Strategic Planning in the Small Business

Unit

3

HO 3-3 (continued)

The

Single Product/Market

Posture

The most prevalent strategic

posture utilized

by the small business

is that of concentrating

on

a

single product or a single

market. Businesses

such as one that produces

aluminum garage

doors, cr an

automotive repair shop

or a family-style restmurant

are examples of companies

with

the single product

or market focus.

The appeal of the

single product/market

posture is in the competitive

advantage that

this type

of small business may

possess. This posture

allows the small business

to emphasize what

it

knows and

does best. Small business

saccess-at least initially-is

greatly enhanced

by limiting

involvement to those

areas where owners ar:d

managers possess business

experience and a clear

understanding

of the dynamics

of the competitive market

situation. This is especially

true in the

small business

where managerial staff

is limited. Focusing on

the single product/market

allows

the busy owner

or manager to concentrate

on t,. nuances

of that particular situation

without

having to meet a variety

of demands simultaneously.

The manager can

orient and target energies

in a unique and focused

direction, thereby standing

a better chance of

staying on top of relevant

issues and competitive

factors.

A single product/market

posture also

allows :he business

to develop a number

of potential

competitive ac.vantages

over larger firms.

Small businesses are

often characterized by

their

general flexiility

and adaptability.

These factors may

enable the small firm to

meet the special

needs of their

target market in a more

timely and responsive

manner than can the

large business.

Thus, meaningful

opportunities that are

normally overlookeO,

or bypassed by a large

firm cat,

be exploited

by the small business.

Of course, the single

product/market posture

is not without its risks.

The firm has placed

all

its eggs in one basket.

If the present products or

markets remain attractive,

this posture can lead

to significant growth.

However, if either

the product or the

market loses its vitality,

the

business is

placed in a tenuous position.

In this case, a repositioning

may be required.

The Niche Posture

A specialized

version of the single

product/market posture-one

of the most promising

strategic

postures for a

small business-is the

niche posture. Through

careful environmental

analysis, an

important gap or niche

in a market is identified.

If a business has the

capacity and competency

to enter

these areas, it can capitalize

on these previously

unfulfilled opportunities.

Recognizing

and gearing business

toward a promising

niche may lead to substantial

short-run profits

and

possibly may be viable

over many y(ars. In

some cases, competitors

may not realize that

the

niche

exists. Others may

see the gap, but still

not have any interest

in moving into it due to

either perceived
costs, limiied
demand relative to their
other products, or an inability
to fill the

niche at an acceptable
price. As in the single
product/market posture
above, the niche
posture

can be a high ,eward
strategy, but always
possesses the risk of a
more able competitor
suddenly

moving
into the niche.

Illustration
Capsule 4-2
provides a unique example
of a creative niche
posture.

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