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Section II – Building the Business Plan: Beginning Considerations Chapter 3 Strategic Management and The Entrepreneur (PPT 3.1, 3.2) Part One: Learning Objectives Understand the importance of strategic management to a small business. Explain why and how a small business must create a competitive advantage in the market. Develop a strategic plan for a business using the nine steps in the strategic planning process. Discuss the characteristics of three basic strategies: low cost, differentiation, and focus, and know when to employ them. Understand the importance of controls such as the balanced scorecard in the planning process. Part Two: Lesson Plan I. Building a Competitive Advantage (PPT 3.3 thru 3.5) Developing a strategic plan allows a company to create a competitive advantage-- an aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market. No business can be everything to everyone. Creating a strategic plan prevents a small business from failing to differentiate itself from its competitors. Another avenue for a small business seeking a competitive advantage is customer intimacy, focusing on the goods and services that customer’s want and value. When it comes to developing a strategic plan, small companies have a variety of natural advantages over their larger competitors: fewer product lines, a better defined customer base, a specific geographical area, and closer customer contact. No business can be everything to everyone. The goal of developing a strategic plan is to create a competitive advantage for the small business-- the aggregation of factors that sets the small business apart from its competitors and gives it a unique position in the market. Strategic Management includes developing a game plan to guide a company as it strives to accomplish its vision, goals, and objectives and to keep it from straying off its course. Strategic Planning should include: Both a short- and long-term p