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Success Failure and Principles of Competitive Success

  1. Success, Failure and principles of Competitive Success BBA 205 Dr Sudhir Bisht 1
  2. Business Failure. A situation in which a company or other business ceases operations because it is unable to generate sufficient revenue to cover its expenses. Business failure is relatively common in the first year or so of operations because the owner is unable to compete for any number of reasons. A company ceasing its operations following its inability to make a profit or to bring in enough revenue to cover its expenses. The final step is always that the business runs out of cash. “Success is running a profitable firm that conducts business with honesty and integrity, makes meaningful contributions to the communities it serves and nurtures high- quality, balanced lives for all employees. As business owners, we must think outside of our own doors. We must think about the potential impacts that we have on those around us, as well as future generations.” – Hope Wilson, president of Wilson Business Growth Consultants “Success is something we should always be striving for. It comes in different sizes and shapes. It is seen as various things from varying viewpoints. It can often be hard to achieve, but in some way, it leaves the world a better place.” — Michael Byrnes, national speaker and president of Byrnes Consulting 2
  3. Principles of Competitive Success Maintaining a competitive edge is vital to the long-term success of any small business. While there are a wide range of factors that determine the success or failure of any company, there are number of key components to competitive success in business all entrepreneurs should heed. These components are found in nearly all divisions of a company, including marketing, human resources and finance. Planning Business planning is vital to keeping your company pointed in the right direction. Take the time to create a thorough plan–giving thought to product development, operations, marketing, financing, business models and staffing issues– before you begin to build your business. Planning is not only important in the early stages; revisit your strategic plans regularly to keep the direction of your business in line with current and future trends in the marketplace. Value Creation Continuous value creation (CVC) is the disciplined process of continually examining your current product or service offerings to ensure that they are above the industry standard. Your product may be a star in the marketplace today, but it might not take long for a competitor to create a slightly better product, a new method of delivery or a new customer experience. Keep your operations as flexible as possible to quickly take advantage of new industry trends. Make research and development a consistent priority to ensure that you are the first to market with new innovations. 3
  4. Customer Service Effective customer service is the largest determining factor of customer loyalty and repeat purchases. According to MarketingSphere.com, this single factor often can give small businesses an edge over their larger competitors. Focus your sales and service efforts on delivering the most satisfying customer experience in your industry, and you will see a dramatic increase in word-of-mouth referrals and repeat sales. Financial Management Managing your finances wisely can go a long way in helping you achieve long-term business success. Your small company may not have vast credit reserves available, so taking the time to build up a credit reputation through frugal purchasing and disciplined debt repayment is important to the growth of your operations. Pay attention to your debt-to-assets ratio and your times-interest-earned ratio, and compare them to other players in your industry. These ratios will give you an idea of how much of your success relies on borrowing money from banks and other lenders. Small businesses can gain an advantage by being much less dependent on debt than their larger competitors. Marketing Marketing can be a weak point in many small businesses because the sheer costs of traditional media outlets can be daunting to companies with small budgets. Nevertheless, a steady marketing presence is vital to competitive success in business. If you do not have the funds to implement a full-scale television, magazine or radio campaign, get creative and stretch your marketing dollar as far as possible. Social media outlets, such as Facebook and Twitter, have become widely popular means of communicating with customers at virtually no cost. Consider sponsoring local events in your target markets or maintaining a presence at local trade shows. Place ads in local newspapers and smaller magazines. Post promotional flyers around town, and offer promotions. Host a charity event, and match all event sponsorships with citywide news releases. The possibilities for bootstrap marketing opportunities are virtually endless. 4
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