by: Jean Paolo G. Lacap
With
today’s changing market landscape and with the varying demands, needs, and
wants of customers, surviving the competition is indeed a hard task. Many
successful businesses prospered because of the innovation they have created,
the unique and working strategies, and their adaptability to changes in the
environment. In order to prosper in the rigid and stiff competition, each
enterprise must have competitive advantage. The sources of competitive
advantage may come from different factors. One is the business core
competencies or the resources of the business that considered unique within the
boundary of the enterprise. Thus, competitive advantage may lead to high
profitability. It is also important to know how to analyze opportunities in the
market and take advantage of it. Exploiting the opportunities in the market may
lead to creation of a product that is superior to the existing one and thus may
lead to business success.
The Business Planning Process
Establishing
a new business venture requires solid planning. Any individual who wishes to
come up with a venture needs to learn the fundamentals of business planning. Business planning requires several
steps to fulfill it. It is defined as the process in which an entrepreneur
formulates a framework to efficiently utilize his/her resources and make sound
business decision thus increasing the possibility of business success. The
first phase of business planning is product
development. In this stage, the entrepreneur brainstorms different unique
business ideas based on the analysis of the market. Product development also
entails the assessment of the needs and wants of the customers particularly
those that are presently not satisfied by the existing enterprises. Thus,
environmental scanning is an imperative. Environmental scanning is the
process of analyzing the different factors affecting the micro and macro
environments of the business. From the different ideas, the entrepreneur
selects the best idea by considering various parameters such as: his/her
initial capital, manpower requirement, equipment/machinery needed to produce
the product concept and so on. The second phase of business planning is product testing. This stage entails
piloting the product in the market to test if the customer will like the
business concept or not. This stage necessitates in identifying the strengths
and weaknesses of the product in order to gauge product's viability in the market. In some
cases, product concept may conform to minor or major changes depending on the
result of product testing. The third stage is strategy formulation. This phase the entrepreneur crafts marketing
strategies, human resource strategies, production/operations strategies, and
financial strategies. This part still requires further research such as the
identification of possible competitors, the substitute products existing in the
market, the suppliers, and so on. SWOT (Strengths,
Weaknesses, Opportunities, Threats) analysis is management
tool that can be used in formulation strategies. SWOT analysis is a useful
business tool in analyzing the internal environment by identifying the
strengths and weaknesses of the company and scrutiny of the external
environment by recognizing the opportunities and threats in the market.
Figure 1. The Business Planning Process
And
fourth stage is the business plan write-up.
This phase specifies the different and vital parts of a business plan. A
typical business plan includes: executive summary, industry description,
marketing aspect, human resource aspect, production/operations aspect,
financial aspect, and other pertinent business documents. And the
last phase is editing and proofreading.
Since the business plan will serve as the basis of the entrepreneur in
establishing his/her venture, error-free manuscript is necessary. This avoids
pitfalls and possible confusions on the part of the entrepreneur.
