STRATEGIC PLANNING AND tsUSINESS

H
tJ DEYEI,OPMENT

The entrepreneurs are not discotiragecl with the constraints along the causes of our
economic malady. It shouid be turned into positive note and new solutions must be
rnade to rnake them different from other individuals. There are lots of opportunities
for entreprenelrrs who are.hardworking, creative and resourceful, and woukl like to
take the calculated risk.

Business opportunities are wide open for people who would like to invest their
money into gainful business activities. They need to find out this ner,v venture that
interests them and how they can harness their technical knowledge of the frarie.

The search for business opportunity should start r,vith the individual entrepreneur.
FIe has to find out the skills and talent for that particular type of business activity. His
talent ancl skills are the beginning of his great investment in the trade. FIe must have
the passion for independence and w'illingness to work l-rard and long to keep up with
his dream of being an entrepreneur.

Before rrenturing into the field of business the new entrepreneur should look intc
the foliowing factors:

1. Knoru yatw Product or Seroice.

Firs! you must believe on the product or service that vou will offer to vour
customer. If it is a new idea or concept then lreu must be able to convincc. that
you har,'e a r;nique product that would satisfy customers' needs anct wants.
Cristomers want to try new products but it rnust be better than those existing
in the market.

2. Att*lyze the Market Potentials:

The customer base r,vill determine the success n,,our business venture.
The raridel the market potential, the more chances of growth and success. The
entrepreneur must kncu,'his needs and wants and figure ,ll.tt how to satisfy
these needs. Analyze customers' profile as to their buying habits, tlfeir income,
and social status.

3. Detennine the Marketing Strategy.

A unique product or service needs effective distribution strategv to get

customer into the basket of demand potential. Continuous supply deterrnines
product growth. Customers must have access to the product rvhen they
need'it. Outlets must be developed that would answer customers' denrand.
:{h* customers must be able to make suggestions as to product qualitv and
( availability as they arc' the kings and queens of the entrepreneur.
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 4. Know the ComPetitors'
Inlaunchingaproductwithexistingpomp.etitofsy.oumustknowtheir
marketing strategy
strengthsu.rd i"eak resses. Develop new product and
andturntheirweaknessesaS^"*oppo'tunity|gryourproduct.Continuous
quality-product-1 or"service,' ]vlake
innovation r;.;;;;r.h would *eaiitetter
things better and. serve your customers with
loyaltyind dedication and it will
make a great difference'

5. Do not set on Your Lautels' :

changtlg *'l'^1':::::"tt *
The iandscape of business is continuously
rluff t1*' tol expansion and growth
your business a&ivities needs moru prouctLr"
and promotion
and overcome possible competitions. Develop advertising
budget for expansion and
strategy to penitrate theryider market. Deveiop
Get new Iesources and develop
diversification either horizontally or vertically'
new matert"i;.il;;;iir, r"r"ur.Ii frqeus tnat
witt enhance the quality of your
products.

ENYIR ONMENI}{L S CAADIING

and the entrepreneur
The enviFonment of business is vast with opportunities prwailing in the
as weli asthe conditions
rnust have a greatex look into tni, poteriial
community.Theentrepreneur,Sultimateobjectiveindivingintothebusinessworldis
should generate financial gain for the
to make profit. Investment in money and e*ort
entrepreneur.
he must be able to deliver customer
To.generate income for his product or service
to thg development of customer
satisfaciion. The following factors are contributory
satisfaction:
1. Bus,iness Location for SmallEnfiepreneurs'
AretailoutLdt$ol:ird'need.asitethat,isconvenienttoprospectiyecus|om11
A restaurant or an
. in terms of pafking'rpu.u or availabiupr of tr4nsportation.
alea where customers would
entertainment center would..reeJ ample parking
notworryonwheretoleavetheircarswhileenjoyingtheirstay.Thesame
could be ir'ue with a grocery store'
looked into by the
In choosing the location, the following factors must be
entrePreneur: ! '

be generated' It
*rrra u" sustained.wittr-the possible inc;me that will
product or
i, th;;p;;;ting cost that wiil be added to the price of thethose in the
service. The pricelnpui*ust be competitive. enough with
same Iocation'

Teirks of Lease.Agre:ement- The term of lease

must be studied carefully
b.

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 increase the rent of the space when the business condition becomes
favourable and then take over the business.
Type of Goods or Merchandise- A convenient store is located where there
are pedestrians passing by. They need quick and easy access to the
store and would not spend a lot of time to purchase their goods.

d. Income Le:ael of Prospectiae Customer - The type of pedestrians and the

income level of customer must be taken in to account. A good barber
shop or a beauty saion with facilities of air conditioning units and other
amenities need to be located in the community with higher income
bracket.

e. High density sales volume need to be located

Prospectiae Sales Volume -
in shopping area where customers conversed to buy essential goods.
Lower sales volume could be located in the community or secondary
areas like subdivisions or the BARANGAY.

t. Municipal or City Ordinances including taxes and fees - The location must
not violate city or municipal ordinances and the taxes and fees must
be reasonable for the owners of business. Excessive taxation wiltr not
encourage the growth of business in the area.
O
b' Location of the Aress -The area must be free from floods and other
calamities that will endanger the busingss. It must be free from fire
'hazards or other e_nvironmental factors that will disturb the operation
of the business.

2. Location for Small Inilustrial Plant or Manufacturing Facilities

Environmental factors in Iocating a manufacturing plant or industrial
facilities need to be dtudied carefully as plant location is a great factor in the
investment of funds and its profitability in the long run. The industrial facility
must be suitable to the kind of operation. It must comply with gor.ernment
zoning regulations related to pollution and environmental laws.
The following are important factors to consider:
a. Land Ares - The contour of the 1and, its size, and shape must be suitable to
the plant site. It must be free from floods or other environmental hazards
that will disturb operation. The assess value of the property must be
reasonable as expenses to start up of operation requires a lot of money.
The assess value is also a factor in the payment of taxes.

b. for Expansion - TI'rc land area must have ample space for plant
Eacilities
expansion and provisions for parking facilities for custorners and
employees. Anticipation of growth and expansion in plant facilities should
be considered as additional site in the fufure may create a problern"

c. Power qnd Utilities - Availability of p6wer supply and the cost of electricity

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,e
W
 involveintheoperationaregreatfactorsin.theproductionofgoods.
in operation for its
continuour- pori", supply is rieeded to keep the p-la1t of
and the proPel disposal
target produ&on. watei supply is also ryeaea
wastemustbeputinplacetocomplywithenvironmentallaws.
be within the restrictions
d. Buitding and other tltitities - The building must
code of tn" *".i.ipality or city. 1'ne- itilities
like canteens and other
must be p"t ill place in compliance with the labor
"*ptoy"uJru.iua",
code.Sidewalksandguttersareirnportantcornponentinemployees, mandatory
;;f&;htl; i" rf,," ph# site. Fire safety and hazards signs are
requirements.

e;PlantsiteAccessibility_Theplantsitemust-beaccessibletopublicor
customers. It must be near
service or,,rfor, fo, it, employees and valued cost
time and reduce
highways or exPressway to pto'ia" :u:".T travel
product' Delay in transport
in the transporiof raw-mateirials and finish
systems ut"ldd"d cost that must be avoided'

STRENGTIIS/ WEAIGIES SEt OPPORTLINIITIET AND TIIREATS $w oT)

the plofiJability of
swoT ANALySIS is an enffepreneurial tool in determining
th* !;rir"* .p"rr,1".. Opportunities carries with
it some risk involved and this
are internal factors to the
weaknesses
shouid be look into carefully. The strengths and
and threats are extemal factors.
;;*pr;""ur while the opportunities
The entrepreneur must look at how strong he is
to combat the weaknesses on
with caution' He may need
his side and this needs strong determination tI succeed threats'Planning
ffi;;ffig;;; and advaiced thinking,to overcomg th3 Possible.
moving to his side of
and environmental ,.riytit is needed to"keep oqqortunilies
profitability. t rrr"rt rrur,iL.r,o.,"y and effort ti'to,iia
t"* the tide of profit to the side
tf tf'r. entreprener.rrd thi, needs careful study and analysis'
The product must be evaluated along the following
areas:

l.ProiluctStrengthintheMarketmusthallethefollowing:
a. Awailable Technology in Product Processing - Technolo5y is of
T important
scale determines
component ir, pio'drr"iog the product as the economies
the lower the price it can
the price index. rhe Ilroi" products is produced,
hand, improves product
be offered to the market. T'ectrnotogy, ott th" other
standards.
quality and customers want thoseliems with technical
b.ThesourceofRawMaterialsmustbeAbundantandatLowerPrice-The
factor in the production
constant supply of raw materials is an important
into good products
of the product. Ch";p raw materials that ui" pto""tted
would be able to pJn"ttute the market as iti price could be competitive'
Continuous prodlction will eliminate distribution
disruption hence'

maximum supply to the target market'

 c. SkilledWorkers Must be Auailable - Technology must have the component of
skilled workers that shall operate the machineries and other equipmeilts.
They may need training in machine operation as quality products alsc
come from skilled workers. Workers efficiency and productivity must be
looked into as they are lifeblood of any production line.
d. Cnpital lnoestment in Mnchinery and Operating Expendittres - A starting
venture may have little investment in terms of machinery and equipment
bui starting with small capitai should generate profitable operation. As the
enterprise expand its market base investment in operating capital should
expand to meet the growing demand of the customer.
e. ExTtertise and Technicnl Skills of the Management Team -- A good prociuct is the
rnaking of a well conceived idea of the management team. Improvernent's
in product quality is a continuing process and it rr,ust be the management
objective to get customers patronage. Customers seek better products ancl
the taste for quality changes over time.

2. Ch.aracteristics of Weak Products sttd Weak Managemewt:

a. Poctr Quality and High Price - The entrepreneur should not launch a" pool
product in the market as it will surely fail to advance in the sales and profit.
It is not rvise to invest in the production of poor products. The entrept eneLtl'
rnust see to it that product has undergone custcmer taste ancl acceprtance
before it gets into the production line.
b. Froduct Desigtr and Appeal - Product design should appeal to custor..ers
denrand. Poor design of the product is the rnaking of people w-itir n*
technical expertise in handiing customer wants in terr:rs of features"
Artistic designs are,,conceptualized and approved by the possible usel:.q.
Product appeal in terms of color and features are irnportant in6iredients for
customer patronage.
c. Productiott Cost * Production cost is the price determinants. Entrepreneur
camot make maximum profitability on products whose production cosi
cannot survive m.arket competition. Production cost rnay be attributeri to
high labor cost and the availability of cheap raw materials.
d. will make customers
Supply and Demsnd- Intermittent supply to the rnarket
shift to other products. The supply chain management must be put in piace
to make the products available to vaiued customers. The supnly cirain
management must be able to capture the widest market possible to sustain
product development.
e. Weak l)rodtlct Managernent* Weak managernent is created when people at
the top of the organization fail to sustain a vigorous effort for expansion
and growth when management sets on his initial laurels ancl ventured on
vices'and other extra activities that w-ill lose trris totai investment. Some
\people
who acquired money, became too complacent and forgot all about
expanding thereby competition gets them out of the market place.

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3. Sustclinable Ptoduct Opportunities in the Matket:
of. the
a. Product Demond - Product demand is the greatest opportunity
be sustained
entrepreneur. Demand is the essence of profii and this must
competiiion appeared in the market piace'
by the entrepreneur before wide
operation and
The absence of other products wili expand- production
of vertical
thereby generate opportunities to expand into other ventures
and horizontal exPansion.
product
b. Presence of Poor Quality in the Market -ThePresence of poor quality alternative
The
in the market plice is"an opportunity for the entrepreneur'
is on the si.1e of the entrepreneur to suPply the market
with quality product
and sustain patronage. The product muit be superior in quality and the
price must be ,easor-rible compared with that of the competitor.

c. Gozternment Policies and supporl - The government support to local

entrepreneur is an oppoitunity for greater expansion. The government
government
should support the local entrepreneur in terms of taxes and
incentives. Reguiating on the importation of foreign products where locai
"available
products are is one important govelnment program that will
iustain economic growth of the local enterprise'
d. Liberal Credit Terms anLl Interest Rates - Liberal credit terms
by banks
the local
and other government institutions will generate expansion for
serve as conduit of
entreprenerlrs. Banks and financing institutions
by suppliers of
business in their expansion progru*. Credit terms given
the growth
raw materials and oth"r p.odrrction inputs are opportunities for
of the business.

4. Trcats to Product Ptofitnbility and Market Expansion:

Entrnnce Competition - T]he entrance of many competitors in the.market

o.f
place wili definitely give problem to the entrepreneur. Competition
will
reduce proritrtritity u"r tn" price has to be competitive with those in the
market ptu.". When profit diops, expansion will be limited and innovation
will drain the opporiunity for gto*it"t. Advertising and promotion cost has
to be sustained in order for the product to get patronage'

b. The suppty of raw materials will be limited as other competitors will

be getting the same suppliers. As demand for raw materials become
comlpetitii,e in prices, production inputs go higher and this
will affect
prod,ct pricing. Increased production cost means changes in product
price.
-
The Emergence of Leftwing Labour l-lnions Many companies
close shops
c. they want more
with the Jdvent of libouiunions with leftist philosophy as
sfi-kes
wages and benefits that the company could not give' Company.
Most
and lockouts are deterrent to the expansion and company's growth'
entrepreneurs would try to avoid Unions if possible, as leftist
elements
 usually come into the picture that will affect the opportunities of business
growth and expansion.
d. T'he Fresence of Double Taxation - The government already imposed a 1ot of
taxes to the entrepreneur. Honest businessmen could not profit in their
operations as there are lots of taxes that the government would like to
collect. Still related are the unfavorable treatment given by the tax coilectors
to businessmen that they have to put in grease money for a little favor.
Taxes are coilected by the government and another tax by unofficial tax
collectols.

e. Feace and Order in the Area of Br.rsiness Operation - Peace and order are
cornPonents of business gror.t th. Criminality and killings would drive
away investors. Kiliing competitors by those riding in tandem syndrome
scares people to go into business. Hold up gangs and robbery syndicates
are not good to business growth.

Coupled with this problem is the revolutionary tax coilected by the

Ieftist elements. If you do not pay the revolutionary tax surely your business
will go into flames. These are some greater threats to the expansion of
business in the ccuntryside.

f . The Cost of Ponter Supply - Cost of production increases with the cost of
tltilities like current and water. The government private partnership il"r
the operation of power and water utilities has increased tire cost of
l)ower
by about 400 percent. This contributed to increased production c,-lii and
pose threat to our competitiveness in tlie y,zorld n'larket. Power and water
utilities should be regulated by the governrnent in order to sustain growth
in our industries.

The Entrepreneur should look deeper into the followirag areas:

7. TheManagementTeam.

Management must be able to set the direction of the enterprise with a clear
Mxsffol,l AND yrsro}/ as the guiding tool for its plans and programs..plans
and progralrls are tentative activities that will make a definite step towards the
accomplishments of targef objectives. Cbjectives set into motion the goais of
the enternrise to profitability.
'Ihe tecirnicai and illenllolver complements are important factors in ihe
sllccess of tlie business. Tl"rc entrel'rr.eneur cannot do the iask alone as he needs
people r,vith ihe saine cutloak and perseverance as he has, especially at the
early stage of the l:usiness. The1, rnust work hard, persistent and must focus
on the vision and rnission of the business.

Manpower complement may need some training and indoctrination of

companlz's operation. Motivated employees will perforrn better and they need
to be looked into by top $lanagement. They must know the management

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 planning.process to get their utmost
philosoplry. They must be involved in the
".".p"riir.i" in the undertaking the enterprise activities'
- The management must introduce new technology to rnake work easier
work place is a motivating factor for
for the urorking t"u*. Technology ir'rif," is
or beiter service' Product quality
the ernpioyees to produce more products
for quality as vital component in
improved ur-ra .rllo-ers will ah,'ays look
continuous Patronage'

2. The Ptoduction Ptocess'

Productspecificationsmustbemaintainedaccord.ingtoproducts|'andalds
quality is now the name. of the game
that are acceptable to customers. Froduct must be
aware oiproduct quality and they
in business. Customers are now.,n"ff-ryri.ul
properties mustbe attractive and
a,ole to get their;;;;/r;"r,f-,.
upp"ui to customers demand'
rnechanical or electro.ri. .o*po.renthirst

Thernanagementmustlookintocheapavailablerawmaterialsinthe
should not be sacrificed in terms
pr'duction g;;;. Good qu{ity.materiali
"f of quality products' Quality
of p*ce o, poor'qrurity-wriluff".i,i-tu production
anr.i pdce must be looked into carefully by the management'

Productionschedutrernustbemadetogetherwithprodtrctspecifications.
and time. Production
,vvc_irk
u.n"a.rr", **i be followed to save on energy
capacity*,,tu"-followedaccordinSitotargetproductionsothatdelayedin
shipment could be avoided'
output mustbe put in graph
rated daily production and rnonthly plant
.I.he

andchartsforeasyreference'Prod'uction-rejectsmustbe.il*'"lTT-1-"1"1
activities are suPervised
lnventory ,"po* i-r.rst be a'ailable and warehousing
,rccordinglY
hotels, beauty salon' barber shops or
For service industries like restaurants,
uu serve,l with dignity and sn-rile' Front
even lvateL stations, the customuru *.rr,
lineproductioncrewrnusthavethepers-onaiity'thatwiilattractcustomers. The
clean in" looks' and proper attire'
, X'hey must possess pleasing p*"o'-'uiiiy' be prompt
of clear-,liness and the service must
ptace must havJ uri u*Ui"ice
*rra'*ust foilow an aPProved procedure'
3. 7he lvlarketingProgram'
for the last 5 years as to the
The marketing program needs {emunaanalysis
majorusersof.theproduct..Anewproduct'wouldneedcustomerviewpoint
beforeitislaunchedintothemarket,Productsamplesmaybenecessaryat
ancl preferences could be considered
the initial stage so that custom"rri,rJ",
before mass Production'
Thedemographicprofileofthetargetcust,omerrnustbe.*"linto,account
The target market
product clepends olr', tn" target customer'
as the success of tt","
,"J tf t"ir needl and wants must be satisfied'
must be specified accordingly

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 Cgstomers r.vould like io haye a iot of ci"Loices yet when they like ihe prodr"rr:i
we turn thern into regular custorflers'

Product competitiveness is determined by quality and price. A clemand anci

supply analysis must be ccinductecl thr:ough rnarketing research. h4arketing
reJearch will cletennine ihe irue picturr.: of the market demand and tXre pradu;.:f
competitors. This has tc }:e iooked into carefully by the entleprel-xe1-{r a"s the
su..*uu of the product.lepencis greatlv on the rnarket size and its rlernand.
'Ihe char'neis
The growth in n"Larket ctremancl needs channels of distribution.
of distribution should be measurecl in terms of the capability o{ the distributors
to handie the product. It mi,rst reach the consumer at the tiine t}-u:y need it
and the price that is affordatie tc then-r. Various channel of clisiributicn
jn the
prevailing market condition shouid be studied carefully as it is iht: life-trlc*d *f
cllstomers' wants and neerls.

4. The Fiwsncial Managemewt.

Venturing into business neec{ed financial resources. Mone-,r ts tre::dt:ri lr-i

finance the activities cf business. Whatever capiiai is avaitrable iit:'l.cr;rli. "
the kind of business operaticn" Vtrany smail entrepreneurs stari n'ii,i; iirl,,:i'l
capital but they were able tt: make business empire as the',, i.'1.ti,1''' l'lriio.' l.'.'
invest ttrreir rncney in prrofitable opreration. Savings and !tisi: i1i.,."::'rilnerlts;li'i.)
cha racteri stics of srt cccssf u J burincss entreprenettr.

Ihen internal source of capitai r,r.ill come from the savings eil{i 'is}etrs uf ttro:
starting entrepreneur. Liquid assets in cash or in banks are ti"le u:,ua! l"tattirlq
point. Real prcperties and personai properties may be pr-rt irl as guar;rlltr:e fo:"
loans that may be used for operating expenses.

Banks are externatr sources of funds. Thev are wiltring to help L:usiruessiriert
with ciear vision and good business acurnen back up tiy good teasib.ility
stuclies. Bank loans must have reasonable interest rates that ii could be paici
at reasonable period until the coixpanv r,vould be able to operate cir its orn'n
funds. Real properties are usuaiiy accepted bv banks as loan gtlarantee.
Other sources cf funels are partnership an,J stock options" lNhile i'uncls
couid source frcxr oiher pecple, the entrepreneur must look into the controiling
managelnent of the business. Careftrl choice of partners or investors r:lrusi be
looked into as he may lose control of his projected venture with the interference:
o{ the other parhrers in the business. Some partnership disbanrtrs aftel a fsrv
years causing brisiness coltrapse.

THE IDEN TIt-*tCATtOnu' ()F FLSfNESS OPPORflLm(fY

The entrepreneur's desire to establish his business is a visible iciea yet lt niust
come into a test whether it is a viable business option. It needs a careiul anc.iysis of
opportunity evaluation. The entrepreneur lt ho fails to evaluate his nobie idea beca-r-lse
of his eagerness to ptrunge into the business world often discovers later that he has
more problems to solve and at times abandons the idea after spending his time and
money.

The following steps will help the prospective entreprelleur evaluate the idea before
going into busincss:
1. The Starting Point of Conceiaing the ldea af the Type of Business:

Conceiving a new product is a process of innovation and when this come

into a reality, the product must be different from an existing product.
New prodr,lct needs customer evaluation and this process neecls exposure
to the tar:get market as to its economic value. This new product must satisfy
customers'needs and wants. It needs market exposure and public acceptance
before it could take off the ground.

The entrepreneltr must find a new approach to win customer on his side if
the product or service is similar to what is existing in the community. The new
venture must be able to present a new alternative or ctrifferent approach for hirn
to take off.

He must know the strengths and weaknesses of his competitor and thereby
devise a new system of promotion and advertising such as product discounts,
cash discounts, raffles, and other package of prizes. Emphasis should also
focus on good customer service

2. The Technical Feasibility and Time Frame:

An idea is not only concentrated on one entrepreneur. The entrepreneur

might have conceived an idea that is also in the mind of other person. The cuse
of cellular phone js a concrete example. Many companies tried the venture but
the leader in the industry is still NOKIA. Others begin to follow and strong
competition emerged in the process but the leading brand has taken otf the
ground before others followed tailing behind.
The new product must have its technical feasibility and the time to launch
the product must be immediately done to take ahead before others take the
idea. The entrepreneur must analyze the market demand and how he will
be able to meet this demand on time. He must be able to determine the risk
inr,'olved in the nelv venture and the investments in terms of rnoney and time.

The new product needs testing as to its technical capability to satisfy

customers' needs and wants. Some customers prefer branded products, those
that are produced by big names in the industry: Filipino innovators ancl
inventors find it difficult to convince the local consurners that their product
is good or better than those imported, hence many are selling their idea to
foreign investors.
In the food industry the grow-ing fast food chain is crowded with growing
senior citizens who have money to buy yet they have not discovered their

?nrjlt)n4@rr4*/.,
need. for health foods with less cholesterol. A good restaurant or fast food
with fish and vegetables and some we.tlness program may do the trick- for
this demographic sector. This may work wonders in some developing urban
sectors ouiside Metro Manila as it works wonders in some known restaurant
in the metropolis