CHAPTER 4 DESIGNING A COMPETITIVE BUSINESS MODEL AND BUILDING A SOLID STRATEGIC PLANThink little goals and expect little achievement. Think big goals and win big success. David Joseph Schwartz Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before the defeat. General Sun Tzu Learning Objectives On completion of this chapter, you will be able to:-Understand the importance of strategic management to a small business.Explain why and how a small business must create a competitive advantage in the market.Develop a strategic plan for a business using the nine steps in the strategic planning process.Discuss the characteristic of the three basic strategic: low cost, differentiation and focus and know when to employ them.Understanding the importance of controls such as the balanced scorecard in the planning process.
CHAPTER 4 DESIGNING A COMPETITIVE BUSINESS MODEL AND BUILDING A SOLID STRATEGIC PLAN Intellectual capital A key source of a company’s competitive advantage that is comprised of 1) human capital 2) structural capital and 3) customer capital. Strategic management The process of developing a game plan to guide a company as it strives to accomplish its vision, mission, goals and objectives and to keep it from staying of course. Competitive advantageThe aggregation of factors that sets a small business apart from its competitors and gives it a unique position in the market superior to its competition.
CHAPTER 4DESIGNING A COMPETITIVE BUSINESS MODEL AND BUILDING A SOLID STRATEGIC PLAN Core competencies A unique set of capabilities that a company develops in key operational areas that allow it to vault past competitors.
CHAPTER 4DESIGNING A COMPETITIVE BUSINESS MODEL AND BUILDING A SOLID STRATEGIC PLAN The strategic management processStep 1 Develop a clear vision and translate it into a meaningful mission statement. Step 2 Assess the company’s strengths and weaknesses.Step 3 Scan the environment for significant opportunities and threats facing the business. Step 4 Identify the key factors for success in the business. Step 5 Analyze the competition. Step 6 Create company goals and objectives.Step 7 Formulate strategic options and select the appropriate strategies. Step 8 Translate strategic plan into action plan. Step 9 establish accurate controls.
CHAPTER 4 DESIGNING A COMPETITIVE BUSINESS MODEL AND BUILDING A SOLID STRATEGIC PLAN Balanced scorecard A set of multidimensional measurement that are unique to a company and that incorporate both financial and operationalmeasures to give managers a quick yet comprehensive picture of a company’s overall performance. Five important perspectives balance score card. 1) Customer perspective 2) Internal business perspective 3) Financial perspective 4) Corporate citizenship 5) Innovation and learning perspective