Question

Week 9 Assignment 3: Developing a Sustainable Small Business

Read the case study titled "Pre-launch decisions which influence innovation success" found in Chapter 7 of your textbook.

You will then write a four to five page paper in which the following items are addressed.

1. Discuss the necessity of short-term and long-term forecasting for developing the key elements of the business plan.
2. Evaluate the importance of developing formal and informal networks when building new business opportunities and expanding into new markets.
3. Discuss the importance of knowledge management in the digital age and identify two risk organizations must address to mitigate competitive pressures.
4. Consider the various components of a business plan and identify two components that you believe would be the most challenging for you to complete as an aspiring entrepreneur. Next, discuss what could be done to help you overcome this challenge using technology.
5. Use at least two external sources

Answer 1

Business owners develop plans to reach their overall goals, and they usually find it useful to separate planning into phases. This allows you to track immediate improvements while evaluating progress toward eventual goals and targets. The different time frames of the planning process place the focus on time-sensitive aspects of the company's structure and environment. You can differentiate planning based on the time frames of the inputs and expected outcomes.

Planning Characteristics

Many businesses develop strategic planning within a short-term, medium-term and long-term framework. Short-term usually involves processes that show results within a year. Companies aim medium-term plans at results that take several years to achieve. Long-term plans include the overall goals of the company set four or five years in the future and usually are based on reaching the medium-term targets. Planning in this way helps you complete short-term tasks while keeping longer-term goals in mind.

Short-Term Planning

Short-term planning looks at the characteristics of the company in the present and develops strategies for improving them. Examples are the skills of the employees and their attitudes. The condition of production equipment or product quality problems are also short-term concerns. To address these issues, you put in place short-term solutions to address problems. Employee training courses, equipment servicing and quality fixes are short-term solutions. These solutions set the stage for addressing problems more comprehensively in the longer term.

Medium-Term Planning

Medium-term planning applies more permanent solutions to short-term problems. If training courses for employees solved problems in the short term, companies schedule training programs for the medium term. If there are quality issues, the medium-term response is to revise and strengthen the company's quality control program. Where a short-term response to equipment failure is to repair the machine, a medium-term solution is to arrange for a service contract. Medium-term planning implements policies and procedures to ensure that short-term problems don't recur.

Long-Term Planning

In the long term, companies want to solve problems permanently and to reach their overall targets. Long-term planning reacts to the competitive situation of the company in its social, economic and political environment and develops strategies for adapting and influencing its position to achieve long-term goals. It examines major capital expenditures such as purchasing equipment and facilities, and implements policies and procedures that shape the company's profile to match top management's ideas. When short-term and medium-term planning is successful, long-term planning builds on those achievements to preserve accomplishments and ensure continued progress.