SME in India
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1) Unit 1
a) Family Business
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b) Strengths & Weaknesses
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c) Five stages of business growth
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2) Unit 2 - Planning
a) Strategic planning process
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b) Different strategies
Growth Strategy
A growth strategy entails introducing new products or adding new features to existing products.
Sometimes, a small company may be forced to modify or increase its product line to keep up with
competitors. Otherwise, customers may start using the new technology of a competitive company.
For example, cell phone companies are constantly adding new features or discovering new
technology. Cell phone companies that do not keep up with consumer demand will not stay in
business very long.
A small company may also adopt a growth strategy by finding a new market for its products.
Sometimes, companies find new markets for their products by accident. For example, a small
consumer soap manufacturer may discover through marketing research that industrial workers like
its products. Hence, in addition to selling soap in retail stores, the company could package the soap
in larger containers for factory and plant workers.
Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they have a competitive
advantage, such as superior quality or service. For example, a small manufacturer or air purifiers
may set themselves apart from competitors with their superior engineering design. Obviously,
companies use a product differentiation strategy to set themselves apart from key competitors.
However, a product differentiation strategy can also help a company build brand loyalty.
Price-Skimming Strategy
A price-skimming strategy involves charging high prices for a product, particularly during the
introductory phase. A small company will use a price-skimming strategy to quickly recover its
production and advertising costs. However, there must be something special about the product for
consumers to pay the exorbitant price. An example would be the introduction of a new technology.
A small company may be the first to introduce a new type of solar panel. Because the company is
the only one selling the product, customers that really want the solar panels may pay the higher
price. One disadvantage of a price-skimming is that it tends to attract competition relatively quickly.
Enterprising individuals may see the profits the company is reaping and produce their own products,
provided they have the technological know-how.
Acquisition Strategy
A small company with extra capital may use an acquisition strategy to gain a competitive
advantage. An acquisition strategy entails purchasing another company, or one or more of
its product lines. For example, a small grocery retailer on the east coast may purchase a
comparable grocery chain in the Midwest to expand its operations.
Related to Mission & Vision
• Who are we?
• What do we do?
• Why are we here?
• What kind of company are we?
• What kind of company do we want to become?
• What kind of company must we become?
Related to Strategy in General
• What is our objective? What are the ends we seek?
• What is our current strategy, implicit or explicit?
• What courses of action might lead to the ends we seek?
• What are the means at our disposal?
• How are our actions restrained and constrained by the means at our disposal?
• What risks are involved and which ones are serious enough that we should plan for them?
Related to Corporate Strategy
• What is the current strategy, implicit or explicit?
• What assumptions have to hold for the current strategy to be viable?
• What is happening in the larger, social, political, technical and financial environments?
• What are our growth, size, and profitability goals?
• In which markets will we compete?
• In which businesses?
• In which geographic areas?
Related to Competitive Strategy
• What is the current strategy, implicit or explicit?
• What assumptions have to hold for the current strategy to be viable?
• What is happening in the industry, with our competitors, and in general?
• What are our growth, size, and profitability goals?
• What products and services will we offer?
• To what customers or users?
• How will the selling/buying decisions be made?
• How will we distribute our products and services?
• What technologies will we employ?
• What capabilities and capacities will we require?
• Which ones are core?
• What will we make, what will we buy, and what will we acquire through alliance?
• What are our options?
• On what basis will we compete?
Pricing strategy
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Tactical planning process
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Golden Circle
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Balanced Scorecard
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Three box model
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Pricing Strategies
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