Success, Failure and principles
of Competitive Success
BBA 205
Dr Sudhir Bisht
1

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

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

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

5