Mgqn 10.

Answer:

MG-ASSIGNMENT-QN 13
ANSWERS:
Smes are defined as micro, small, and medium-size enterprises in non-farm
activities including manufacturing industry, mining, commerce and services. In
Tanzanian government defines smes according to sectors, employment size, and
capital investment in machinery.
IMPORTANCE APPLICATION OF STRATEGIC MANAGEMENT TO SMES
It is necessary for any profit oriented organization set its objectives and goals in
order to assess and control its performance at the end of the day. In most
developing countries SME enterprises faces number of challenges towards growth
and sustainable development. Such challenges including:

Inability to compete against larger firms in terms of R&D expenditure and

innovation (product, process, and organization)
Increased market competition and concentration from large multinational
enterprises
Lack of resources (finance, technology, skilled labor, market access, and
market information).
Higher transaction costs relative to large enterprises.
Among others

SME enterprises in Tanzania needs to align its its vision and mission it is necessary
to apply strategic management principles. Strategic management involves the
evaluation of business objectives and goals in an effort to facilitate efficiency and
effectiveness in an organization. In strategic management, an organizations longterm and short-term goals are designed. This is not a one-time thing since the
strategies that an organization apply have to be revised constantly. These revisions
must be done with the understanding that the organization is not an island and it has
to conform to the external environment depending on the field they are working in
Strategic management is important and necessary in any given organization
because it defines the scope of the activities they can be involved in. It is costly and
time wasting to simply come up with activities blindly and hope that they will achieve
the greater aim. All successful activities are normally planned and the expected
outcome is usually already estimated through research.
Three major questions that may guide Tanzanias SME enterprises managers
when they are carrying out strategic management including:

What do we do?
This answer to this question IDENTIFIES the organization in terms of its GOALS
and OBJECTIVES. These factors need to be well defined and RECORDED DOWN.
This is because whoever else comes to work for a given organization will find a
structured plan to follow. This helps employees not losing direction in executing their
duties, by referring to this.

How do we do it?
Every organization has their own SIGNATURE STYLE OF DOING THINGS. For
example every business entity has a style that every employee had to adopt. This is
your signature mark that separates you from the rest of the people who are in a
similar line of business.

How do we win?
Here activities that have been done in the past by the organization verses others in
the field are considered .This is TO LEARN WHAT OTHERS ARE DOING RIGHT
TO OVERTAKE YOU and try to FIND STRATEGIES TO MAINTAIN YOUR STATUS.
It is the process of monitoring organization mistakes and brainstorm on possible
corrective measures to apply.
The 7 Benefits of Strategic Planning
If you dont know where you are going, then any road will take you there.
For some, Strategy and Strategic Planning is something that is done once a year
which results in a report. Others think it is market position, operational effectiveness
or an idea or business model.
Strategy is choosing to perform different activities that can be preserved and that will
provide a sustainable competitive advantage. It is a mental exercise. It is a way of
thinking about the world and approaching business. Strategic planning is a process
to produce innovative and creative ideas which serve as the core framework for the
company and designing its future.
Strategic planning can have an immediate influence on your company and
organization.
1. Make your future happen dont let it happen to you
It is the difference between being proactive or reactive. Be on the defensive
or the offensive. Be a victim of circumstances or be victorious in the fight.

Not every situation can be foreseen but you can make decisions and react to
changing market conditions with the end in mind.
2. Establish direction
clearly defines the purpose of the organization and establishes realistic goals
and objectives consistent with the mission which can be clearly
communicated to constituents. Provides a base from which progress can be
measured, employees compensated and boundaries established for effective
decision making.

3. Make wise business decisions

How do you distinguish between a good idea and a great idea? Without a
clear vision of what you want to achieve, and mission or purpose for doing it,
everything seems like a good idea. What project do you invest in? How
should you and your staff invest your time? Having clarity about what you
want to do, who you need and how to get there will focus limited financial and
people resources.
4. Create longevity of the business
The world market and industries are changing faster than ever and those
companies who do not have a solid foundation and have relied on luck or
opportunity most likely will not be around for the future. Data reflects that one
out of every three companies at the top of their industry will not make be there
in five years. Focus is powerful. Scientists focus light so intently that it
becomes a laser which is used for surgery or able to cut through glass and
metal.
5. Increased profitability and market share
Focused planning and strategic thinking will uncover the customer segments,
market conditions, and product and service offerings that are in the best
interest of your firm. An intentful and targeted approach to markets and
opportunities which guide your sales and marketing efforts, distribution and
other business decisions which ultimately mean more profit to the bottom line
and a stronger market position.
6. Unique differentiation: avoid competitive convergence
Companies have gotten so used to looking at their competitors and their best
practices and then trying to duplicate them that it becomes harder to tell the
companies apart. They all start to look the same with less distinction in
unique value. Strategy means having a unique differentiation that sets you
apart from your competitors.

7. Increased job satisfaction meaningful and full of purpose

Consistently one of the top reason for leaving a firm is the lack of job
satisfaction. People need to have a motivation to come to work and feel like
part of the team. It has been proven that employees are the greatest source
for innovative ideas. If your employees were in essence bricklayers, would
they say that they are building a wall with each brick they lay each day or
building a cathedral? The purpose and meaning of work gives a new focus
and reason to show up each day.

The major advantage of SMES.

Diversifying of economy activities.

Creates Large Scale, Low Cost Employment Opportunities
Satisfies the demand of local customers.
Uses Locally Available Inputs
Mobilizes Small & Scattered Savings
Develops Entrepreneurship