In a chat and one of them raised me the following question: But really, strategic planning is useful in small business? It is not a tool reserved for large companies?
His family business manager adopts a form of inherited work that really works, we will not deceive, we argue against strategic planning: “We do not have a strategic plan as such but we clear our strategy. We all know what we do and our goal is to grow an annual% “
Starting from the basis that he represents the target company and only occurs to me to put to whether, entire company has equally clear? Is it agreed goals shared by all components of the organization?
Like him, many entrepreneurs with this thought often do not consider these questions and know if, do you really want to grow? How will you do it? What investments need to do? What will be the economic situation in the coming years and are prepared to face adverse economic conditions or crisis? What segments are interested profitability cover and what they have in each of them? Who is your competition? In a globalized society like today, how new technologies and the Internet affect your business?
Not answer these questions, no clear certainty, we implied that the company is on the market without a clear destination. Faced with such certainty, one must understand the need to exercise planning at the strategic level. (If this is the first time you hear about strategic planning, I recommend you go through Strategic Planning What? And Why? . From this point ..
Strategy vs. Competitive advantage
Any strategy must be defined as a series of actions aimed at obtaining competitive advantages, understanding these competitive advantages as our positive differentiation from competition, perceived by the client and maintained over time. The error to be avoided is to create superfluous strategies without a final targeting high operational level.
A strategy that did not lead to competitive advantages is a useless strategy and will not bring any improvement to the organization, directly leading us to price competition that will eventually reduce our profit margin; this is a common trend at the moment after a stage where the overall quality has concentrated the efforts of many companies. The idea of sacrificing margin to an increasingly competitive competition, presents a symptom of not having a clear strategy.
The solution, implement a strategic management system based on planning, implementation and control oriented strategy clear and quantified targets.
Michael Porter spelled out, “The company without a strategy is willing to try anything” (The company without a strategy is willing to try anything), and this is precisely what we must avoid. If it is not clear the path chosen or way forward, or if we are not sure what leads us to achieve our objectives, the company will tend to go jumps kills following a system of trial and error with most of the weight of the decisions and start to back owner or manager.
Once we are in a dynamic operation of this type and, in doubt against planning, the recommendation is to start conducting an internal reflection, with what our company has competitive advantages?
In the event that we are unable to answer this question, perhaps we should consider the possibility to start developing strategies and working methods that allow us to identify our competitive advantages, achieving them and exploit them within the Strategic Planning; and thus, know our market position and the reasons that lead us to dispose of it.
The increasing incorporation of new technologies to the management and professionalization of competition, change the way we do business. Know why not work a particular line of business and especially to know why it works, it is vital to establish a competitive edge in the market also.
Therefore, to the question that gives title to this post and I raised this good friend, my answer is NO. Strategic planning is a process of searching for the “Core Competency” of our company.
The strategic planning possible therefore establish our roadmap and indicators that will allow us to reach and analyze compliance with the objectives, in addition to establishing different scenarios future in which our behavior plan according to these changes increase our flexibility in making changes in our environment.
It is a competitive process improvement that will allow us to strengthen our position in the market and the SME, of course, is not exempt.
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