Strategic planning in an SME

The company to be analyzed is Frutos Procesados ​​Los Andes CA, which belongs to the sector of Production of nuts, through the Dehydration Method.

Chapter I. Organizational purposes and objectives

strategic-planning-in-an-SME

Vision: To be a leading company in the world fruit processing and preservation market.

Mission: Process fruits in order to preserve them through solar dehydration and / or freezing methods, with Quality processes. Relying on human resources, infrastructure, technology, location, variety and competitive prices.

Values:

• Loyalty to customers and suppliers Hygiene, conservation and protection of the environment Respect for people and work Loyalty to customers and suppliers Hygiene, conservation and protection of the environment Respect for people and work.

Policies:

• Action, action and more action. Accept mistakes, without blaming anyone. Seek added value. Zero Problems, good solutions. Cost awareness. From complex to simple. Put it on record, write it down. What is agreed is executed Modeling No to rework No Say it do it Respect, respect and more respect

Strategic Objectives:

General objectives:

• Contribute to maximize the Value Added to the Shareholder. Standardization of the processes and continuous improvement of our products. Budget any work in order to reduce the misuse of resources and budget. Have professionally qualified, motivated, satisfied and integrated staff at Fruproanca. Achieve integration with customers to improve the Sale and Distribution of our products.

Specific objectives:

• Maximize Added Value Promote and Maintain Profitable Businesses with Third Parties Guarantee Volume on Time and in Specification Integrate the company harmoniously into the environment Optimize Raw material Reserves Rationally and profitably buy fruits Optimize the use of assets Preserve the environment Implement an adequate recognition system Adopt technologies aligned to the business Strengthen culture and values ​​utilization Information and communication

Analysis of Organizational Purposes and Objectives

These organizational elements encompass strategic thinking about Fruproanca, clearly defining where the company wants to go, how it will achieve it, based on the values ​​and policies oriented to its activities.

The Organizational Mission meets the basic requirement of identifying the company with its reason for being, within the competitive environment of the production of nuts through dehydration and / or freezing methods.

Fruproanca's values ​​are raised on the basis of an ethical - social framework within which the company carries out all its actions, these are part of the organizational culture, guiding the behavior of individuals within the organization and in social relations.

The vision represents the image of the company to be achieved in the future, defines the achievement of the organization, reflects the level of excellence to which it aspires and the degree of internationalization, that is, it includes the level of processes and capabilities.

The policies are aimed at regulating the behavior of those who make up the organization, on the values ​​to execute the actions.

The formulation of the objectives sets the levels of achievement, which can be verifiable and achievable in a given time, as well as being established by significant events for organizational success.

The organization is proposed to create its quality policies, in order to clearly identify what the organization's efforts will be aimed at customer satisfaction and through what means it will be achieved. These policies will allow the company to prepare for future actions and begin to carry out the necessary procedures to obtain important certifications such as ISO Standards, this will provide a degree of reliability before its customers, suppliers, national and international market, in this way the company can be more competitive in the field of dehydration. Considering the nature of the operations carried out by the company and from which the handling of food and its production is derived,It is then necessary to establish some norms that regulate the organizational functioning and adapt the operations towards an adequate Environmental Management.Chapter II. Analysis

2.1 SWOT analysis

The company under study has been developing in the State of Mérida, since 1999, the production of nuts applying an innovative technique in the agri-food sector.

Frutos Procesados ​​Los Andes (Fruproanca), was founded in the year 1999, its activity consists of the production and commercialization of Dried Fruits, it is located in the El Llano Sector, San Juan de Lagunillas- Mérida State.

The technique of dehydration of food is one of the oldest methods of conservation and takes place by exposure to a dry environment, or artificial using special dryers for this purpose.

2.1.1. Opportunities:

Growing Market: By establishing this plant for the processing of agricultural items produced in the Andean Region, it emerges as an alternative to expand production capacity, increase employment productivity in agriculture and increase competitiveness among agricultural companies, promoting business potential, with greater added value. Some of the reasons found to promote the dehydrated fruit industry include:

1. Promote agricultural production in the area of ​​Bailadores, Mesa Bolívar, Tovar, Santa Cruz de Mora and other adjacencies Promote exports of dehydrated products Diversify the production of dehydrated foods Guarantee fair prices to producers, in order to avoid losses caused by excesses of production Create the production of organic compost in order to take advantage of the waste derived from the production process and preserve the environment.

Geographic Expansion:

1. Export products internationally, in order to take advantage of the changing food culture based on the consumption of food products with high nutritional value, leaving aside products that contain artificial colors or sweeteners Establish relationships with commercialization and distribution companies of consumer products natural, mass consumption, and dried fruits that are involved in the dehydrated fruit business.

2.1.2. Threats:

1. Volatility of the country's Macro-economic variables Political uncertainty Variability in General Costs (both fixed and variable) Changes in the marketing conditions of suppliers Appearance of new competitors offering similar products

2.2. Surrounding analysis

2.2.1. General environment

It is necessary to analyze the Fruproanca environment in order to determine those elements that have or may have an impact on the company.

It is necessary to consider that the agricultural items produced in the Andes region of Venezuela, work on an adequate production and marketing planning.

Demographic Segment Location:

Processed Fruits Los Andes (Fruproanca), is located in the El Llano Sector, San Juan de Lagunillas- Mérida State. Sucre Municipality.

The location of the company facilitates the access of input suppliers.

This area is projected as an area of ​​business expansion for the city of Mérida because the city center is collapsed, which benefits the company because it will allow commercial relations with other organizations.

In addition to the aforementioned, it has a highly favorable climate for the dehydration of fruits.

Technology Segment

That other competitors have technology such as air diffusion dehydrators that allow a continuous and qualitative homogeneous production of the products. In addition to storage without refrigeration for long periods of time and without the use of preservatives.

Economic Segment

The economic policies applied by the Venezuelan State can directly or indirectly influence Fruproanca in aspects such as:

1. Currency devaluation Exchange control Tariff barriers International reserves Non-traditional exports Unemployment rate Decrease in GDP

Currency devaluation, exchange control, tariff barriers, and international reserves make it difficult to import inputs.

The increase in the unemployment rate due to the decrease in GDP that occurred in recent years, provides a decrease in purchasing power and potential customers.

The export of non-traditional products is affected by exchange control, which delays the dynamization of agricultural and agro-industrial production, ceasing to favor companies of this type in relation to exports to countries that consume these products on a large scale. exotic, to countries like: the United States and Europe.

Political Segment - Legal

The political-legal uncertainty of the country generates a decrease in investments, causing a negative impact on the company, generating problems with the export of the product.

Socio - Cultural Segment

The culture of quality - product - consumption, has gradually generated new consumption patterns towards products with some degree of elaboration and selection that allow them to obtain quality assurance, that is why at present it is very important to develop companies so that they incorporate quality controls within its processes from field production to final benefit, and thus satisfy the demands of the end consumer. The plant integrates society with the company by using labor mainly from the area and guaranteeing the producers the placement of their crops.

Global Segment

It includes the markets or niche markets for Dried Fruits, among which:

1. In Venezuela: Dehydrated fruits have managed to position themselves within the snack consumer market, with an emphasis on the young population, competing with cookies and sweets aggressively, so far at the national level there are no competitors, since similar products They have a fairly handmade production, distribution and presentation.At international level:
   • The United States represents the fifth largest fruit consuming country in the world. Imports represent approximately 2% of US consumption of dehydrated fruits. The United States is the world's producer of dehydrated fruits, prunes being the most representative product with growth in the Production Competition for products at the international level can be classified as follows:
     1. For dehydrated tamarind: Mexico, India, Dominican Republic, Malaysia, Bulgaria and Pakistan For dehydrated papayas: Thailand, Philippines, Costa Rica, Honduras For dehydrated apples: Argentina, Chile, Germany, China, Italy and Turkey.

2.2.2. Competitive environment:

To carry out this global analysis, the Porter model will be used, which is based on five competitive forces that permanently act against the profitability of the dehydrated fruit production sector.

It is essential to know the elements that will determine the corporate strategy: customers, competitors, threat of substitute products and suppliers.

The dehydrated fruit sector in Venezuela has a low rivalry due to environmental, technological and economic conditions, mainly which protects the organization from the entry of new competitive competitors, however, this is not enough to guarantee that its high profitability is maintained., because there are other forces. One related to the sector and the other to customers. The intelligence lies in the fact that Fruproanca possesses great negotiating power and sustaining conditions related to the price, quality, form of payment, request and delivery time. Dried fruits can be considered as complementary products for breakfast in a cereal, yogurt, accompanying fresh fruits, to make recipes for kitchens such as sweets, cakes, pancakes, mixtelas,and it has substitute products if it is considered as a snack, these would be: sweet gummies, Miramar, guava sandwiches, milk, bananas, and masmelos.

"Knowledge of all these aspects and the factors that determine it will allow the company to find a position in the industry, so that it can compete successfully and thus determine the opportunities and threats that are presented to it, and the company can adapt better fit your industry environment and formulate a successful strategy. "

2.2.3. Strategic Groups:

In this complex industry sector "Nuts", there are considerable differences with the companies that make up it due to the current strategic groups. These strategic groups bring benefits if they are grouped together to provide a better quality of the product to consumers through their formation in previously defined geographical areas. In order to lower costs based on sharing the business structure of the same company and its location and achieve competitive advantages.

This analysis is useful as a refinement of a study of the industry in question, when Fruproanca faces a competitive position in a complex industry, the conformation of strategic groups gives the guideline to establish common strategies to supply the market.

The strategic group is considered under the following conditions:

• Differentiation leadership dimensions Geographic area

The strategic groups are:

1. Ocean Spray - CrainsBorges SASenecaHomePrunitaIn Venezuela Frito Lay and large National Distributors

All these companies are dedicated to the dehydration of fruits and other products, considering aspects such as:

• Vocation and commitment to quality. Fulfillment of an integrated service, exports in bulk or special containers requested by the client. Concern to modernize and technify production lines. Condition of fruit producers. Product Line: "DRY DURAZNOS". For export, it was considered: -. Strict controls in the selection of raw material.-. Arrangement of systems that allow full monitoring of the finished product. -. Strict quality control in each of the stages of the process.-. Packing each order in a timely manner to guarantee the greatest freshness of the products. Adaptation to the individual preferences of each client and specific market Quality in design: innovation, originality and correspondence with consumer taste Quality in production Quality in service:punctual supply of product and care of the point of sale. Distribution Channels, there must be distribution channels that guarantee the placement of the product at the points of sale.

Chapter III. Internal analysis of the company

3.1. SWOT Analysis

This analysis allows considering the possibilities that Fruproanca can face with guarantees. The question that must be answered is what can the company do? To indicate with certainty the actions to be taken, the clients, suppliers, production process, technology and workers will be considered.

There is a business statement that will contribute to meeting the needs of both the company and the client, which is that " It is not enough to be good, you can always be better."

3.1.1. Strengths:

• Location, because it is a dry climate, which is advantageous for the dehydration process of the fruits, it also allows farmers in the surrounding areas to place the inputs directly to the plant Presence of Know - how (the company is constantly under investigation and development of ideas) Dehydration technology results in products that can be stored without being refrigerated for long periods of time and without the use of preservatives.Personal in the production area with solid knowledge in the production process.Target del clearly defined product, which is advantageous because current competitors present the product in an artisanal way, weakening its possibility of placing it on the market. Organizational culture based on quality - product - consumption Export certificate.Personnel health certificates, permits and sanitary registration Proper distribution of the plant Presence of an external accounting consultant Established prices with cost coverage.

3.1.2. Weaknesses:

• High production costs Little knowledge of this type of product in the market Insufficient personnel in the production area Limits to Internet access Absence of international certifications There is no defined marketing strategy.

3.2. Value chain:

The concept of the value chain will contribute new decision visions to Fruproanca's strategic analysis. First, the sector to which the company belongs will be understood, which will be called the sector's value chain; second series of activities that add value to the product that the company generates and which will be consumed by the consumer; Finally, the companies are analyzed from the point of view of product diversification, in this sense there will be as many value chains as there are business numbers present.

One of the most important contributions of the Porter scheme is the division of the company's activities into two groups, the primary activities and the support ones, as well as highlighting the importance of the margin as a translation of an effective creation of value, as the result of the difference between the value created and the cost that has been assumed to the company in the different activities.

The strategy; They are the set of actions that the company must undertake to achieve a competitive advantage, they must be framed by differentiation, low costs and specialization.

Fruproanca seeks to minimize its costs through the relationships it establishes with its material suppliers, where quality and precision are negotiated as a means of transaction in order to create a win-win relationship. It differs from other similar products because it has a defined card, the products are totally natural, without colorants, artificial flavors or preservatives, it also has the privilege of having excellent suppliers of fruits whose products are totally natural.

Specialization is based on the production of currently dehydrated fruits: strawberry, mango, banana, peach, pineapple, assorted, frutissima (pulp of various fruits that are subjected to the dehydration process), papaya, soursop and blackberry.

The company under study has analyzed the strategies that best suit the production and sale of the product, from this reasoning it was observed that currently the company requires outsourcing, that is, external provision for the distribution and commercialization of the product, which is why which began the search for distributors and companies organized through advertisements in the national press, once the data is obtained, a database is created and the selection of those with whom the company will strengthen commercial relations begins.

For the marketing and advertising part of the organization, it will also entrust the activities of these areas to specialist companies that can be 100% reliable, recognized and responsible.

The advantage that is created with these strategies and outsourcing is that the maximization of the value of the product and the company is always sought, minimizing costs, efficiently fulfilling most of the activities and relating the areas of the company, activities, suppliers and customers.

3.3. Company resources

3.3.1. Tangible Resources:

Year 2003

1. Solvency:

   Current Assets = 636,128.99 = 1.5 times

Current Liabilities 103,456,918.61

Year 2002 Current Assets = 21,441,534.53 = 0.12 times

Current Liabilities 10,602,386.27

1. Circulating Active Acid Test - Inventory

Current Liabilities

Year 2003 158,636,128.99 - 8,681,028.14 = 1.4 times

103,456,918.61

Year 2002 21,441,534.53 - 19,911,178.71 = 0.14 Times

	10,602,386.27
4. Inventory Rotation	Sales cost

Inventory

Year 2003 2,970,590.86 = 0.34 times

8,681,028.14

Year 2002 1,677,663.35 = 0.084 times

19,911,178.71

1. Debt Ratio Total Debt x 100

Total active

Year 2003 103,456,918.61x 100 = 30%

346,882,884.09

Year 2002 10,602,386.27x 100 = 5.3%

199,108,064.46

Taking into account that Fruproanca was created in 1999, it had little economic activity until 2.003, finding that in the month of December of the year 2.003, it obtained a loan to expand the plant, increase capital assets and capacity for production. It is currently in a strategic alliance, business growth and application of marketing and sales strategies to achieve greater market shares, the following analysis and projection of the financial statements is made (See Annex 1):

In 2002 we observed a debt ratio of 5.3%, which means that of the total assets reflected in the Balance Sheet, 5.3% is committed to cover the company's obligations.

We see that in 2003 the debt percentage increases to 30%, because for the month of December the company receives a loan from FONCREI, which will be used to increase working capital, production capacity and expansion of the plant. This means that 70% of its total assets are not committed to business obligations.

Regarding the profitability of the company, it could not be calculated since the company presented losses for the years 2002 and 2003. The reasons are justified in the fact that the organization is in full birth and growth, In other words, investments have not yet been recovered, only efforts are made to establish solid operations, research, marketing, production and sales efforts.

In relation to the acid test determined by the analysis of financial statements, it shows as results (2002 = 0.14 and 2003 = 1.4), the company for the year 2002 does not have enough cash to pay its liabilities, this is a reflection of that once inventory is subtracted, there is less current assets for each current liability. For the year 2003, the company acquires a greater capacity to meet its obligations, that is, for each bolivar generated, the company can cover 0.4 of a short-term liability.

Regarding solvency, it indicates that Fruproanca has adequately invested the excess liquidity, which for 2002 was 0.12 and for 2003 it was 1.5. From this it follows that for the year 2.002, the company has 0.12 bolivars of assets for each bolivar of liabilities, for the year 2.003 for each bolivar of current liabilities it has 1.5 of current assets.

3.3.1.1. Projected Financial Statements: (See Annex 2)

Premises used for the projection of the Financial Statements:

1. Sales will be increased by 900% (Year 2.004), 1000% (Year 2.005) and 1200% (Year 2.006), due to the percentage increase that is observed from one month to another and the growth process that is observed in the company. (See Annex 3) Sales costs will be increased by 20% (Year 200.4), 27% (Year 2.005) and 33% (Year 2.006), these estimates are made with respect to projections of inflationary rates (based on the IPC) General expenses increase by 30% (Year 2.004), 32% (Year 2.005) and 35% (Year 2.006), this estimate is made considering the bonds, salary increases and presidential decrees. will be projected with an annual increase of 5%.

Year 2004

Net Profit * 100 = 73,693,400.69 * 100 = 40.54%

Profitability = Net Sales 181,801,702.10

Year 2005

Net Profit * 100 = 89,854,155.35 * 100 = 44.93%

Profitability = Net Sales 199,981,872.00

Year 2006

Net Profit * 100 = 120,683,074.30 * 100 = 51.06%

Profitability = Net Sales 236,342,212.70

Profitability is the net result of a good number of policies and decisions. Provides answers about how the business is doing or how efficiently it has been managed.

It is important to note that the aforementioned estimate was made because sales between March and April increased by 359.90 and from April to May, sales increased by 52%, which is why the projections have a Increase, quite considerable, is also part of the goals of the company and the growth process in which it is.

For the year 2.004 the profitability is presented with 40.54%, this indicates that for each bolivar of sale the company is earning 0.4054 cents, for the year 2.005 it is observed in 44.93% that is, the profit is increased by 0.0439 per Each bolivar sold, for the year 2.006 according to the estimated projections the company obtains a profitability of 51.06%, this indicates an increase from the year 2005 to 2.006 in 0.0613, this indicates that for each bolivar sold the company earns 0.5106 cents.

3.3.1.2. Physical Resources (See Annex 4)

3.3.1.3. Technological Resources: (See annex 5)

The acquisition and development of new technologies allows obtaining favorable results in production, which allows obtaining favorable results in production, reducing costs due to series production.

The incorporation of air and heat diffusion dehydrators with state-of-the-art technology allows obtaining a continuous and homogeneous qualitative and quantitative production of the products that are introduced into it.

Dehydration technology results in products that can be stored without being refrigerated for long periods of time and without the use of preservatives. At the time of being used, the products dehydrated by this technique present organoleptic and natural qualities of the fresh process.

This possibility of storage for long periods of time (from 6 to 9 months), eliminates the pressure to which the producer is subject for the immediate placement of the products at harvest, which are the object of speculation by intermediaries. in the markets.

The production process begins with the reception of green fruit, then it is taken to the ripening room, when it is ready, it begins with the peeling and cutting on the counter and is placed on the trays, once the fruit is obtained, without the shell, peeled and cut It is passed through the immersion of sodium Metabisulfite or Ascorbic Acid at its concentration, in order to act as enzyme inhibitors and anti-microbial agents on the product and avoid changes in the color of the product. Be continuous on the counter for the runoff to finally load the dried carts from the oven. These are conducted inside the oven or drying chamber for the planned time. At the end of this cycle, carts are taken out and taken to the packaging sector for their final conformation and sealing.

3.3.1.4. Organizational Resources

This Organization Chart must be restructured by the company, so it does not reflect the legal, accounting, production staff and legal advice.

3.3.2 Intangible Resources

3.3.2.1. Human Resources

The organization's human resource is made up of:

• The board of directors is made up of four partners (General Manager, Administration Manager, Production Manager and Technical Manager) An external accountant who handles the financial part An Administrative Assistant It has six production employees Two maintenance operators

3.3.2.2. Innovation and creativity

The ever-changing market environment and customer needs require market-oriented companies to continually improve their old products and create new ones if they want to remain profitable and competitive. The type of products produced by the company under study is quite a novel product and little known in our region and country, up to the point of view of being considered as exotic, Venezuelan competitors present the product in an artisanal way, as the large centers of consumption, due to limitations in production volumes. regarding its process and packaging, which does not allow its placement in large consumption centers.

The company must take innovation initiatives aimed at the following aspects:

• Commercial alliance, Total Quality (ISO Standards) Electronic Commerce Relations with international markets (Conquest of strongholds)

3.3.2.2. REPUTATION:

• The FRUPROANCA company was created 4 years ago in the Merida market, which is translated into a trajectory of business growth with respect to the Dehydrated Fruits market. It has credibility because services and guarantees have been fulfilled according to the client's needs. The organizational formality with which the company operates, has had an acceptance in the market of possible distributors at the national level and with export wishes.

3.3.3. Organizational capabilities

All administrative procedures are set out in a procedures manual approved by the General Management. Production procedures are clearly defined and manuals are being developed. The company has all the administrative controls (cash outflow and inflow, petty cash management, bank books, income and expense ratios, bank reconciliations, sales, purchases and taxes) and the production department for incoming and outgoing of merchandise. (See Annex 6)

3.3.4 Criteria for assessing the sustainability of resources and capacities

Parameters: Product quality, prices, distribution Chapter V. Control systems to implement

• A computerized system. Example of the Administrative Saint for inventory control A cost accounting system for inventory control of raw materials, products in process and finished products Post-sale follow-up to observe that the product is reaching consumers in a timely manner Implement customer training mechanisms personnel Internal computer network Comprehensive security systems Formal records of the dehydration modules operation Implement ISO standards or other types of quality certifications

RECOMMENDATIONS

1. Shareholders are recommended to exhaustively audit the Financial Statements, because aspects such as the depreciation method of assets and production cost are not clearly defined, this does not allow an effective analysis of them. Completion, implementation and monitoring of manuals of standards and procedures Implementation of computerized inventory control systems Implement a training program for personnel in areas of human relations and production Seek strategic alliances with large distributors of consumer goods and natural products Take the necessary actions to export the product complete modules to really work on full production capacity implement and comply with administrative control systems,production and accounting (cost accounting) Restructure the organization chart adapting to the business reality.

BIBLIOGRAPHY

1. BESLEY, Scott and BRIGHAM, Eugene. Fundamentals of Financial Administration. Mc Graw Hill, Interamericana, 2001. Twelfth Edition CATACORA, Fernando. Accounting, the basis for managerial decisions. Colombia: Mc Graw Hill Interamericana, 1999. FRENCH, Antonio. Strategies for the company in Latin America. IESA editions. First edition. 2001 GIMBERT, Xavier. The Strategic Approach of the Company. Business Management Collection. El Nacional, 2001. GUILTINAN, Joseph. Marketing management. Mc Graw Hill, Interamericana, 1998 VIVES, Antonio. Financial evaluation of companies. Fifth reprint, Mexico, Editorial Trilla, 1997.

Antonio French. Strategy for the Company in Latin America. IESA 2001 editions

To complement what is stated in the present work, the keynote talk "Strategic Planning for SMEs" is suggested, given by Engineer Gonzalo García Espeche, in which the following questions are answered, among others: Where do you see your SME in 5 years and how to get there? Why do some institutions progress, others decline, and others disappear? Why do some perceive the challenges and changes in their environment? and What is the central objective of the strategy?

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