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If companies in an industry have significant profits and there are no barriers to entry, how do these characteristics fit in the context of Porter’s Five Forces?
The following is an excerpt that appeared in an article “Strategic Planning: Not Just for Big Business” published at www.smallbusinessnotes. com/planning/strategicplanning.html, sponsored by “Strategic Planning Made Easy”:
Strategic planning has become a concept that is commonly suggested as the “solution” to many business problems. Some days it appears that the chief product of many businesses is their strategic plan. Don’t misunderstand me, strategic plans are wonderful when used appropriately, but they do need to be a tool of a business, not a goal unto themselves. And, most definitely, they should not be a major consumer of valuable employer/employee time.
Many entrepreneurial ventures mistakenly believe that strategic planning is only for large businesses that can afford the time and personnel to develop a sound plan. However, if you are to compete in the marketplace against the “big guys,” you need to learn some of their game plans—and strategic planning is a major part of any successful, large business. That does not mean that your startup needs all the bells and whistles of the more complex plans. You can in a matter of hours sketch out a good working draft that will help keep you on course to becoming a solid competitor.
a. How does a “strategic plan” relate to a company’s objectives?
b. Why are strategic plans considered a tool and not a solution?