Strategy

The primary market of most small businesses is the public, 57 percent the general public and 14 percent a limited number of customers and/or clients from the public. Another 19 percent sell primarily to businesses and 4 percent primarily to governments and/or non-profits. The remainder have customer-bases too mixed to designate a single primary market.

Small businesses typically sell locally. Seventy-five (75) percent of small businesses have 90 percent of their customers located within a 100 mile radius.

Three of four small-business owners perceive themselves to be competing in competitive to highly competitive markets. Part of this perception may be the accompanying perception held by 29 percent of small employers that they are competing primarily in declining markets, not associated with population changes.

Thirty-six (36) percent intend to move into new geographic markets in the next five years, 46 percent into new product/service markets, and 25 percent into both.

Social media is playing a growing role in small business marketing. Thirty-two (32) percent claim to use FaceBook to promote their businesses, while 11 percent claim to use Twitter and 7 percent Groupon, Living Social, etc.

Overwhelmingly the most common generic business strategies employed by small-business owners are highest possible quality and better service.

Less common generic strategies include in order of use: lower overhead, more choices and selection, a superior location, missed or poorly served customers, unique marketing, lower prices, creation of new products/services/processes to sell or lease, new or previously unavailable goods/ services, and alliances, cooperation with another firm/firms.

The owners of younger and smaller businesses typically have the least well-defined strategies.

Small-business owners typically blend generic strategies to produce a unique strategy to fit their own circumstances. There are four blends: innovation, consisting of creation of new products/services/process for lease or sale, new or previously unavailable goods/services, and more choices and selection; a soft blend, consisting of service and quality; cost, consisting of low prices and low overhead; and alliances.

The innovation blend is associated with growth, both experienced and desired. The soft blend is associated with neither experienced nor desired growth. The other two blends have mixed ties to growth.

Small-business owners frequently change strategies. All but about one in four who were in the business three years ago have changed their strategies since the onset of the Great Recession. Seventeen (17) percent assert they changed theirs significantly in that time frame while another 11 percent changed theirs noticeably. While most of those changes could be attributed to the negative impact of the economic down-swing, 21 percent who changed theirs did so because they saw an opportunity.

Changing strategies substantially is not uncommon. Forty-one (41) percent have changed the strategy of the business they are now operating significantly or noticeably since they began.

Volume 12, Issue 3, 2012
ISSN 1534-8326

William J. Dennis, Jr.

• 1Would you describe your current principal customer base as:?
• 2Regardless of your current market-share, is the market for the goods and/or services you now sell growing rapidly, growing, stable, declining or declining rapidly?
• 2aIs growth or decline in the area’s population a major reason for that change in market size?
• 3Would you characterize the market in which you primarily operate as:?
• 4Is there a dominant firm in your market?
• 4aIs your firm that dominate firm?
• 5Do you intend to expand this business into new geographic markets or territories in the next five years?
• 6Do you intend to expand into new products or services in the next five years?
• 7Approximately what percent of your sales are in franchised goods or services? Is it closest to:?
• 8Approximately what percent of your sales are made over the Internet? Is it closest to:?
• 9Do you attempt to market your firm using Facebook?
• 10Do you attempt to market your firm using Twitter?
• 11Do you attempt to market your firm using organizations such as Groupon or Living Social?
• 12Do 90 percent of your customers lie within:?
• 13ALower Prices
• 13BMore choice and selection
• 13CMaximum use of technology
• 13DBetter service
• 13EMinimal overhead
• 13FAlliances or cooperation with another firm or firms
• 13GTarget missed or poorly serviced customers
• 13HHighest possible quality
• 13INew or previously unavailable goods or services
• 13JA superior location
• 13KUnique marketing
• 13LExpansion or growth
• 13MCreation of new products, services, or precesses to sell or lease
• 14In the last three years, have you changed your basic competitive strategy:?
• 14aWhat was the principal reason you changed your competitive strategy during that time?
• 14bHow satisfied are you with the change in competitive strategy: Would that be:?
• 15Since you began in this business, have you changed your basic competitive strategy:?