What is strategy for small business? Small business strategies 2022

What is strategy for small business? Small business strategies 2022

A strategy In small business is a general plan that defines the decisions and actions to be followed to reach the set goal.

business strategies
Small business strategies

 This expression originated first in military plans, and then its use evolved to become a common expression in planning processes at the level of individuals and organizations. 

Should a small business also have a ?strategy

The reality is that a small enterprise needs to have a clear strategy to govern its decisions, as it does not bear making many wrong decisions with its limited resources, which are not in the direction of achieving the required goals.

Every organization and every individual has his own strategy, even if it is informal or unwritten, and the more well-thought-out this strategy is, the more it helps to reach the desired goals.

 Having a clear strategy for an individual or an organization helps him to make decisions and initiatives instead of waiting for events around him to take action.

 Also, an organization that has a clear strategy will always have a forward-looking vision and a good expectation of events so that it can benefit from them in order to achieve its goals.

Definition of Strategic Management

It is the art and science of identifying, implementing, following up and evaluating decisions that enable an organization to achieve its goals.

From this definition, we find that Strategic Management represents a logical, organized and objective entrance to determine the future directions of the organization. 

The definition also includes that it focuses on integrating the elements of the project together from management, marketing, financing and production processes towards achieving the set goals.

Advantages of Strategic Management

Strategic management brings many benefits to the organization, including financial and non-financial.

  • Financial benefits

Studies show that organizations that follow strategic planning are more profitable and productive than others, because they make good use of time and resources.

Also, the time and resources wasted in correcting wrong and random decisions are minimal or non-existent, 

and these institutions are more able to evaluate and arrange opportunities and priorities and thus make good use of them.

  • Non-financial benefits

The strategic management of the organization provides many non-financial benefits that result from the clarity of the vision of all members of the organization or the project of the goals and ways to reach them:

  • trategic management helps to integrate the efforts of individuals into a single line in the direction of the goal.
  • They also serve to reduce the resistance of individuals to managerial decisions.
  •  It helps to see the problems of the organization objectively.
  • It encourages positive, objective thinking.
  • It also provides an introduction to the opportunities and challenges facing the organization .
  • In the end, it leads to a degree of discipline and order that helps to manage the project well.

How to define the strategy for your ?project

In simple steps, the project strategy can be formulated as follows:
  1. Determine the primary task that your project performs .
  2. Identify the opportunities and threats facing the project.
  3. Identify weaknesses and strengths within the elements of your project.
  4. After studying the previous items-set your long-term goals.
  5. Identify the alternatives available to you to achieve these goals.
  6. Compare these alternatives to choose the best possible strategy to achieve the goal.

Strategic decisions

Having a clear strategy helps in making the right decisions that govern the performance of individuals and the performance of the organization as a whole, and these decisions include special decisions:

  1. Activities and businesses that the organization must engage in and activities and businesses that it is not preferred to engage in.
  2. Decisions on the allocation and distribution of resources.
  3. Decisions to expand or diversify the product range.
  4. Decisions on market expansion or export.
  5. Decisions on the level of quality .

Thus, defining the strategy helps to make decisions that lead to the organization's commitment to new products, specific markets, 

materials and technology of specific existence, and when followed, it is the shortest way to reach the goals of the organization.

 The strategy is also a common vision within the organization that works to pool efforts in order to achieve uniformity in decisions, and ensures the progress of the organization on the way to achieving its goals.

Defining the small business strategy:

The small entrepreneur must have a clear strategy that can be reached in simple steps, he must first determine the basic task for which the project was carried out.

He has to determine his own abilities and characteristics that help him to continue ( competitive advantage),

 he also has to determine the desires and expectations of the consumer of the commodity that he produces, and finally he has to determine for himself the position and field of competition in which his abilities enable him to excel.

One of the most important things that the entrepreneur must determine is:

  1. The final determination of the location and scope of the competition.
  2. Determine consumer expectations.
  3. Define the primary task.
  4. Determination of self-abilities and competitive advantage:.

1-define the basic task:

The primary task of the microenterprise is the reason for its establishment: what work will it perform And this work does not have to be very specific in a narrow scope.

The small entrepreneur must define the task of his project and also must have a vision of what the project will be in the future.

2-identification of self-abilities and competitive advantage:

Self-abilities means what your project can offer better than other similar projects, this may be by:

  •  Provide outstanding service.
  • Or a certain service for the entrepreneur.
  •  Or an innovative idea.
  • Or an advantage that allows him to get production items at a low price.
  •  Or better quality.
  • Or more speed in the performance of the service or other features.

It is noted that these advantages are studied in comparison with what competitors can offer, that identifying, strengthening and investing in a competitive advantage is the basis for the success of a small enterprise.

 However, he notes that these competitive advantages are not always constant, but they need to be constantly reviewed so as not to lose their value due to their insignificance to the customer or because of the ability of competitors to offer a better advantage than we offer.

 This helps us to continuously develop and improve our competitive advantage, because what we see today as a competitive advantage may become tomorrow less than the appropriate rate of competition in the market.

3-determine consumer expectations:

The project faces a big problem if its own capabilities and competitive advantages are not of great importance to the consumer of the good or service, and therefore it is important to study the desires and expectations of the consumer،

 To find out the factors that determine purchasing decisions, whether the factors that draw the consumer's attention to evaluate the commodity or the factors that return the final purchase decision when choosing between more than one alternative. 

It should also be noted that these factors are also changing over time and that consumer expectations and desires are evolving, so what was previously considered a high degree of quality has now become an irreducible minimum.

Types of competitive advantages

There are four main areas that a small project can compete in: cost, quality, configuration, and speed.

1 competition for the cost "price":

Although price competition is the easiest type of competition, a small business should not build its competitive advantage on it, because it is also the easiest for other competitors.

It is easy for them to reduce the price to the extent that a small project cannot afford, which causes it to be easily taken out of the market.

In general, a project that targets price competition seeks to reduce waste, increase productivity, and may also seek to mechanize work if Labor is too expensive.

 However, the best way is always to increase the productivity of workers by training them to raise production rates and reduce losses.

2 competition for quality:

A small business must take the initiative to improve the quality of its product and not only face the quality levels imposed by others on it, it must constantly develop quality levels and strive to be ahead of others in this.

Quality should not be seen as reducing the defects of the product, but rather as a way to delight and satisfy the consumer, making him more connected to the commodity.

It should be noted that quality should be determined by the consumer and not imposed by the producer, and it should be seen as a tool for the success of the project.

3 competition for the assortment of products:

The project must be able to diversify in the assortment of products in order to be able to adapt to the needs of customers, 

and it must also be able to form quickly with the development of needs and tastes, otherwise the product it offers has become stagnant and is not required by customers.

However, production conditions and cost may stand in the way of the desire to diversify, because this diversification may require fundamental changes in production lines, or workers and technicians,

 so the small enterprise must balance between diversification and stability in the product.

4 competition for the speed of service delivery:

The speed of performance has become one of the important competitive advantages, especially in service projects, and the competition for the speed of service requires that the project has a high ability to adapt and develop.

To be in close and continuous contact with customers, and to keep in mind the performance of competitors in this field. 

A common example in which it is possible to compete on the speed of performance are restaurants, especially with a delivery service, as well as postal services and shipping and unloading.

The above can be summarized in that a small project is more in need than others to have its own strategy that governs its performance,

 and that it must identify the strengths and weaknesses of its project, as well as the needs of its customers to reach the aspects in which it can be distinguished.

Also, defining the strategies of the project enables it to make decisions about the products and markets it should enter, as well as enable it to make decisions about the services provided.

 One of the most important advantages provided by a clear strategy for the project is that the project has a clear competitive advantage that is required from customers and suits their needs. 

By knowing and strengthening this competitive advantage, the small enterprise is more able to continue in the market, compete and develop.

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