1. - Refers to the process of determining the:
1. primary objectives of the entrepreneurship
2. adopting courses of action and
3. allocating resources to achieve those objectives.
- It also provides the entrepreneur with a
systematic approach to the achievement of the
firm’s objective.
2.
The Determination of objectives
- 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 mission statement- refers to the basic
description of the fundamental nature, rationale, and
direction of the firm. It consists of 3 concerns:
1. How the entrepreneur intends to use his resources;
2. How the entrepreneur expects to relate to ever-
changing environment; and
3. The kinds of values the entrepreneur intends to offer
to his customers.
3.
“ The mission of Birdie Poultry Products is to
provide the various poultry requirements of
consumers. This services of retailers located in
the various malls and public markets in Nueva
Ecija are tapped as means of distributing our
products. In addition to the assortment of
products, we stress quality and efficient service.
We intend to cover all towns of Nueva Ecija
within 5 years through effective pricing and
promotion.”
4.
Strategic objectives
- This refers to specific performance targets that the
entrepreneurship hopes to accomplish. The
objectives define, in specific terms, how the frim’s
mission will be realized.
Ex.
1.Expand production capacity by 50% within 2 years.
2. Increase sales by 50 % by the year 2022;
3. Increase market share by 10% every 2 years; and
4. Increase the number of outlets by three within 3
years.
5.
- A strategy that must be develop by an entrepreneur
after the primary objectives are established.
1. Establish branches in strategic locations;
2. Design a system that will attract person’s with high
potentials to work with the company;
3. Engage in the recruitment of retailers from nearby
provinces; and
4. Engage in building up the company’s image as a
reliable supplier of quality poultry products.
Adoption of course action
6.
Most popular tools
1. SWOT analysis; and]
2. Forecasts of future sales performance.
SWOT analysis- the firm which is fully aware of its
internal environment(specifically its strengths and
weaknesses) as well as its external environment
(specifically threats and opportunities) is most likely to
develop a strategy that considers the firm’s needs.
- an organized method of assessing firm’s
strengths and weaknesses and threats and
opportunities in the external environment that confront
or will not confront.
7.
- the purpose is to match the firm’s strengths and
weaknesses with external opportunities and threats to
determine what strategy to adopt.
STRENGTHS- refers to a skill, a competence, a valuable
organizational resource or competitive capability or an
achievement that gives a firm a market advantage.
Ex.
1. A recording firm’s unique line- up of contract singers;
2. A company’s ownership of the land that is the source of
high grade material required for producing it’s products;
3. The strategic location of the firm’s sales offices;
4. The firm’s exclusive supply contract with reliable
manufacturer
8.
WEAKNESSES – refers to something a company lacks
or does poorly compared to others or a condition that
puts it at a disadvantage. It must be noted, however,
that depending on the competitive situation, a
weakness may or may not make a company vulnerable
to competition.
Ex.
1. Lack of qualified managers;
2. Poor design of the firm’s product;
3. Low employee morale’
4. Poor location of the firm’s sales office.
9.
OPPORTUNITINY- refers to the chance offered by the
external environment to improve the firm’s situation
significantly.
Ex.
1.For a motorcycle trading firm: the escalating cost of
fuel.
2. For a small restaurant: the withdrawal from business
a major competitor;
3. For a tailor residing in a provincial city; the absence
of a reliable shop; and
4. For a newspaper dealer: an exclusive supply contract
for the entire province offered by a major national
publisher.
10.
THREATS- refer to a challenged 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 action.
Ex.
1. To the grocery store : the proposed opening of a
mall in the vicinity;
2. To the restaurant along the highway: the proposed
construction of a diversion road by passing the
highway and restaurant;
3. To the local operator of 20 units of public utility
tricycles: the proposed city ordinance banning
tricycles from plying the major streets of the city.
11.
Forecasts of future sales performance
-are supplementary tools for SWOT Analysis. It
is an estimate or prediction of the future sales or
income of the firm.
-it maybe short –term (one year or less),
medium- term( 1-5 yrs) or long term(over 5 yrs.)
- are often determined through a combination of
statistical and intuitive forecasts tempered by the
experience of the entrepreneur.
12.
Implementing strategic plans
Strategies are useless unless they are
implemented. To put strategies into action, the ff.
activities are required:
1. Identifying the specific methods to be used; and
2. Deploying the resources needed to implement the
intended plans.
13.
Identifying Specific Methods
Strategies determine the best way to use
resources. There is a need, however, to develop tactics
which will be used to implement the strategies.
If “establish branches in strategic locations” is a
stated strategy, the tactical plan to implement may
appear as follows:
1.Identify strategic locations;
2. Determine the potentials of the identified strategic
locations;
3. Set a timetable for installing the branches.
14.
Deploying the resources
The specific aim of planning is to be able to
deploy the right quality and quantity of resources in the
various activities required to achiev the objectives. The
resources would be indicated in terms of human and
non-human elements.
Fundamental Strategies for small business
1. The flexibility strategy;
2. The strategy of effectiveness as priority; and
3. The strategy of staring simple.
