AMANI DAVID
DEP: M&E/CBSL
11th April, 2018/Wednesday (Lecture 1)
Strategic – describes something which is extraordinary. It is used to mean systematic or well organized
decisions or actions which have been made or taken to offer significant results or outcomes. In modern
world, the term is considered as a new way or a postmodern approach of looking or seeing issues.
General meaning of the term strategic
It is a situation of being focused, predetermined, motivated, authoritative and aggressive in striving to
achieve something.
From a strategic lens successful business are not born but are made. In other words business success is
on the hands of an individual who owns or manages a given business. This further implies that success
and failure of any business firm are attributed by owners or managers themselves. Thus, success or
failure is always considered as planned events and not accidental events.
Thus the term strategic from business planning perspectives may refer to;
Ability of a person to think strategically
It is all about resources mobilization
It is all about strategic allocation of resources by linking them with business environment
It is how resources are linked into (linkage), and how linkages are avoided.
It is defining of dreams and priorities into vision
It is how to design mission that drives your vision
It is about looking opportunities and linking them with appropriate business ideas
It is all about priorities setting
It is all about an individual dreams
These are characteristics that distinguish a person who is planning for his or her business and another
who is planning for the same but strategically.
In traditional business planning approaches, the decision might be, “the business should be
competitive so as to survive.” However in strategic perspective on starts to think on why, how, what,
when, who, etc. strategic business planning is very specific and focused it requires specific actions and
decisions rather than generalization.
Strategic business planning – fundamental business concept which integrates the two fundamentals of
strategy which are deciding where you want to go and how to implement operational initiates to take
you there, coherently in one process.(setting of a direction to be respected by everyone within the
business)
BENEFITS OF STRATEGIC BUSINESS PLANNING
Stimulates or stretch thinking at the highest levels which are not ordinary levels
It promotes or motivates a person to be very specific determined and focused
It ensures resources mobilization, linkage and minimizing linkages.
BUSINESS VIABILITY
A business is said to be viable if there is clear possibilities of being successful. In other words, a
viable business is strongly linked with opportunities (Encarta dictionary 2009). Viability is about able to
grow, survive or able to be done or worth doing. A viable business must be both feasible and profit
making.
MARKET PARAMETERS USED TO DESCRIBE BUSINESS VIABILITY
Market viability
From a market viability point of view, a viable business must be strongly related with its current
and potential customers. Thus, a business is said to be viable if it is capable to meet current
needs and wants of its potential customers. Therefore, market viability defines the business
strengths or capabilities to meet customer expectations.
Technical viability
Business viability can be defined by looking to what extent a business is technically well
structured and arranged. Technical viability includes all institutional arrangements and
systematic issues which influence business performance. It sometimes include even human
behavior that are necessary for operationalizing various activities.
Financial viability
Financial aspect is used to define the viability of a business by looking input-output ratio or
analysis. Thus, the business is said to be viable if there is a great chance for making profits given
a certain level of investment
Economic viability
From economics perspective a business must be economically viable. A viable business is the
one which economizes resources by utilizing them carefully. It is connected to effective
utilization of resources as well as its ability to accommodate various economic situation or
pressures.
2. TABLE OF CONTENTS
This assists your reader to go through your plan very quickly by pointing out the key issues through the
table of contents. Without it, a reader might unnecessarily have to go through the whole document to
see the parts he is interested in.
Cont.………. (Lecture 5)
3. AN EXECUTIVE SUMMARY
It is worth noting that not all readers may go through the whole plan. Some readers may not go through
the whole plan or may want to prove the quality of your plan before reading the whole plan. Thus an
executive summary summarizes the whole plan. It is a part of a business plan which help the reader to
go through the plan within a reasonable amount of time.
Definitions:
It is a brief yet concise statement which is designed to give your reader an overview about your
business by summarizing the key points. (Record, 2007)
Or. It is a condensed abstract of a business plan used to spark the reader’s interest in the
business and to highlight crucial information. (Hatten, 2010)
Or. It is one to two pages document which gives an overview of the whole document.
Or. It is the thesis statement of your business plan. It summarizes who are you, what your
company does, where your company is going, why is it going where it is going and how it will get
there.
Or. It is a synopsis of the entire report in two or three pages. Emphasizes the genetic uniqueness
of your company ad suggests the nature of the matrix in which you company will operate.
It is considered as a standalone document or component, as one can make decision regarding the whole
plan based on the information found in this part. It is necessary to note that an executive summary is
prepared after all components have been accomplished.
It should be prepared in a persuasive language as the intention is to build plan credibility and
attract your reader to call you for further consideration.
It should be presented in a summary form. Specifically, the part should be within 2-3 ages. If
possible keep it within 2 pages. Some scholars suggest that for each 20-50 pages, 1 page.
It should contain only sensitive information which are so much important in assisting the reader
to take a correct judgment.
It must be able to grasp reader interest at the level of making decision to call you for further
discussion.
Business description as a part of a business plan can be described as an avenue to describe the
business in a big picture on the eyes of your readers. It has to consist any information deemed necessary
to make your business known and be differentiated against other businesses. This part can be considered
as the heart of the plan, because other parts must reflect what is within this part.
According to Miller and Arkebauer (1999) the business description is the first section of your plan
after the executive summary. They went on saying, in two or three pages you should briefly describe why
the company exists, its structure, where it has been, where it is going, who owns it and what makes it
special.
According to Longenecker et al., (2008) business description gives a brief picture of the firm. The
business description informs the reader of the type of business being proposed, the firm’s objectives,
where the firm is located and whether it will serve a local or international market. It describes the
business’s current situation and overall big picture.
The majority literature shows that business description is very important in attracting customer
attention towards the business. However, it is true that this section of a business plan can sometimes be
used to attract attention of special groups such as business partners, investors, etc. therefore, the section
requires similar weight that could be invested in preparing other sections of a business plan.
Remember your information is for identification and differentiation. So emphasize on these areas.
Remember you are defining the business. So try as much as you can to show why the business is
distinctive and in which aspects differs from other businesses.
Because you are describing the business, observe chronological flow of information. Arrange your
details in such a way one can comprehend what you are saying.
Remember that most of information which you are going to use here, may be found in other parts
of the plan. However here the issue is how those information are enough to exhaustively define
your business and to make it unique.
For those ideas or businesses which are not new, this section can be used to describe why you
want to pursue the idea or the business.
Business location.
It is recommended to offer information about where the business is located or where the business
will be located. Basically, physical address is an essential element in describing a business, as it shows
the differences between your business and others. This is a strategic issue and can determine success.
Thus try to show why the location of your business is potential enough to guarantee success.
Current position of the business.
If it is an ongoing business, you will be required to say about the business position (status). Try to
show whether the business is growing, stagnating, or declining. Again, perhaps you have to say about
the reasons for any status. For a new business, try to explain how the business will be moving from
one stage to another.
Financial status.
Regardless of the nature of the business e.g. either a new one or old one, financial status is very
important. Most of business analysts invest much their time in assessing business credibility
through analyzing financial position of a business. For an ongoing business, explain about profit
level, cash flow etc. on the other side, for a new business, tell us about………..
SOURCES OF INFORMATION
As we have seen, this part requires sufficient information before preparing it. Thus, the following sources
can be used for facts finding, data collection or information searching.
Business and economics magazines, newspapers etc.
Through visiting internet, online libraries etc.
Through watching business news, business documentaries etc.
Through reading relevant literatures, books, research and academic papers. Etc.
Business research and customer survey activities
Brainstorming and focus group discussion
Formal and informal sources such as customer interviews etc.
Institutions dealing with statistics e.g. NBS, BOT etc.
Specific institutions operating in various industries or sectors. For instance; TSPF, TCT etc.
INDUSTRY ANALYSIS
In industry analysis the primary purpose is to describe the structure of an industry which the business is
going to compete. The main focus is to analyze the extent of which the industry is attractive enough to
compete and to operate. Likewise, then results of this analysis will be opportunities and threats. Hence,
the decision will be how are you going to take advantage of opportunities and how are you going to
strategize so as to face the challenges. The analysis will analyze areas like business environment,
competition analysis and competitors’ analysis etc.