Is there a market?
To make your business more successful, you need to identify a potential market, by using market research.
Turning the idea into reality will require information found to influence strategy and tactics.
Strategy: Co-ordinated long-term planning.
Tactics: Opportunities to influence problems.
Competitive advantage: Commodity Products
- Standardised products
- Products that everyone needs (Milk, Petrol, Potatoes)
- Most customers buy the same
- Some companies attempt at branding and differentiation.
Competitive advantage: Added value
- A business needs to sell the product for more than the cost it took to make the inputs of the product.
- This requires the customers to pay more for the product because of the added value the company have placed on the product.
The characteristics of products/customers are sub-divided into market segments.
- Social Class
- Behaviour (spending habits)
Building Strong Relationships
With stakeholders who have an interest in the business.
- Business is their friend
- Has customer interests at heart.
Why: Customer loyalty
Owners/Shareholders: Owners of the company hope for profits.
Employees: Employees are entitled to safe working environment and agreed wages.
Consumers: Quality and standards of the goods/service
Creditors: Expect payment on time.
Local Community: awareness of the local community and environment.