It goes pretty much without saying that some business houses are better than others. There are companies that are able to pull a large number of investors. The moment a big business house releases an Initial Public Offer (IPO), prospective shareholders take the stock exchange by storm in order to get their hands on the company’s shares.
The power of name, fame, and money cannot be taken for granted. Name recognition, market share, innovative practices, etc. play their part in making a company formidable. From an investor’s point of view, it is important to keep track of a company’s progress if and when he plans to invest in the company. An investor needs to keep an eye on what the company is doing. Now, investing in a business isn’t the easiest of tasks to undertake. You need dynamic business solutions to survive in a product parity market.
1. Competitive advantage does matter
There are companies that sell products at a lower cost. In this way, they are able to outshine their competitors. Everybody loves products that are cheaper, right? At times, people tend to buy a product blindly just because it is cheap. Budget buyers are the ones who happen to be on the lookout for cheaper options. This particular scenario is known as cost advantage. The Chinese smartphone giant Xiaomi is a prominent example of the same
At times, companies provide customers with superior-quality products and services that happen to be at par with the market price. In this way, customers are able to get their hands on better products without having to spend excessively. This scenario is known as Differentiation advantage.
2. Barriers to Entry cannot be taken out of the picture
Big companies can maintain their hold over the market if there are barriers to entry within the sector. Pharmaceutical businesses and players in the IT sector are able to sustain themselves because the level of competition they face is saturated. This happens when a limited number of established players control the market. Companies undertaking medical research fall under this category.
3. Name Recognition
Name and goodwill do matter. This is where the concept of goodwill comes into the picture. You need to build a name for yourself. Your name will speak volumes on your behalf. This concept is known as brand equity. People will keep on buying your products if yours is an established name in the market.
4. Managerial skills also count
An efficient management team forms the heart and soul of a company. The senior management within a company ( The Head HRs and the reputation leads) are the face of the company. They represent the company during seminars, conclaves, and major client meetings. It is important for senior managers to develop strategies that resonate with the target audience. Your customers will definitely buy your products if they can relate to it.
Innovation is key
It is imperative for business houses to keep on innovating. If the products being developed by a company reach a saturation point. You cannot keep selling the same product over and over again. There has to be a certain degree of newness in the product you make. There are companies that keep innovating in an attempt to woo the customers. Tesla motor company is a major example of the same.
To conclude
A multitude of reasons are responsible for turning a business story into a success story. Companies that understand the needs and requirements of its customers are able to make a name for themselves in the world of business. The rest of them tend to perish in the long run.
