Module 11 Flashcards
refers to the process of determining the primary objectives of the entrepreneurship and then adopting courses of action and allocating resources to achieve those objectives.
strategic planning
strategic planning involves three distinct steps:
The determination of objectives
Adoption of course of action
Allocation of resources
The objectives of the firm are important components of the firm’s strategic planning activities but before these are determined, the firm’s mission statement must first be developed.
The determination of objectives
This term refers to the basic description of the fundamental nature, rationale and direction of the firm. It consists of three concerns:
- how the entrepreneur intends to use his resources;
- how the entrepreneur expects to relate to the ever-changing environment; and
- the kinds of values the entrepreneur intends to offer to his customers.
The mission statement
This term refers to the specific performance targets that the entrepreneurship hopes to accomplish. The objectives define, in specific terms, how the firm’s mission will be realized.
Strategic objectives
After the primary [or strategic] objectives are stablished, the entrepreneur must develop a strategy which is alternately called course of action. A strategy is a carefully designed plan for achieving the firm’s objectives. A strategy indicates how the entrepreneur will attempt to accomplish the goals with the resources available.
adoption of course of action
The firm which is fully aware of its internal environment [specifically its strengths and weaknesses] as well as external environment [specifically threats and opportunities] is most likely to develop a strategy that considers the firm’s needs.
The purpose of SWOT Analysis is to match the firm’s strengths and weaknesses with external opportunities and treats to determine what strategy to adopt.
swot analysis
Refers to a skill, a competence, a valuable organizational resource or competitive capability, or an achievement that gives the firm a market advantage
firm’s strength
refers to something a company lacks or does poorly [compared with others] or a condition that puts it at disadvantage.
firm’s weakness
refers to the chance offered by the external environment to improve the firm’s situation significantly.
opportunity
refers to a challenge posed by an unfavorable trend or development in the external environment that would lead to, in the absence of purposeful entrepreneurial action, the erosion of the entrepreneurship’s position.
threats
are supplementary tools for SWOT analysis. It is an estimate or prediction of the future sales or income of the firm. Forecasts may be short-term [one year or less] medium-term [one to five years], long-term [over five years]
forecasts
are often determined through a combination of statistical and intuitive forecasts tempered by the experience of the entrepreneur
sales forecasts
Strategies determine the best way to use resources. There is a need, however to develop tactics which will be used to implement the strategies. Tactics are more detailed and they are used to implement the strategies. Tactics are more detailed and they are used to determined how the specific task can best be accomplished on time with available resources.
implementing strategic methods
The specific aim for planning is to be able to deploy the right quality and quantity of resources in the various activities required to achieve objectives. The resources would be indicated in terms of human and nonhuman elements.
deploying the resources
fundamental strategies for small businesse
There are certain basic strategies that are necessary for survival of small business. These are the following.
- Flexible strategy
- strategy of effectiveness as a higher priority; and
- strategy of starting simple
Small business ventures are not usually afforded the advantages enjoyed by large business. It is very difficult for a small business to affect changes in its environment because its sources are usually limited. For instance, a small business cannot match the adverting budget of a large business if they are not in competition with one another
flexibility strategy
Effectiveness is sometimes sacrificed for the sake of efficiency. Although efficiency is a desirable goal, it is oftentimes disastrous for small business to neglect effectiveness.
Strategy of Effectiveness as a Higher Priority
In starting a new business venture, the entrepreneur often encounter problems related to financing. The temptation is great for entrepreneur to finance all the activities required in operating the venture.
strategy starting simple
In determining what strategy to adapt, the entrepreneur is confronted with two general situation
- is he organizing a new business
- or he currently running old business?
strategy concerns of small business
This term refers to one that will operated for the first time by small business operator. If so, his option consist of the following.
- Acquiring existing business;
- organizing new business ;and
- buying a franchise
new business
Why Small Business Operators Ignore Strategic Planning
- lack of expertise
- inability to get started
- uncomfortable, often intangible variables
- resource poverty
- focus on daily operation
- failure to realize the importance of strategic planning
Few small business operators are trained in strategic planning
lacks of expertise
Even if small business operators are convinced about the importance of planning, they fail to get lack of sufficient exposure to planning activities.
inability to get started
The uncontrolled and often intangible variables complicate planning which later on discourages the small business operator from repeating the exercise.
uncomfortable, often intangible variables
Planning requires time, but the small business operator often
times does not have it.
resource poverty
The daily requirements of small business usually keep the small business operator to busy that he is left with no time on planning.
focus on daily operation
The small business operator is expose to the environment of successful Filipino business man who do not engage in strategic planning.
failure to realize the importance of strategic planning
