CHAPTER I

INTRODUCTION

Background of the Study

One of the most crucial issues facing our country nowadays is poverty. And

this issue can lead to the lack of supplies to our daily needs, and worst, the

inescapable death. Luckily the world provided us so many resources we can use to

live. The thing is, money, plays the most significant role in today’s market. In order to

live, we need money and in order to have money, we need to work.

That’s why people in early centuries developed an efficient way to circulate

money, introducing us business. According to Dicksee, business refers to a form of

activity conducted with an objective of earning profits for the benefit of those on

whose behalf the activity is conducted. Different businesses have different goals and

take different routes to fulfil those goals.

The desire for success – is another motivating factor that can influence decisions

about the business. Evaluation of success is basically ambiguous issue; it is difficult to

determine who is a successful entrepreneur. Even entrepreneurs themselves assess

their success in different ways. Most often it is evaluated by the financial aspect or the

approval of others.

Success is achieving goals. An important factor for a successful business is an

entrepreneur. When an entrepreneur opens a business, a great deal of work goes into

making that business a success. An experienced business professional will tell you

that success in business is planned and does not happen by accident. Several factors

contribute to the success of a business, and understanding what they are and how they

work together can help your business succeed. (Root III, 1985)

1
 Business strategy has become an important tool in any business or any

organization to achieve the goals of a business. The entrepreneurs of Aurora, Isabela

have different business strategies to develop and improve their business. Also, these

business strategies have advantages and disadvantage that may affect their business.

Mostly, the entrepreneurs in Aurora, Isabela are sole proprietorship.

The main objective of this study aims to explore the business strategies of

successful small business owners in Aurora, Isabela.

Research Questions

This research study aimed to answer the general question, “What are the

business strategies of a successful small business in Aurora, Isabela?” Furthermore, it

aimed to answer the following specific questions:

1. What is business profile of the respondents in terms of:

a. nature of business

b. length of business

c. type of business

2. What are the advantages of these strategies to their business?

3. What are the disadvantages of these strategies to their business?

Significance of the Study

The findings of this research proved useful to the following entities:

2
 1. Businessmen/ Businesswomen. They gained knowledge that may able to

improve their business.

2. Future Researchers. This study helped the researchers in the same filled

with the literature to support their arguments and hence improved knowledge.

3. Students. This study helped the students to gain information especially

when they want to have a business in the future. The information they got

from the study can help them to manage their business someday.

Scope and Delimitations

This research study entitled “Business Strategies of Successful Business

Owners in Aurora, Isabela” was conducted at Aurora, Isabela from January 6, 2020 to

February 27, 2020 with twenty (20) respondents from Aurora, Isabela having a

business.

This study is limited only in determining the business strategies of successful

small business owners in Aurora, Isabela. This study conducted a survey. The

questions answered by the owner of the different successful small business at Aurora,

Isabela. The owners of the successful small business were the respondents in this

study.

Chapter II

Review of Related Literature

Related Literature

3
 Johsons & Scholes (2018) stated that strategy is the direction and scope of an

organization over the long-term: which achieves advantage for the organization

through its configuration of resources within a challenging environment, to meet the

needs of markets and to fulfill stakeholder expectations.

In order for any business to remain in control of its growth and maintain its

structure, there needs to be business strategies in place. Good business strategies are

not influenced by the personal preferences of corporate management, and they are not

dictated by the corporate culture, according to the management experts at CMA

Management writing on the Entrepreneur website. In order to create an effective

business strategy, you need to first understand its purpose. ( Root III, 2017)

According to business-case-analysis.com, business strategy is sometimes

defined simply as a firm's high-level plan for reaching specific business objectives.

Strategic plans succeed when they lead to business growth, a strong competitive

position, and strong financial performance. When the high-level strategy fails,

however, the firm must either change its approach or prepare to go out of business.

Business strategy is the firm's working plan for achieving its vision, prioritizing

objectives, competing successfully, and optimizing financial performance with its

business model. The choice of objectives is the heart of the strategy, but a complete

approach also describes concretely how the firm plans to meet these objectives. As a

result, the strategy explains in practical terms how the firm differentiates itself from

competitors, how it earns revenues, and where it earns margins.

Business strategies used for manufacturing, marketing and sales can help your

business remain ahead of the competition in the marketplace, according to the

business experts at the Quick MBA website. Part of a good business strategy is to

4
identify the strengths and weaknesses of the competition, and then develop ways to

get past the strengths and exploit the weaknesses. Whether it is streamlining

manufacturing to lower the cost of the finished product, or it is finding a different

message to deliver the target audience, using good business strategy can help your

company stay ahead of the competition and gain the marketplace advantage.

According to reference.com, business strategy acts as a planning and

organizational tool, helping companies set goals and objectives for long-term growth

and development. Business strategy exists in two primary types, which are generic or

general strategies and competitive strategies. Strategies act as outlines, helping

businesses set goals several years out, then plan necessary actions, expenditures and

tools necessary for achieving those goals.

Most small businesses take at least 2 to 3 years to be profitable and become

truly successful once they’ve hit the 7 to 10 year mark

Small companies and large organizations alike use business plans for

managing finances and allocating resources. These plans typically cover periods

between three and five years. Business strategies serve as forecasting tools, letting

businesses determine potential scope of expansion, whether that entails opening up

additional locations or producing higher volumes of products. Business strategies

involve making future projections for growth and activity by considering past

performances and fundamental values.

Strategy meetings often involve revisiting mission and value statements,

which set forth basic business goals. General strategies set forth general plans for

business growth, while competitive strategies identify specific means of reaching

those targets. These strategies involve a plan of action, such as ramping up production

5
or introducing products. Competitive strategies help companies outperform rivals,

accomplished by offering similar products at lower prices or producing different

products. Top management oversees creation and implementation of business

strategies, which require coordinated efforts among internal departments.

Entrepreneurial strategy is also affected by the fact that markets may not yet

exist. Unlike for established firms, entrepreneurial firms may not have well-accepted

markets and customers for their products and services. Venkataraman has argued that

the nature of entrepreneurship involves “understanding, how, in the absence of

markets for future goods and services, these goods and services manage to come into

existence.” (Venkataraman 1997) This has several implications for entrepreneurial

strategy because it means that markets must get created where none existed

previously. Here, researchers have argued that market formation occurs when skilled

entrepreneurs collectively mobilize followers, challenge incumbent firms in related

markets, and free up space for their markets. (Weber, Heinze and DeSoucey 2008)

(Sine and Lee 2009) They have also shown how pioneers use rhetoric strategically

and persuasively to gain powerful endorsements and convince other market

participants that existing markets are inadequate and new ones are warranted. (Hiatt,

Sine and Tolbert 2009)

Based on smallbusiness.chron.com, organizations use business-level strategies

to gain a competitive advantage over industry rivals by exploiting core strengths in

specific market segments. One of the primary objectives of business-level strategy is

to establish the organization's position in a particular industry relative to competitors.

Organizations implement both generic and specific strategies to help gain this

competitive edge over rivals. However, business-level strategies pose both advantages

and disadvantages.

6
 In business-level strategy, the customer is the foundation. To successfully

implement any strategy, the business must understand the customer, including

information about gender, age, values, consumption patterns and geography.

Anticipating the needs of the customer and answering these needs can give a business

an advantage over the competition. Businesses can work toward satisfying customers

by creating strategies that have value to the organization and the customer. A

successful strategy helps give the business intimate knowledge about customers and

competitors. This knowledge can lead to greater revenue for the business.

When choosing a business-level strategy, an organization must carefully

monitor business and avoid complacency. Business-level strategies require the

organization to always remain vigilant regarding the needs of customers and the

potential encroachment of competition. Once a business implements a strategy, it

should avoid developing tunnel vision once the business achieves a certain level of

success.

As Gibus and Kemp (2003) put it, strategy plays a crucial role in the

performance of a firm because it helps to define the direction along which a firm

intends to move and how the firm is going to get there. Thus, a firm's performance is

also dependent on its business strategy and how effectively the strategy is

implemented by the firm (Olson and Bokor, 1995).

The word strategy has several perspectives to it and therefore does not have a

single definition. In its broad perspective, strategy can be considered as a coordinated

plan or outline for making decisions and carrying out the activities of a firm, using

available resources to create value and to achieve organizational goals, particularly in

the long term. Mintzberg (1990) identifies five other perspectives within which

strategy has been defined. Reference is made to Chandler (1962) who defines strategy
7
as a plan of action which are taken to realize the long-term organizational goals. In

another vein, strategy deals with the pólices and key management decisions which are

directed at exerting major impacts on an organization's financial performance

(Buzezell and Gale, 1997). In the words of Porter (1996), strategy is the process by

which an organization can create a unique and valuable position by undertaking a set

of activities that are different from those of an organization's competitors. Porter's

position supports Miller and Friesen (1983) who have stated that for a strategy to be

effective, it must be unique, rather than an imitation of what already exists.

Related Studies

Based on the study conducted by Kraus, Schwarz, and Harms entitled

“Strategic Business Planning and Success in Small Firms”, this paper attempts to

identify the degree and the methods of strategic business planning in small

enterprises. A broad literature review on strategic planning in small enterprises in

entrepreneurship and strategy journals within the last 25 years reveals that strategic

planning in small enterprises is still in its infancy, and the reports of its relationship

regarding success are not consistent. This literature review serves as a starting point

for the development of hypotheses. Using a sample of 248 small Austrian enterprises

from various industries, we test if the time horizon of strategic plans, the degree of

formalization, the use of strategic planning instruments and the frequency of control

relate to firm performance. We discover that the degree of formalization has a

positive, and highly significant, impact on firm performance. As a result, this paper

seeks to provide a new conceptual definition of strategic planning in small enterprises.

8
 According to the study of Shonesy and Gulbro entitled “Small Business

Success: A Review of Literature”, much has been written in the literature regarding

reasons for small business failure, leading to confusion about those studies, as it is

often difficult to define failure. There are fewer studies citing reasons for small firm

success. Factors citing reasons for failure may also appear as factors affecting success

according to Gaskill, VanAuken, and Manning (1993). Therefore, this review of the

literature will concentrate on reasons for small business success, which can in turn

also infer reasons for failure for those who are interested in that topic. Three

categories for success emerge in this review. They are strategic issues, demographics,

and owner characteristics. However, there appears to be no one set of reliable

variables that will always consistently promote success, because of the differences

that exist within each individual small firm, including owner/manager differences.

A study by Beckman and Marks (1996) found that business experience was a

factor in the success of small firms. Another study by Costa, 1994, indicated that

strategic planning contributes to long-running success for businesses. Other factors

for success include quality, customer focus, innovative marketing practices, flexibility

and employee empowerment (Zetlin, 1994). Filley and Pricer (1991) defined several

tools for small business success. These included good management techniques, such

as appropriate operating strategies, leadership and time management. Other tools were

good financial management and pricing strategies, motivational strategies for

employees, and ensuring only those employees with ability are hired.

Ibrahim and Goodwin (1986) stated that "Success in business is defined in

terms of rate of return on sales, and age or longevity of the firm" (p. 42). Cuba,

Decenzo, and Anish (1983) and Khan and Rocha (1982) also found that sales, profit,

and longevity were important to success. Hofer and Sandberg (1987) noted that high

9
quality services or production was the key to success for firms and was directly

related to effective management and planning, which relied upon effective

management decisions.

Based on the study “A concept of entrepreneurial strategy” by Murray,

entrepreneurial strategy is characterized as strategy involving widespread and more-

or-less simultaneous change in the pattern of decisions taken by an organization The

concept is distinguished from others which use 'entrepreneurial' to characterize a long-

term pattern of strategic behaviour. Entrepreneurial strategy will be enacted with

some greater or lesser frequency by all firms, whether their long-term behaviour is

conservative or innovative It is hypothesized that such strategy will be observed

occurring in cycles at the single business-unit level in response to both environmental

and organizational stimuli and that it will reflect choice from a limited repertoire of

basic strategic moves.

Synthesis

This chapter presents the Review of Related Literature and Studies. The

researchers prefer the following sources for guidance and also because of their

significance to the current study that is conducting. These show different concept,

ideas, and knowledge of different professionals and writers about business strategy of

successful small business owners that will help in better understanding of the topic.

The related literature and studies have significant connection with the current

study for the reason that both are giving ideas and discuss the business strategies,

advantages and disadvantages of this to the business of successful small business

owners. Other studies find different business strategies in small business success and

different entrepreneurial strategy used. By reviewing the past studies and literature,

10
the researcher found out that business strategy is really important in a business

success. This research is conducted despite of many past studies have been conducted

related to the current study. The researchers were satisfied that the current study will

be valued as an additional reference to future researchers

Conceptual and/ or Theoretical Framework

INPUT PROCESS OUTPUT

Business Survey Success Small
Strategy questionnaire Business Owners

11
 CHAPTER III

METHODOLOGY

Research Design

This study entitled “Business Strategies of Successful Small Business Owners in

Aurora, Isabela” used a qualitative research design. This design used to determine

the business strategies of successful small business owners in Aurora, Isabela. In

order to determine business strategies of successful small business owners in Aurora,

Isabela, the researcher conducted a survey on the owner of small business to gather

information that was needed in the study.

Samples and Sampling Procedure

Purposive sampling was used in selecting twenty (20) respondents who have a

small business around Aurora, Isabela.

Data Collection Procedure

The survey used in the study was self-made questionnaire validated by the

research adviser. These questionnaires were distributed and administered among the

business owners in Aurora, Isabela.

Data Analysis

12
 For the purpose of this study, frequency and percentage was used in analysing

the data.

CHAPTER IV

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter presents the data gathered for the realization of the following

specific problems set in Chapter I. This includes the gender of the respondents, nature

of the business, length of business, first business of the respondents, type of business,

business strategies, advantages and disadvantages of business strategies.

Table 1. Gender of Respondents

Gender Frequency Percentage

Male 8 40%

Female 12 60%

Table 1 shows the gender of the respondents. Among the respondents,

majority are female who has a percentage of 60%.

Table 2. Nature of Business Organization

Nature of Business Frequency Percentage

Organization
Sole Proprietorship 17 85%

13
Partnership 3 15%

Table 2 shows the nature of their business organization, most of the

respondents have a business of a sole proprietorship which is 85%.

Table 3. Length of business

Length of business Frequency Percentage

(years)
1-3 0 0%
4-6 4 20%
7-9 3 15%
10-Above years 13 65%

Table 3 shows the length of their business, 65% says that their business is 10-

above years, 1and 1-3 years with 0%.

Table 4. First business of the Respondents

Your first business Frequency Percentage

Yes 14 70%
No 6 30%

Table 4 shows whether their current business is their first business, 70% of

them says yes.

Table 5. Type of Business

Type of Business Frequency Percentage

Service 7 35%
Manufacturing 0 0%
Merchandising 3 15%
Retail 10 50%

14
 Table 5 shows the type of their business, majority of them says that they are

retailing, there’s no manufacturing business.

Table 6. Business Strategies

Business Strategies

13%
8%

54%
25%

Product Differentiation Innovation Strategy

Pricing Strategy Growth Strategy of New Products or Features
Finding New Markets Customer Service

Table 6 shows their business strategies, customer service got the highest

percentage which is 54% and growth strategy of new products or features and finding

new markets for products got 0%.

Table 7. Advantages of Business Strategies

15
 Advantages of Business Strategies

20%
32%

12%
4%
8% 24%

Improve Chances of Success Competitive

Better Understanding to your Current Business New Opportunities
It increases operational efficiency It can make a business more durable

Table 7 shows the advantages of business strategies, 32% is the highest

percentage among all the result which is to improve chances of success and the new

opportunities with 4%. In this table we can see the different advantages of business

strategies with different mean.

Table 8. Disadvantages of Business Strategies

16
 Disadvantages of Business Strategies

13%

38% 13%

8%

29%

Strategy Risk A Complex Process Time Consuming

Difficult to Implement Require Skillful Planning Financial Risk

Table 8 shows the disadvantages of business strategies, the highest percentage

is 38% which is financial risk and lowest are 0% in a complex process. In this table

we see the different advantages of business strategies.

CHAPTER V

17
 SUMMARY, CONCLUSION AND RECOMMENDATION

A. Summary

This study dealt with the investigation on the business strategies of

successful small business owners in Aurora, Isabela that aimed to determine

the business strategies that make their business successful. The demographic

profile of the business owners, theirs business strategies, the advantages and

disadvantages of their business strategy.

The data gathered showed that the respondents were eight (8) male and

twelve (12) female. The business profile of the respondents in terms of nature

of business is sole proprietorship. The length of their business is 10-years

above. And fourteen (14) says that it’s their first business. In table 6, it is

found that the respondents more often used customer service with 54%, next is

pricing strategy with 25% and lastly product differentiation with 8%. In table

7, it is found that the advantage of the business strategy is improve chances of

success with 32%, next is competitive with 24% and lastly, it can make a

business more durable. In table 7, it is found that the disadvantage of their

business strategy is financial risk with 38%, next is require skillful planning

with 29%, and lastly,time consuming with 13%.

B. Conclusion

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 According to the answers of the respondents and the findings of this

research, the business profile of the respondents in terms of nature of business

is sole proprietorship; length of business is 10-years above; type of business is

retailing.

In light with the findings of the study, it can be concluded that the

business strategies that more often used by the business owners is customer

service, pricing strategy, and product differentiation. Somewhat the

advantages of this business strategies is improve chances of successs,

competitive, and make the business more durable. Additionally, the

disadvantages of this business strategies is financial risk, require skillful

planning, and time consuming.

C. Recommendation

To further improve the claims of the study, it is recommended that

future researchers may add more statements to be answered, to add more

respondents and provide more questions that reliable to the research.

Bibliography

19
RILEY(2016).An Introduction to Business Strategy. Retrieved on February 26, 2020

from https://www.tutor2u.net/business/reference/business-strategy-introduction

SCHMIDT(Formulate a Winning Business Strategy, Business Model, Strategic

Framework. retrieved on february 26, 2020 from https://www.business-case-

analysis.com/business-strategy.html

BASS & BRIAN. "Advantages & Disadvantages of Business-Level Strategy." Small

Business - Chron.com, http://smallbusiness.chron.com/advantages-disadvantages-

businesslevel-strategy-19209.html. Accessed 26 February 2020.

Schmidt, Marty, Business Encyclopedia, Solution Matrix Ltd.,

ISBN 9781929500147, 2012-2019.

J. Yanney, K. Dennis & G. Awuah, 2014, The Effect of Business Strategy on

Organizational Performance of Small-Medium Scale Enterprises in the Manufacturing

Sector of Ghana, Munich, GRIN Verlag, from

https://www.grin.com/document/294536

https://www.reference.com/business-finance/purpose-business-strategy-

7351ae4fca9c656c

PAHWA(2020)business strategy

Business Strategy: Definition, Levels, Components &

Examples.https://www.feedough.com/business-strategy-definition-levels-examples/

ALLEN & HEMLS (2006). Business Process Management Journal 12(4):433-454

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https://www.researchgate.net/publication/235293844_Linking_Strategic_Practices_an

d_Organizational_Performance_to_Porter's_Generic_Strategies

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S. Kraus, R. Harms, & E.Schwarz (2006).The Importance of Strategic Planning in

Small New Ventures: Overview and New Empirical Data. From

https://www.researchgate.net/publication/46702004_Strategic_Business_Planning_an

d_Success_in_Small_Firms

SHONESY & GULBRO (2005) SMALL BUSINESS SUCCESS: A REVIEW OF

THE LITERATURE. https://www.equitynet.com/media/pdf/Small%20Business

%20Success%20-%20A%20Review%20of%20the%20Literature%20(Linda

%20Shonesy,%20et%20al,%201998).pdf

MURRAY (1984) A concept of entrepreneurial strategy

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BARRINGER & IRELAND. Entrepreneurship fourth edition succesfully launching

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How Long It Takes for a Small Business to Be Successful: A Year-By-Year

Breakdown

21
APPENDICES

22
 APPENDIX A
(LETER TO RESPONDENTS AND
QUESTIONNAIRE)

Republic of the Philippines

Department of Education

23
 Region 02 (Cagayan Valley)
Schools Division Office of Isabela
342077 - AURORA SENIOR HIGH SCHOOL
Ballesteros, Aurora, Isabela 3316
 ashs.342077@gmail.com
The respondents,

We, the researchers of GRADE 12-Augustine, are currently working on the

study entitled “Business Strategies of a Successful Small Business Owners in Aurora,
Isabela” as a requirement to our Inquiries, Investigations and Immersion subject. In
connection with this, may we request your ample time to answer the questionnaire.
Rest assured that the data collected will be treated with utmost confidentiality.

Thank you very much for your help and cooperation. This contributes much to
the success of the study.

-The Researchers

Part I. Demographic Profile

Direction: Please fill out the following information.

A. Name (optional): __________________________________________________

Gender: __________ Age: _______

B. Business Profile

1. What is the nature of your business?

○ Sole Proprietorship

○ Partnership

2. How long have you been in your business?

○ 1-3 years

○ 4-6years

○ 7-9 years

○ 10-above years

3. Is your business your first business?

○ Yes

○ No

24
4. What type business do you have?

○ Service

○ Manufacturing

○ Merchandising

○ Retail

Part II. Business Strategy

Direction: Put a check to the box/es that corresponds your answer.

(You may choose 1 or more choices.)

A. What is your business strategy?

 Product Differentiation
 Innovation Strategy
 Pricing Strategy
 Growth Strategy of New Products or Features
 Finding New Markets for Products
 Customer Service
 Others (please specify):__________________

B. Advantages of Business Strategies

 Improve Chances of Success

 Competitive
 Better understanding to your current business
 New opportunities for the business
 It increases operational efficiency
 It can make a business more durable
 Others (please specify):__________________

C. Disadvantages of Business Strategies

 Strategy Risk
 A Complex Process
 Time Consuming
 Difficult to Implement
 Require Skillful Planning
 Financial risk
 Others (please specify):___________________

25
26
APPENDIX B
(APPROVAL SHEET)

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30
31
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36
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47
APPENDIX
C
(CURRICULUM VITAE)

Curriculum Vitae

48
 Personal Background

Name: Rey-Ann Joyce A. Acoba

Sex: Female

Age: 17 years old

Address: Ballesteros, Aurora, Isabela

Birthday: March 05, 2002

Father`s Name: Reynaldo A. Acoba Sr.

Mother`s Name: Anita A. Acoba

Religion: Roman Catholic

 Educational Background

Elementary: Ballesteros, Elementary School

Ballesteros, Aurora, Isabela

Years Attended:2008-2014

Secondary: Doña Aurora National High School

Sta. Rita, Aurora, Isabela

Years Attended: 2014-2018

Secondary (Senior): Aurora Senior High School

Ballesteros, Aurora, Isabela

Year Attended: 2020 – Present

Curriculum Vitae

 Personal Background

49
 Name: Dely Ann D. Jacinto

Sex: Female

Age: 18

Address: San Ramon, Aurora, Isabela

Birthday: December 24, 2001

Father’s Name: Antonio S. Jacinto

Mother’s Name: Adelina D. Jacinto

Religion: Born Again

 Educational Background

Elementary: San Andres Ramon Elementary School

San Andres and San Ramon, Aurora, Isabela

Years Attended: 2008-2014

Secondary: Doña Aurora National High School

Sta. Rita, Aurora, Isabela

Years Attended: 2014-2018

Secondary (Senior): Aurora Senior High School

Ballesteros, Aurora, Isabela

Year Attended: 2020 – Present

Curriculum Vitae

 Personal Background

50
 Name: Gwyneth C. Tamano

Sex: Female

Age: 18

Address: Bolinao, Aurora, Isabela

Birthday: September 29,2001

Father’s Name: Rafael M. Tamano Jr.

Mother’s Name: Noemi C. Tamano

Religion: Roman Catholic

 Educational Background

Elementary: BolinaoElementary School

Bolinao, Aurora, Isabela

Year Graduated: 2008-2014

Secondary: Doña Aurora National High School

Sta. Rita, Aurora, Isabela

Years Attended: 2014-2018

Secondary (Senior): Aurora Senior High School

Ballesteros, Aurora, Isabela

Year Attended: 2020 – Present

Curriculum Vitae

 Personal Background

51
 Name: Jennelyn D. Yanuaria

Sex: Female

Age: 18

Address: Malasin, Aurora, Isabela

Birthday: July 17, 2001

Religion: Roman Catholic

Father’s Name: Jaime A. Yanuaria Sr.

Mother’s Name: Elizabeth D. Yanuaria

 Educational Background

Elementary: Malasin Elementary School

Malasin, Aurora, Isabela

Year Graduated: 2008-2014

Secondary: Doña Aurora National High School

Sta. Rita, Aurora, Isabela

Years Attended: 2014-2018

Secondary (Senior): Aurora Senior High School

Ballesteros, Aurora, Isabela

Year Attended: 2020 – Present

52