Modern economic conditions accentuate the need for businesses to find opportunities to maintain and increase their profitability. By optimizing business processes in the company, you can achieve increased profits or reduced costs. Each step to improve the main processes brings your company closer to a stable and economically safe position. this article will tell how to become a market leader by making thoughtful and balanced decisions.
Increase cash flow and customer base
Today, in most highly competitive industries, the “grow big or die” rule applies: margins are achieved through economies of scale. In this situation, you can forget about profit in the first years of the company’s operation. Otherwise, while you are slowly growing at the expense of your modest income, competitors will put tens of millions of investment or credit funds into the business and offer customers disproportionately better conditions.
But sometimes it’s impossible to come to terms with banks or investors. In this case, it is possible to ensure intensive growth of the company at the expense of customers: take them as a prepayment and invest in development. While the customer base is expanding and cash flow increasing, you can fulfill your obligations and repeat everything again.
Amazon is a prime example of operating at a loss. The first 10 years of its existence, it invested huge amounts of money in developing new technologies and developing promising niches. Now the capitalization of this marketplace is about $ 1 trillion.
A business plan is your assistant, not your boss
If you focus on a tough business plan, you can miss opportunities that were not previously anticipated. But sooner or later, the development of the company will slow down, then you will need to develop a financial model and business plan.
For any simulation, you should rely on smooth running processes. In addition to the strategic goal in the form of revenue growth and EBITDA (say, at least 50% per year for 5 consecutive years), many indicators can be adjusted almost weekly.
Explore the market thoroughly
introducing a new product should precede a marketing research, as a result of which it is necessary to get answers to the following questions:
• What product does the consumer need?
• Who sells a similar product, what is the total share of your future competitors?
• What are the weaknesses of products already in the market?
• What qualities should a novelty product have in order to outperform its competitors?
• Are there real barriers to entering the market?
• What are the prospects for its growth?
Build Competitive Advantages
For a product to quickly enter the market and successfully outstrip competitors, it must have the qualities that the product currently on sale lacks and which the consumer expects from it. To determine them, it is worth conducting a large-scale survey of customers and consulting with experienced experts.
Although it is often enough to carefully analyze the information that is freely available, from the point of view of common sense. This will help to identify the unique features of the product, by launching which, your company will get a chance to become a market leader. In any case, the task to be solved at this stage is to identify promising areas of development in terms of competition. Depending on the specifics of the activity, they can be different: the content of the product, its packaging, a wide assortment line, and so on.
Use modern production technology
Technological lines that meet the latest requirements let you optimize the production cycle. This enables the company to become more flexible, respond quickly to fluctuations in consumer demand, provide all outlets with the necessary assortment.
Establish sales channels
The company, just entering the market with its product, faces a difficult task – to find outlets that would agree to implement its product, because a similar product is already presented on the shelves. Often, creating your own retail network becomes the optimal solution. Sales points can be placed both in residential areas and in the central part of the city. some time later, when the consumer appreciates the quality of the products you offer, it is possible that the retail chains themselves will make you proposals for cooperation.
To become a market leader, you must take care of positive public opinion about your products. In the media it is necessary to regularly post materials containing the opinions of authoritative experts, employees of supervisory authorities confirming the high quality and compliance of the product with all requirements. In the consumers’ eyes you should become a manufacturer that guarantees a wide range, convenient packaging, constant availability of goods on the shelves.