About/Contact Info I am a business consultant for a leading North American business and [+/-] technology services company and have an MBA specializing in management.
If you’re running your own business, perhaps there’s no better time than the present to look for ways in which you can reduce your total expenses, without sacrificing the quality of your products or services.
The Entrepreneur website has listed 50 ways to save money by way of traditional and web marketing expenditures, location expenses, office overhead and insurance costs, and even tax and financial tips.
Some examples:
13. Buy recycled printer cartridges. Check Google or your Yellow Pages for a local recycled printer cartridge supplier;
25. Use independent contractors. Employers generally don't have to withhold or pay any taxes on payments to independent contractors. But be very careful that your independent contractors fit the definition provided by the IRS or you could face penalties, and;
48. Time your payments. Ask suppliers if they give discounts for early payment. If not, it's to your advantage to pay your bills-including utilities, taxes and suppliers-as late as possible without incurring a fee.
Regardless of the industry you operate within, if you want to truly identify your company's competitive advantage, you need to be able to understand the strengths and weaknesses of your business, and how the strategies you have chosen affect your profitability.
It's simple enough to list all of your company's strengths and weaknesses, but to do this effectively, you must benchmark, or compare, these items against those of either your competitors or even against your own past performance. If you're new to the concept of benchmarking, there is a helpful resource on what it is, and how to do it, which can be found here.
By comparing and analyzing your company's performance in this way, you can begin to understand which of your management decisions have been the most profitable to your business, and which have missed the mark. In this way, you can begin to focus in on your company's return on investment (ROI), and look for ways to make the decisions that bring the highest return thus increasing your profitability.
The most profitable companies are the ones which fully understand their markets and their competitors. According to the CEO Refresher, there are six ways to deliver customer value by becoming more market-focused:
Develop a sense of purpose around creating superior customer value and communicating this purpose to your entire organization. This approach also requires you to reward and encourage your employees to think in such ways.
Understand your customers better than they even understand themselves. Do this by conducting market research on what these customers want and need, either expressed or unexpressed, and by distilling and disseminating this research throughout your organization.
Understand the short- and long-term strengths, weaknesses and capabilities of your current and potential competitors. To do this, the authors state that you need to distill your competitors' strategies and tactics into meaningful evaluations.
What this means is that you must assess their capabilities within the competitive environment, and then determine how this will impact the competitiveness of your own organization. As with the previous step, you again share your findings with your organization.
Use a collaborative approach to develop and evaluate new products and services to meet the needs of your customers. Two recommended ways of doing this are by internal cross-functional training and by external "value-creation" partnerships with suppliers or channel partners. The goal here is to be profitable in creating customer value via collaborative methods such as these.
Develop your decision-making to focus on the long-term relationships you will be building with your customers. To do this, you must establish clear criteria for emphasizing the long-term, profit-oriented decision making. The article gives a great example with Toyota's shift in the early-1980s in wanting to be number one in market share to number one in satisfaction. The results for the company - in both categories - have been tremendous.
Finally, there must be strong leadership from the top. The CEO must develop a shared vision of strengthening the company's market culture that demonstrates commitment and involvement right from the top. This is demonstrated by the actions and behaviour of the CEO, and from how the organization rewards employees who share in the vision.
Not long ago, marketing activities were constructed to simply promote product sales and focus on building market share; strategies that focused on how companies could move the most units of merchandise were considered the right way to go. In today's competitive business environment however, marketing activities are constructed to fulfill the needs of consumers.
Consumer-oriented marketing strategies give the marketing manager the tools required to examine which stores/distribution channels should carry the product; the price-sensitivity of the product or brand, and which segments of the population are the purchasers of the product.
Therefore, for an organization to take on a consumer oriented approach, it will have to ask the following questions:
How is the market segmented? For instance, are the primary consumers brand loyalists, cost-conscious, or conspicious consumers looking to purchase luxury items for status?
What is the profitability of each of these segments? Once the segmentation of the market is known, the organization should then determine the size and profitability of each of these segments. The potential for large, underserved segments of the population to exist is there and organizations that have clearly identified these potentially profitable segments can find great success.
What are the common characteristics of the consumers in each segment? Now that the company has defined the segments and the profitability of each one, the marketing management must then look at the characteristics, habits, values, and influencing factors of these potential customers. By doing so, the managers can better predict whether the segment is more likely to grow or to shrink in the future. This will undoubtedly have an impact on future campaigns and marketing strategies
A final point worth mentioning is that marketing management should also ask themselves if the existing customers are actually satisfied with the current products and services offered by the organization. Ideally, this is done after the market segmentation has taken place; this way the organization can better tailor its offerings to the needs of specific customers.
By determining who the customers are and customizing and tailoring their offerings to these customers, marketing managers can benefit by: a) fulfilling the needs of underserved consumers; and b) creating long-term value and growth opportunities for their respective organizations.
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