Strategic Management
Strategy SME entrepreneur
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Strategic management
Strategic management is to determine the fundamental long-term goals and objectives of the company and to establish actions with allocation of resources needed for achieving these goals.
Insufficient focus on long-term goals
De lange termijn
Strategy is a task of management (entrepreneur), but usually in practice this task is hardly given any attention.
The strategic planning is not intrigued in the management process with the result that the long-term goals are not known in the organization. As a result, no actions are planned and resources allocated to meed customer expectations and company objedtives. This is also immediately cut off the road to gain a competitive advantage and thus become a successful SME entrepreneur. There are many reasons to raise why strategic management is not getting the attention it deserves
Strategic management is not given adequate attention because:
- The responsibility for strategy rests with the senior staff.
- Planning is not based on relevant management information.
- The workload of the management (entrepreneur) is too large.
- There is an abundance of data, but not enough relevant information to make the right decisions.
- The organization is too much focused on a single aspect of the whole, usually the product or service activities.
- There is no integrated approach within the organization.
- Competition receives insufficient attention, information on competition is inadequate or missing entirely.
Core activity of the company
The key to success, winning and keeping customers for each entrepreneur!
Winning and Keeping Customers
The core activity of the company is not, as often thought, the product or service that the company provides, but keeping and winning customers.
Keeping and winning customers is the key success factor for any company.
Business processes and added value to the customer
A company’s success is highly dependent on how the business processes are organized. Are business processes insufficiently focused on delivering value to the customer than this has negative impact for customers base. The organization is unable to retain customers, and this means almost directly loss of sales and margin. Because to compensate for lost customers new customers must be attracted, the acquisition cost is much higher than the cost of keeping your customers happy.
Winning new customers will become increasingly more difficult. First, a lot of time and energy is wasted on repairing mistakes. Besides the additional costs incurred to fix these faults, you lose too much valuable time which you can’t spend on meeting customers.
Negative publicity catastrophic
Secondly, a customer who is disappointed in the companies performance will tell family and acquaintances about it and so the negative news is spread. In this time negative publicity is catastrophic. Through the internet people (customers) have a huge circle of friends gathered around them and guess what happens when a disappointed customer sending negative messages about your company on the internet.
Most entrepreneurs don’t think about the loss of a customer
Each customer is obviously important, but if an unsatisfied customer, a complainant, a rotten apple is among them, you’re better off without such a customer. The cost for that one customer to satisfy is often too high, and comes at the expense of other customers.
That was the analysis, but Is that right?
In the article” The shadow of one customer “ is mathematically demonstrated that it’s much more expensive to acquire a new customer than keeping a complaining customer satisfied.
Management System
Guidelines and procedures embedding
A management system takes over the task of strategic management.
To prevent strategic management does not get the attention it deserves. It is much more productive to implement a management system in which clear guidelines and procedures are set. Making the strategic management become embedded in the company.
Top priority, winning and keeping customers
As said a management system is necessary to embed strategic management in the enterprise.
This ensures that the entire organization continuously have their attention towards the customer and his surroundings. With every action, within the organisation the question is asked; does the organization meet the expectations of the customer? The strategy and customer focus is thereby embedded in the organization.
Franchise Formula
Develop the management system is the best compare with a franchise formula.
In a franchise formula are all business processes aimed at achieving marketing results. Winning and keeping customers is the objective of the entire organization in the franchise formula! The entire organization ensures that a constant quality to the customer under all circumstances and that there is supplied continuously being sought opportunities to improve the quality level direction customer.
Management system must meet:
- The system must be effective in winning and keeping customers.
- All business processes are approached from the needs and expectations of the customer and are documented in manuals.
- All employees are through the manuals instructed when and how to performing their tasks.
- The system prevents problems with the unpredictability of employees.
- The system transforms the problem of employees into opportunity by clear instructions on how to act.
- The franchise system will be the standard that is set to in order to generated the company objectives.
Internal and external customers
The management system aims to implement the management strategy throughout the organization.
The advantage of the management system is that the focus is on the entire organization, continuously focused on keeping and gaining customers.
Everyone in the organization has customers, there are “external” and “internal” customers. The focus is on the “external” customer, but that does not mean that the “internal” customer is less important! Departments and their employees, “internal” customers are mutually dependent from each other to meet the expectations of the “external” customer. For example, if there are problems with internal communication or there are problems in the transfer of activity between colleagues or departments than this will have a negative impact on the external customer. Internal problems mean that the customer trust in the company terminates.
Business Processes
Business processes tuned on customer expectations
All business processes are approached from the needs and expectations of the customer.
The first step is the mapping of all business processes. Then all processes are examined whether they meet the expectations and wishes of the customer. Only when a work-flow with a resounding “yes complies” can be answered, it will have the stamp approved and shall be documented in the form of an instruction or manual.
Above shows schematically how the business processes be tailored to the customer expectations. The testing of the business process continues until the customer expectations are met, then the business and work instructions will be documented. The employees are instituted to act according to the work instructions.
Measurement is knowledge
Measuring the business processes and improve customer focus
Whether the business processes comply and stay compliant with the wishes and expectations of the customer will be established by regular measurements, using a check-lists.
Measured deviations are documented and analysed by small project teams. The project teams make suggestions for improvements to the management. The management sees to it that the then to carry out improvement actions actually occur. The internal business processes can be automated as much as possible. However, these processes must still be checked for errors using a check-list. By this procedure, your organization is able gain customers and keep them.
Guidelines establish business processes:
- All work processes that directly or indirectly have to deal with the customer have to be documented and provided with work instructions and a check-list.
- Also, all internal processes or all processes between departments and employees are to be documented and provided with work instructions and check-list.
- All work processes are documented in manuals on logical and organized manner combined and serve as instruction for employees.
- The documented work instructions and check-list forms the basis for an active improvement policy, which the employee takes a central place.
- Processes that do not affect direct customer contact will be as far as possible automated.
