Strategic Planning in the Small Business

Unit 3

HO 3-3

(continued)

and

has gained a

level of consumer

acceptance and

establishment. However,

rather

than

maintain

current business

levels (as is the

case in stabilization),

the owners

desire to grow.

Here,

the firm's original

market approaches

are tested and refined,

as steady,

controlled growth

prevails.

As the business develops,

it encounters,

for the first time,

some of the problems

and

demands caused by

growth. For example,

new employees

are added, and

owners are faced

with

the need

to delegate some operating

decisions;

standards and controls

need to be formalized,

and

job responsibilities

must be delineated

as a workable

organizational structure

evolves.

As

noted previously,

the choice of the

proper strategic

posture is strongly

influenced by

the

firm's relative competitive

position and

the product and

industry attractiveness.

Two cautions

must be stressed.

First, attempts

at securing growth

are risky if

the business is experiencing

a

relatively weak competitive

position

in its original product

or market areas.

Second, if product

or industry

attractiveness is becoming

or is projected

to be less favorable,

one should

be cautious

about further

growth in that

industry.

These

cautions are

not meant to suggest

that a business

is precluded from

growth opportunities

if either

relative competitive

position or

product and industry

attractiveness

are unfavorable, but

the additional

risk involved must

be noted. Unfavorable

readings

signal a need for

change.

Should

this change

be oriented toward

further growth or

rectifying the areas

of difficulty?

It is

difficult

to cope with

the additional pressures

and demands

of growth without

a strong primary

base of operations.

The business may

need to firm-up

its current situation,

perhaps by exploring

new competitive

niches

or searching out

new, more promising

product/market

areas, before

moving to the challenges

of growth.

Growth efforts

are best and most

safely pursued

when

relative

competitive

position and product

and industry attractiveness

are positive.

Given

relative competitive

strength and product

and industry

attractiveness, a

number of growth­

oriented strategic

postures are

possible. Depending

on the nature

of the industry

and the

specifics of

the business, any

of the six strategic

postures-single

product/market,

niche,

expansive

growth, developmental

growth,

product innovation,

or diversification-may

foster

effective

growth. Rather

than attempt

to prescribe specific

postures, it

is best simply to

encourage

planners

to choose new postures

that complement

the existing business

postures

and

mission

statement. If,

at any time during

growth, the business

realizes that

its relative internal

or

competitive strength

is being diminished,

a stabilization

of growth is

necessary until

the

internal

condition is

rectified.

SUMMARY

In this chapter we

have presented two

very important

facets of the action

phase of the strategic

planning process

for small businesses.

At the outset,

the mission must

be carefully determined.

This gives the general

direction that

the business will

take, state the management

philosophy

to

be followed,

and, implicitly,

indicate where

the business is not

headed.

Once the

mission statement

has been determined

and written,

the next step is to

determine the

strategic posture
that the firm will
assume. This
may be the single
product or market
posture,

the niche posture,
the expansive
growth posture,
the developmental
posture, the
innovation

posture,
or the diversification
posture.
The particular posture
assumed will
depend heavily
on

the strengths
and weaknesses of
the firm, the nature
of the firm's environment,
and the
particular

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