Saturday, May 11, 2019
Small to medium size business strategy
Small to medium size businesses limit their range of planning tools to include SWOT, PESTEL, financial analysis, and budgeting. And larger firms not only utilize these methods but also add HRM, organizational structure, strategic group analysis, and scenario construction. I agree that larger companies have the benefit of having in-house staff dedicated to developing the strategic plan and in many cases also bring in outside consultants to help in this process.
When evaluating the decisions when entering the international market, you discuss how the primary decision when entering the foreign market is determining if they want to customize the product and take a think local-act local approach. I believe that before you can even get to that point, the company must evaluate if the market is receptive to new entrants and what obstacles need to be overcome before you can begin to evaluate product variations. I agree that that decision is key and the ability to customize your product line to meet local needs is always good but in some cases it is not cost effective and needed for the success of the business.
Starting off any strategic plan without knowing the cultural differences and a clear understanding of how your customers shop is a guarantee of failure. You define strategic planning by outlining the 5 stages as defined by Thomson (2018). First these include the development of a strategic vision, mission statement, and a set of core values. The second stage that you discuss is the setting of strategic and financial objectives that the team can clearly understand and believe in. Third, you discussed crafting the strategy at all levels including how to distinguish the company from its competitors. Fourth was the execution of the strategy by management. And last, evaluating the progress and making adjustments as needed.
When looking at single vs multi-business strategies, you outlined the different approaches each type takes and how in multi-business units the strategic planning must be more intricate. I agree with this analysis because if it is not then the different business units can vary from the main vision of the company. But ultimately to your point, both types use the same base line to accomplish their goals. Your evaluation of the expansion into international markets, and utilizing Walmart as a real-life example, really tied together the approach that must be needed in order for any international expansion to work. Not taking into consideration local cultural habits and not truly understand how their current approach to customer service would translate to the new markets led to their failure. I would have liked in your example if you would have called out how Walmart was too rigid in their plan by assuming, they did not have to adapt to local customs and failed to utilize the evaluation step to make the needed adjustments.
Thompson. (2018). Crafting & Executing Strategy: The Quest for Competitive Advantage 21st ed. McGraw-Hill ISBN: 9781259732782. Retrieved from: http://www.freemanagementresources.com
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