Strategic Planning in the Small Business

Unit 3

firms. This should

be a goal for

all firms

and, therefore,

cannot be considered

distinc-

five.

A small percentage

of the firms had

developed special

services to

attract cus-

tomers, e.g., property

appraisal. However,

the vast majority

of the firms appear

indis-

tinguishable from

one another,

In part, the capacity

to perform

well in a

competitive market

is based on the feedback

a firm receives

on its performance.

If a

firm uses

a ;imited number

of criteria to

determine

its performance,

it may not have

a complete,

realistic picture

of how it

is

doing against

its competition.

Furthermore,

too frequent

evaluation,

especially if it is

limited to a single

criterion such

as sales,

may not

accurately reflect

the market

position,

The majority

of firms were

engaged in

developing and,

to a lesser degree,

writing

plans for the

future. The

goals of this

strategic

planning

focused on end products

such as number of

closings per listing

and

were not oriented

toward developing

proce-

dures that

would generate

a distinctive

competence.

DEVELOPING

A

DISTINCTIVE

COMPETENCE

Tle small service

firm that finds

itself in a

rapikly

changing highly

competitive market

can no

longer use business

practices that

succeeded in

the "good old

days." The

small

firm must develop

an attribute that

makes

it distinctive.

Examples

Three small

brokerages have

succeeded in

setting themselves

apart. Brokerage

A fo-

cused on the

financing of property.

With

the advent

of high interest

rates and scarce

mortgage funds,

buyers were faced

with a

complex
situation
about which they
knew

HO 3-1 (continued)

little.

Brokerage A developed

the "Financ­

ing Fact Sheet"

which defined in

lay terms

the different

financing options

and gave

examples of how

each would work

in a

given

situation. In addition,

the "Fact

Sheet"

was updated

on a regular basis

to

reflect

the loan status

of lenders within

Brokerage

A's market area.

Brokerage

Bdeveloped

competence in prop­

erty pricing.

Working in a market

area

where the turnover

of residential

property

was above

average, the brokerage

had

experienced

difficulty in helping

sellers

price their property

realistically.

Having

just purchased

a microcomputer,

the deci­

sion

was made to

spend some time

and

develop a data record

of property sold

in the

market

area. The selling

price of each

pro­

perty was

identified and updated

each time

it was sold. Wi!h

this information,

Broker­

age B provided sellers

with a means

for

comparison pricing.

Brokerage

C focused on

understanding the

potential

buyer.

After analyzing

their

interaction with

buyers, it was recognized

that the same

questions were

being asked of

each

potential buyer

in an attempt to

assess

needs, values

and perceptions

related to

property. The decision

was made

to put

together a

prnfile sheet that

the potential

buyer would fill out.

Based on the

buyer's

answers,

a profile was developed

that could

be used to match

buyers with property.

The

broker goes over

the profile with the

buyer

to identify

ihouses worth a physical

inspec­

tion. The

profile provides the

buyer with a

tangible

service that can

be carried away

from

the brokerage.

Differentiating

a small service

firm is a

complex,

difficult

task, as will be

seen

based on the steps

described below.

The

decision to change

has potential

conse­

quences

for all areas

of the firm. Two

need

to be

highlighted. First,

emphasizing one

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