Strategic Management for Small and Growing Firms
As suggested by the title, this book will interest small and growing businesses. It defines small-business as "any firm with fewer than 500 employees and annual sales of approximately $20 million."
The authors start by putting some stakes the ground: What is strategic management? What are its components? What benefits can you derive from it? How does strategic management differ in small companies versus large ones? How should it differ?
In Strategic Management you’ll learn how to formulate, implement, and evaluate the ongoing performance of a strategy. You’ll also find some common strategic positions and objectives for small businesses.
The authors categorize small businesses as operating in one of three modes: initiation mode, take-off mode, and vigilance mode. Rather than being distinct and unrelated states, these three modes represent a natural progression through the small-business life-cycle, although there is some discussion as to just how natural and linear the progression is in real-life.
The initiation mode chapter examines the opportunities and threats faced by companies entering emerging, mature, declining, and global industries. It also looks at some of the strategic questions that you must address when operating in this mode, such as what traditional marketing refers to as the “4 Ps:” product, price, promotion, and place; as well as some of the non-marketing issues such as financing and business organization, management, and operations.
The next chapter, The Take-off Mode, addresses the strategy needs of firms that are growing and plan to, hopefully, grow big-time. It first answers the question, “is such a major growth push appropriate for the firm its current situation?” It then looks at strategies to achieve growth and strategies to plan, manage, finance, and nurture that growth.
The third and final mode discussed is one of vigilance. Companies operating in this mode have passed through the start-up and growth phases to reach a level of stability. The vigilance mode chapter discusses the structures and strategies that these companies must put in place to sustain profitability even during turbulent times.
The book suggests that, in some cases, vigilance mode may be permanent. For other companies, it may be just a temporary state during a time of instability or before moving onto something better.
The vigilance chapter also discusses what, for most small-business owners is unthinkable, an exit strategy for when things begin to go wrong and cannot be turned around, or when the owners decide, for whatever reason, that it’s time to move on.
The book’s style straddles the line between academic and casual. There are lots of references to other material, all properly credited and footnoted, and a number of charts and other exhibits. The seven chapters contain several real world anecdotes and short case studies to illustrate the issues.
If I have one complaint about this book – and it's not really a complaint – it is that, while the book's title is Strategic Management, many of the anecdotes stray into the area of tactics (or lack thereof) rather than strategies. However, since it's the execution of tactics that allows you to fulfill your strategies, this adds value to the book. Your goal, after all, is to make your business a success. If a particular activity helps to achieve that goal, it is irrelevant whether you label it strategy building or tactical execution.
The question is, should you by the book?
If you are looking for a step-by-step guide to developing and executing strategies specific to your business, this is not it. Then again, your business is unique. A book written for a broad audience must be somewhat generic. To get outside help with strategies designed specifically for your business you’ll need a consultant who will work with you one-on-one.
If, however, you are a small-business person looking for a book that will help you understand the components of effective small-business strategy and the issues you must address, and which raises red flags where necessary, then you'll find this book very helpful. Applying its lessons to your unique business is then up to you.