Strategic Growth in Entrepreneurship
Entrepreneur can have strategic growth through strategic planning. Every entrepreneur must do some kind of planning for
succession of venture usually it is informal and unsystematic. Based on nature, size and structure of the business, the requirement
of systematic planning changes. Small business can use informal planning whereas an emerging business with increasing
employees, size and market operations must have a formal planning.
There are some reasons for shifting an informal to a formal systematic style of planning. First is the extent of uncertainity
which a venture is going through to become established and progress. Second is competitor's strength, it requires systematic
planning for monitoring operations and objectives of new venture more closely. Finally, the experience possessed by entrepreneur
may decide the extent of formal planning.
Strategic Planning
Strategic planning is a long-term plan developed to guide the venture’s performance and to effectively manage the
environmental opportunities and threats by considering its strengths and weaknesses. In other words, it is an action plan designed to
facilitate the venture to achieve the desired performances by a careful analysis of opportunities, threats, strengths and weaknesses.
Strategic Planning Process
Following are the steps involved in strategic planning process,
Step-1: Deciding on the Business Mission
As SBUs are operating in different market conditions, business mission needs to be established by considering both the
overall corporate mission and objectives of the firm. Business mission must represent its motive of existence into business and
about its role.
Step-2: Performing SWOT Analysis
SWOT analysis is conducted by the firm to evaluate strength, weakness, opportunity and threat of each and every business
unit. Strengths and weakness analysis is done to analyse the internal strengths of the firm. Whereas, opportunity and threat
analysis is done to analyse the external environment inorder to determine the future risks and return opportunities associated with
the business.
Step-3: Analysis External Environment for the Identification of Opportunities and Threats
External evaluation involves the determination of all those factors which are external to the organisation and which
provide opportunities or impose threats to the organisation. Both macro and micro environmental factors are analysed and
monitored in the external analysis. Through such analysis, both potential opportunities and threats of the firm can be identified
so as to optimally exploit the opportunities and to overcome threats. Market opportunity analysis is applied in determining the
market attractiveness and probability of success of the opportunity.
Step-4: Internal Evaluation for Strengths and Weaknesses
Internal evaluation is performed to be aware about the resources, behaviour, strengths, weaknesses, synergistic effects
and distinctive competencies. It is an evaluation of the internal capability of the firm which can be optimally utilized for the
exploitation of existing opportunities and for opposing the external threats of an environment.
SWOT analysis is very effective and useful in marketing analysis and strategy formulation. It helps in identifying the
extent to which it is necessary to bring changes in a strategy
Step-5: Formulation of Business Goals
The step ahead of the SWOT analysis involves the formulation of reliable and measurable goals for the business. Such goals
are used to explain the objectives of business related to its marketing expenditure for a particular period of time. Achievement of
a desired market share, profit, sales and level of reputation are some of the business goals.
Step-6: Formulation of Business Strategy
The long-term goal directed actions are usually referred to as a “strategy”. An appropriate strategy is selected by
considering the strengths and goals formulated for the business unit. Goals indicate what is to be achieved whereas, strategy
represents the courses of action taken to achieve these goals.
According to Michael Porter, Firms can follow three different generic strategies for the accomplishment of organisational
goals. They are cost strategy, differentiation strategy and the focus strategy. By following the cost Strategy, companies can grab
large amount of market share by producing goods and by delivering services at lower cost than their competitors. However, by
differentiating the products and services, firms can gain a competitive advantage over others. In a Focus Strategy, firms focus
mainly on the needs and satisfaction of specific group of customers.
Step-7: Formulation of Programs
After the business unit planning, the marketing manager needs to prepare comprehensive supporting programs. These
programs need to be functional that are helpful in the implementation of strategies. Marketing managers must prepare a marketing
plan which involves cost estimates, allocation of budget and investments related to a specific program. When program is
implemented, it specifies the structures, responsibilities and role of every member of an organisation.
Step-8: Feedback and Control
The final step in strategic planning process is to assess
and analyse the entire process at different points of time.
Firm set standards and targets to evaluate the performance
and measures performance as per these standards. After
comparing, corrective actions need to be taken to fill the
gap between the expected outcomes and actually achieved
outcomes. The feedback is useful for the determination of
the market response towards the effectiveness of marketing
strategy. The entire planning process can be controlled by
several methods such as, cost control, performance control
and adaptability control.