Business phases in line with the market
Under market-compliant business phases refers to the stage of the business processes , adjusted the consecutive and can be optimized in response to changes in market history .
Market shares
A market lifespan is characterized by a market emergence, an increase in sales, through growth to a peak, followed by a downturn until the market disappears. Business administration defines these sections: launch, growth, maturity , saturation , decline and market end . The success of a business and good profitability is directly dependent on the company's ability to adapt its business processes to changing market developments.
The return on investment in industrial companies depends on its profitability and this on the costs. These in turn depend on the size of the company, capital employed, operational factors, capacity utilization, logistics as well as the experience and motivation of the employees. There is a clear relationship between cost and market share; usually the competitor with the largest market share (market leader) has the lowest costs. The costs of the market leader are lower than those of its competitors, because a higher market share leads to higher volumes and thus to more experience among employees. Anyone who can achieve a fundamental cost advantage in a relevant market has the potential to grow faster and gain higher market shares - which further increases a cost advantage. With an appropriate strategy , market leaders expand their lead to such an extent that they permanently generate really good profits .
Indicators of past success are investment returns and financial gains. However, in order to continue to be successful in the future as a previously successful company, it must develop further and set itself ever higher goals. The best prospect of future success is increasing market growth - the opportunities are evident. For the company, they consist in gaining and expanding competitive advantages.
Focus
Lasting success requires - even in mature markets - to constantly find new opportunities for innovation . Before a market is mature, compliant businesses go through four phases: emergence, growth, advantage, and efficiency . The focus of activities in an industrial company must change with every change in the market phases. This also shifts the weight of the individual influencing factors on the profitability of a company.
With changing growth rates of a market, the size of a company, the availability of capacity and the degree of maturity of production are adapted to new circumstances. Each business phase that is in line with the market differs fundamentally from the others in terms of its orientations, goals, qualities of success and standards . In their entirety, they represent the value system of an organization - the basis for its performance.
Alignment
When a market is created, the global marketing of the products is generally considered in order to create the basis for sales opportunities as much as possible. With increasing growth , the way of competition in the market changes, so that the capacity of the company is adapted to the increased customer demand. When it is ready for the market and the downturn begins to emerge, advantages over competitors are built up and expanded.
If the market growth declines, then the task for the company is to use the freed-up capacities successively for other products through innovation. In order to compensate for the drop in prices of the products on the market and the rise in the cost of usage factors in the company, efficiency in the company is further improved by increasing productivity.
Business goal
The success of a business ultimately depends on the ability to conform to the course of a market, achieve and maintain superiority over the most important factors influencing costs before growth slows down. Business goals change accordingly. In successful business management, they are set in such a way that current and future measures are coordinated and a defensible competitive advantage is achieved.
During the development phase, the aim is to find an opportunity to enter a market by offering innovative products or services . If more and more customers are interested, then an attempt is made to meet the demand and to make a good deal. The success of a product is not hidden from other companies. They too will try to penetrate this market. In this phase, the goal is to build a strong competitive position. If the chances in the market gradually decrease, the time comes when the company has to be operationally strengthened through business process optimization.
Lasting success
Since every phase of business that is in line with the market has a different orientation and different goals, the skills required to run the business also change. The management within one of the four business phases requires different levels of success on the part of those responsible. The key point in creating these values is to gain a competitive advantage in each case, otherwise a more competent competitor will soon come and force the company out of its niche. Successful businesses are often founded by entrepreneurs or successful business areas in industrial companies by intrapreneurs , marketers (market-oriented executives) bring them to the growth phase, strategists lead them to success in competition and administrators make them efficient through rationalization.
scale
In every phase of business, the measure of success is related to the business goals. For the evaluation of a business success the standards change as the market matures. They are milestones on the way to market-compliant business success. The standards trigger adequate measures. This makes a vision consistent through to the sales-promoting influences (price, quality and service).
After a new business begins with something unique - be it a new product, a new service or a new customer benefit - innovation is the benchmark to be applied when it comes into being . With increasing market growth it is the sales growth and in the advantage phase then the competitive position . In the efficiency phase, the return on investment is ultimately the corresponding benchmark for the successful conformity of a business in a market.
Transition stations
Innovation in some form usually gives rise to a new business. The application reference and the - subjective - novelty for a user are characteristic properties of innovations. Its origin can be based on random and unconscious - entrepreneurial - intuition or on conscious and purposeful management activities, e.g. B. targeted research and development. The necessary skill for the transition from the creation of a business to the growth phase is the structure - thinking and acting like an entrepreneur (entrepreneurship or, in an industrial company, intrapreneurship). From the growth phase to the advantage phase, the required skill is to develop a relevant strategy to prevent competitors from gaining strength. When the advantage is then achieved, the focus is on operational management , with the task of running the operation systematically, methodically and rationally, i.e. H. to consolidate the business operationally and thus to increase the return on investment without further investments.
Changes in the influencing factors in competition and the reaction of competitors must be recognized in good time. In order to successfully manage the transition from one business phase to another, a competent company will change its value system in this period as required, i.e. H. Take on a new direction, set new goals, use new skills and set new standards.
Learning organization
The transition from one business phase to another requires an organization to adapt to changed circumstances. The closer an organization is to the success pattern of a business phase it has run through, the more difficult it is for it to accept the new direction and the associated goals, success qualities and standards of the next phase.
It is of great importance to competitiveness to anticipate the timing of the transition to the next phase in good time, develop a plan for the transition there and prepare employees for it. Lasting success in an industrial company depends not only on the professional management of an organization under defined framework conditions, but also on the ability of those responsible to plan, measure and regulate business processes in such a way that a vision is realized even under undefined framework conditions.
Value system
The totality of the orientations, goals, success qualities and standards represents the value system of an organization. It consists of the information that is collected on the basis of the respective orientations and recognized as relevant, the success criteria as a yardstick for the respective goals and that of remuneration and Promotion systems rewarded skills.
In part, the value system also represents the corporate culture and is reflected in the way a business is run. The necessity and urgency of throwing previously successful recipes overboard and revising a value system is often recognized too late. Out of the multitude of existing ideas in industrial companies, often only a few are developed into successful businesses. On the other hand, business can even grow from ideas to the point of bankruptcy ("Law of diminishing returns"), if management fails to achieve and maintain competitive advantages.
Success in a certain phase of a business process is a necessity for profitability or even survival, but it does not guarantee a smooth transition to the next phase. The more dominant a value system is during one phase, the more difficult the transition to the next becomes.
If the orientations, goals, success qualities and standards of a certain business phase become the prevailing values of a company, then there is a risk that the optimization of the transition to the next phase will be blocked, with the result that the transition from an expiring to a new market - i.e. . H. between the efficiency phase and the next innovation phase - there are enormous tensions.
Transitions
In order to be successful in a business conforming to a market trend, a qualified management must consciously control the transitions between the individual business phases. The transition to development - from the development phase to the growth phase - is generally carried out successfully thanks to the motivation and enthusiasm of those involved.
With the transition strategy - from the growth to the advantage phase - industrial organizations usually have the greatest difficulties. The internal problems of the operation (growth problems) can detract from the external opportunities of the market.
The transition from operational management - from the benefit phase to the efficiency phase - then usually runs relatively smoothly again. The previously loose organizational structure is more hierarchically shaped in this phase than before and is becoming more and more solid. The principle of "our way of doing business" is becoming more and more manifest (catalogs of measures become rules of thumb; rules of thumb become beliefs; beliefs become norms).
As a business matures and grows, the transitions between business phases not only become more difficult, but also riskier. This is particularly true at the end of a market's life for the transition to innovation - from the efficiency phase to the emergence of a new business; because efficiency tends to block innovation. However, innovation is the fourth transition skill required at the start of a new business process; H. to rejuvenate a business through mutation .
Business success
In order to be successful as an industrial company, it must be able to conduct successful business in a compliant manner over the life of a market. The value system in the organization must be transparent enough that it can be seen which phase a business is in, where it should be and what needs to change. While a current business is operating in a particular phase, the next phase must be clearly designed and a plan developed for the transition to it. Transitions between the business phases must be optimized as well as the processes within the business phases.
The scheduled transfer of a business from one business phase in line with the market to another requires careful preparation and the optimization of the transitions. Competitors in a market who do not recognize this or do not have the ability to do so are most likely to fall by the wayside when it comes to this requirement.
It is imperative that the leadership qualities in a business be adapted to the requirements of the respective business phase. In the market-compliant business phases, the management task is defined by clear orientations, goals, success qualities and standards. The successful transition from one phase to another depends on the opportunities in a market and the problems of a company. It requires an organization (process and structural organization) to learn new skills and to adapt to new circumstances, whereby the methods of project management offer great support.
See also
literature
- Ludwig Häusler: The PROTOP ® - Method: The successful way to more productivity and profit, 1999, Verlag modern industry ISBN 3-478-91960-6 .