The essence of business strategy for SMEs is to define the actions of the business so as to give a better response to customer needs than the competitors offer. In deciding where to position the business within its competitive environment, a firm should take into account both structural factors affecting the dynamics of competition in a specific industry, and factors determining the competitive advantage of the business with respect to competitors in the same industry.

The result of this analysis is identification of market competitive factors, i.e. the factors that need to be met to survive and be successful in the business. Initiatives and decisions have then to be taken accordingly, and priorities established.




The business strategy output consists of:

▪ defining the key objectives on both existing and potential new businesses; and

▪ the actions to be taken to achieve these objectives and to meet the critical success factors.

The business strategy formulation provides key inputs to technology strategy formulation. This chapter of guidelines briefly describes how to formulate a business strategy and is structured in four sections:

Product-market analysis

Trend analysis

Identification of market competitive factors; and

❹ Strategic priorities and actions.

This analytical approach should be applied to each business line of the enterprise.

A business line is defined as a distinct product or service, sold to a uniform set of customers facing a well defined set of competitors, offering products or services that are similar to each other.