A study entitled “Manufacturing and business strategy practices of small and medium scale industries in Malaysia” found that there is a lack of skills and knowledge in organising effective planning in their businesses. Most of the SMEs used financial statement as their major performance indicator. Planning is usually short-sighted with emphasis on performance compared to budgets. This lack of planning misses the point of driving business growth and performance. As a result, SME and SMIs face tremendous challenges in managing the growth of their businesses.
The most frequently focused competitive strategy is quality based. If SMEs go through an informed planning process, it may come to a more creative strategic focus over and above quality as a competitive strategy.
A formalised business planning process is necessary in order to identify the areas needed for analysis, starting from the overall vision and mission of the company, and how the mission drives business objectives. A long term strategic view of where the business is growing is also essential. Once the necessary research is conducted on the market the company is operating in, formalised strategies and plans guide the organised implementation of the plan.
Accountability and responsibility to deliver the plan becomes clearer. The managers involved in the analysis and planning are also recognised and rewarded for the results. A solid business plan sets the strategic direction of the company, and organise the resources; the work force, machinery, tools and financial resources to deliver the desired profits of the company.
Ref: Joint study by researchers from SIRIM and University Malaya, published in the Malaysian Management Review Vol 35 No2, Dec 2000
Two day workshop on Strategic Business Planning
