1. CHAPTER 4
DESIGNING A COMPETITIVE BUSINESS MODEL
AND BUILDING A SOLID STRATEGIC PLAN
Think 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.

2. 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 advantage
The 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.

3. CHAPTER 4
DESIGNING 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.

4. CHAPTER 4
DESIGNING A COMPETITIVE BUSINESS MODEL
AND BUILDING A SOLID STRATEGIC PLAN
The strategic management process
Step 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.

5. 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 operational
measures 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