POLYTECHNIC UNIVERSITY OF THE PHILPPINES

SAN PEDRO CAMPUS

Aboitiz Equity Venture
Procter and Gamble, Ohio





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A Assignment in partial
fulfillment of the course
MANA 3103 (Business Policy and Strategy)


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Presented to

Prof. Minerva D. Ferranco


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By:

Mendoza, Catherine S.
Recososa, Daryl G.
BSA III-I




April 2014
Special Challenges faced by Small Business


Small Business as defined in PFRS for SMEs as
With total assets of between P3 million and P350 million or total liabilities of
between P3 million and P250 million;
That is not required to file financial statements under SRC Rule 68.1;

Entrepreneur often defined as a person who organizes and manages a business undertaking
and who assumes risk for the sake of a profit, who is also an ultimate strategist.

Use of Strategic Planning and Strategic Management

Strategic Planning is strongly related to small business financial performance. But still,
many of the small business still do not do the process. Some reasons for the apparent lack of
strategic planning practices in the small business are:

Not enough time - Day-to-day operating problems take up the time necessary for long-
term planning.
Unfamiliar with strategic planning - A small-business CEO may be unaware of strategic
planning or may view it as irrelevant to the small-business situation. Planning may be
viewed as a straitjacket that limits flexibility.
Lack of skills - Small-business managers often lack the skills necessary to begin strategic
planning and do not have or want to spend the money necessary to import trained
consultants.
Lack of trust and openness - Many small-business ownermanagers are very sensitive
regarding key information about the business and are thus unwilling to share strategic
planning with employees or outsiders

Usefulness of the Strategic Decision-Making Process
One way in which the strategic management model can be made action oriented is to
follow the strategic decision-making model. The eight steps presented in that model are just as
appropriate for small companies as they are for large corporations.

1. Develop the basic business ideaa product and/or service that has target customers and/or
markets
2. Scan and assess the external environment to locate factors in the societal and task
environments that pose opportunities and threats:
3. Scan and assess the internal factors relevant to the new business
4. Analyze the strategic factors in light of the current situation, using SWOT
5. Decide go or no go
6. Generate a business plan that specifies how the opportunity will be transformed into reality
7. Implement the business plan
8. Evaluate the implemented business plan through comparison of actual performance against
projected performance results

Some Issues faced by Small Business

A. Issues in Corporate Governance
Much simpler than large, established corporations
Once incorporated, the stockholders usually composed only the founding owners
and their immediate families
B. Issues in Environmental Scanning and Strategy Formulation
Less sophisticated than large corporation
Environmental scanning is usually made the top managers of the business
Strategy Formulation relies on the relationship between owners and managers
Sources of innovation
o The Unexpected
o The Incongruity
o Innovation based on Process Needs
o Changes in Industry or Market Structure
o Demographics
o Changes in Perception, Mood and Meaning
o New Knowledge
C. Issues in Strategy Implementation
Substages of Small Business Development
o Stage A: Existence
o Stage B: Survival
o Stage C: Success
o Stage D: Take off
o Stage E: Resources Maturity
Transfer of Power and Wealth in Family Business
o Owner-Mnaged Business
o Training and Development of New Generation
o Partnership between Generation
o Transfer of Power
D. Issues in Evaluation and Control
Line between debt and equity blurred
Lifestyle part of financial statements
Standard financial formulas dont apply
Personal preference
Banks combine personal and business wealth