Strategic Planning in the Small Business

HO 2-5 (continued)

Unit 2

ber of items

will need to be considered

in reaLhing thi,.; con­

clusion.

Next, an evaluation of

the firm's ability to raise needed

capitalshould be completed.

Here, degree of leverage,

availa­

bility of

internal funds, as well

as the cost of capital

to the

business,

may all be important

considerations in reaching

this

evaluation.

Finally, the working capital

position of the firm

should

be evaluated.

One may feel

that it is unreasonably

simplistic to

reduce the evaluation

of financial

resources to these three

items.

Indeed, it is

a simplified approach.

Yet, these are the three most

critical questions

that the business

owner must ask before

com­

mitting to the

pursuit of any objective,

strategy, or environ­

mental opportunity.

EVALUATING

MARKETING

RESOURCES

Most small business

owners and analysts readily

agree that mar­

keting is a critical concern,

and can have a powerful

influence

on

the overall success of

the business. Despite

this realization,

marketing

resources are rarely

subjected to close

analysis or

scrutiny.

Often, the business has

no valid measure of the

relative

effectiveness

of its marketing efforts.

Likewise, the owner

often

fails to understand

the capacity and

limitations of the existing

marketing

system. A careful evaluation

of the market

function

is warranted.

In analyzing the

internal strengths and

weak­

nesses of the

marketing system, six general

categories of mar­

keting resources

should be considered.

Market Performance

A logical starting

point in analyzing the

company's marketing

resources is to evaluate

or rate actual market

performance. Here,

the

most reasonable and

tangible factor to be

considered is the

firm's relative market

share One may have enough

information

about

the industry, market

area, and competitors

that an ob­

jective

and relatively accurate

statement of market share

can

be noted.

More often, some data-in

a sketchy or piece-meal

fashion-is

available or can be developed

to derive a reasonably

73

Chapter Two

InternalAnalysis

216