Development of smll nd medium sized enterprise Essay

Development of smll nd medium sized enterprise - Essay Example In the following pper I will discuss the importnce of the strtegy in frmes of SME nd emphsize tht the prctice nd concept of strtegy plys n importnt role for the enterprise of smll nd medium size.In orgniztion's strtegy within smll nd medium sized enterprise (SME) refers to its tctics nd mode of opertion in the mrketplce nd represents the pproch it intends to use to chieve its stted gols. The process of developing these gols typiclly strts with mrketing udit tht essentilly represents compiltion of industry, mrket, nd internl nlyses nd indictors. In some orgniztions these nlyses re rigorous nd time-consuming, requiring the time, energy, nd effort of n entire stff specificlly devoted to these efforts. On the other hnd, strtegy is lso sometimes formulted s result of n intuitive understnding of the orgniztion's bilities nd the environment in which it functions. In either cse, strtegy determines the ctivities necessry to chieve the orgniztion's desired level of success (Storey 2006).Strteg y within SME tkes t lest two forms: stted strtegy nd effective strtegy. Most lrge corportions undertke forml strtegic plnning efforts in which significnt mount of effort nd time is devoted to identifying specific nd relevnt strtegies. These efforts result in documents being distributed, ction items being issued, responsibility being ssigned nd, more often thn not, presenttion being mde by the strtegic plnning group to executive mngement. However, the growing consensus mong strtegic plnning professionls is tht there is often disprity between the stted strtegy nd the effective strtegy. The stted strtegy is wht is written in the orgniztion's plnning documents; the effective strtegy, on the other hnd, is the strtegy tht's demonstrted by the orgniztion's ctions. It is importnt to note tht the only truly importnt strtegy is the effective strtegy. The primry purpose of the stted strtegy is to influence the orgniztion's effective strtegy (Greene, Mole, 2006). The true test of how well the orgniztion's effective strtegy is ttuned to its trgeted customers is how well it performs in the mrketplce. This cn be mesured by performnce indictors such s customer loylty, sles, ernings, mrket shre, nd stock price. lthough Sers nd The Limited hve strtegic efforts focused on both cost reduction nd product inception-to-mrket, the emphsis of the qulity efforts for the fshion deprtment of Sers would be different thn it would be for The Limited. The Limited might plce specil emphsis on technology nd processes tht would id in its bility to get products to mrket very quickly. The fshion division of Sers might plce more emphsis on cost reduction becuse price plys more importnt role t Sers thn t The Limited. This simple exmple helps illustrte the importnce of deriving qulity efforts from orgniztionl strtegy. SME's criticl success fctors (CSFs) re determined by its strtegy. Criticl success fctors describe the things n orgniztion must do well to chieve its strtegic gols (Dft, Sormunen, Prks, 2005). CSFs re the mens by which the orgniztion fulfills its strtegy. Two similr orgniztions in the sme industry cn pproch the mrket using very different strtegies, resulting in the development of divergent criticl success fctors. For exmple, n entrepreneur who desires long-term success with one clothing store would hve different set of criticl success fctors thn n entrepreneur who desires long-term success through ntionwide frnchising. The criticl success fctor concept is ge-old. Gret leders throughout history chieved success becuse of their bility to focus on few key, criticl fctors