

closest

competitor, offered

over $1500 worth

of brand-name

soft­

ware at

no additional cost,

and pr-kaged

itin a portable,

twenty­

six-pound

easy-to-carry

uoit.

As

the Osborne I proved

successful, competitors

recognized

the

viability of this new

segment of the

computer business

and

56
PartOne The'Analysis
Phase

199