Strategic Planning in the Small Business

Unit 2 HO 2-5 (continued)

business in realizing its objectives and strategies, capitalizing

on its opportunities, or defending against its threats.

All small businesses possess both strengths and weakness.

Tannert Video, for example, had fostered a favorable company

image over its fourteen years of operation-a specific and im

portant strength. However, the number of employees and the

range of their skills were inappropriate for the VCR market

a powerful weaknes. Given their dual presence, it is important

that elements of strength and weakness be identified so that

strengths can be developed and used, and weaknesses can be

recognized and changed.

In order to make the analysis of internal strengths and

weaknesses more workable for the 3mall businessperson, four

resource categories for examination are suggested. These cat

egories (financial, marketing, organizational, technical, and hu

man), along with their relevant subcormponents, are noted in

Table 2-1.

RatingInternalStrengths and Weaknesses

In developing a meaningful internal analysis or profile, some

sort of evaluation or rating scheme must be utilized to identify

strengths and weaknesses. Such a scheme should be easy-to

use and assessable, yet comprehensive and complete. The In

ternal Profile Analysis (Table 2-1) fulfills these objectives. Each

internal factor or resource examined is given one of five rat

ings--slight weakness, strong weakness, slight strength, strong

strength, or neutral. Clearly, degrees of strength and weakness

exist. A given factor or resource must be assessed anu weighted

as either being slight, neutral, or strong. Further, some factors

may not be relevant at this time, but may still be noted in the

analysis if it is anticipated that they may become relevant in the

near future.

Evidence such as financial ratios, defective product rates

or labor turnover data may provide an objective basis for choos

ing a particular rating category. However, such evidence often

is unavailable. For example, a store owner may want to know

the rate of advertising effectiveness, but no figures relating sales

58 PartOne The Analysis Phase

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