Four Business Aspects

Business is all about ideas, risk, competition, profits and finally success. To manage and achieve success you have to use appropriate strategy and right tactics; you need to have unique business concept and a workable business model. Just look at these four aspects in detail below:

Business Concept

Business concept encompasses every business activity undertaken by an enterprise in creating value for customers, suppliers and other stakeholders. Business concept drives every functional area in a business to co-ordinate activities so that goals and objectives are achieved in an optimal fashion. Creating your business concept is the primary task.

Business Strategy

Business strategy is defined as “a well thought out long term plan incorporating chosen methods, moves or a series of maneuverers chalked out by business to achieve goals and objectives”. Strategy is perceived long-term, multi-dimensional, complex, and high-flown and having huge impact on business performance. It is the thinking part of the business process driven by the vision and mission giving direction and sense of purpose towards achieving business goals and objectives.

Business Model

Business Model is primarily “a business concept that has been put into practice”. It translates strategy of a business into a framework for action. Logic of a business, choices a business takes in creating, delivering and realizing value are shown in clear and concise manner in a business model. It is a road map, a motivator cum evaluator of business performance and a communicating tool of business purpose. It broadcasts to the outside world the distinct and discerning value proposition the business offers. More than that, business model bridges strategy with tactics. It displays tactical steps that could be taken by a business at any time to implement the business strategy.

Business Tactics

Business tactics are defined as “specific moves, manoeuvres and actions taken in isolation or as in a series by a business in order to move from one milepost to another in the pursuit of business strategy”. Tactics are short-term, linear with localised focus and having fairly limited impact on business performance. It is the action part of the business process; and symbolise movement towards mileposts within business objectives.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

 

Difference between Business Vision and Mission

In the board rooms of many companies the subject of business vision and mission is consigned to, as public relation or corporate communication exercise. What disturbs more is that these words are often used by board members to denote an aim without bothering about its nature and characteristics. Understanding differences between business vision and business mission is definitely a key to survival and success.

Vision

1. In vision a business speaks of its beliefs and values. You write a vision statement indicating the philosophy in which you work, the concepts that guide and the value judgement you make in progressing towards your ideals

2. Vision portrays the standard that is set for achieving over a period of time. In other words, business makes a choice that has long haul. Hence, the overtone of vision is aspiration and inspiration. A good example is the vision of NASA in space travel

3. A vision statement answers the questions “What to become or Where to go”. It seeks an end that business wishes to achieve at the end of its business cycle. In order to do that, a vision statement provides direction and guidance in brief manner but with broad intent

4. “Brevity is better part of valour” goes the adage. Vision does just that. Savour the vision of Department of Commerce of USA: “By assisting the private sector, our vision is that the United States continues to play a lead role in the world economy”. Do I need to say any more?

5. Vision is chiselled as policies of a business that govern the conduct of transactions in every circumstance. Such policies are of general nature and do not give facts and figures but ideas and concepts. In fact, vision is born out of conceptual thinking. This type of thinking trains you to spot the missing link or information that is needed to solve a puzzle. In a vision statement you are looking for an over-awning concept or all-prevailing idea in global manner.

6. Vision relates to goals of a business. That is to keep the big picture intact and behind your table so that you turn back and watch your vision and then watch your steps

7. Board of directors is entrusted with the formulation of vision and accompanying goals and policies. Being lofty in nature and broad in outlook and perhaps too distant to view analysts are prompted to dub vision as star in the sky.

Mission

1. In mission a business sounds its attitudes and behaviour. Hence, concrete steps are laid within a mission statement indicating the methodology in which you segment your work along functional lines so as to achieve the stated mission. Therefore a mission statement includes, but not limited to, the following components: Customers & market, Products & operation, Profits & growth, Survival & solvency, Customer relation, Employee relation and finally Research & development

2. Mission indicates the states that arise in aiming for the standard proclaimed previously in vision statement. Hence, mission deals with the consequences that could arise in implementing the choice made in a vision statement. Ostensibly, mission is set for short haul. Motivation acts as the overtone in a mission statement. A good example is the way CIA fights global terrorism

3. A mission statement answers the questions “How to get there”. It seeks the means to obtain the end conveyed earlier in the vision statement. Coaching and counselling are twin tools employed to prod employees to do every mission with dedication and satisfaction

4. Mission is much longer and wordy when it comes to the subject of communicating it. But, the key factor in a mission statement must be under-lined: comprehensiveness. Let us look at the mission of Department of Commerce of USA. “The Department creates the conditions for economic growth and opportunity by promoting innovation, entrepreneurship, competitiveness, and stewardship”. As you agree all these four aspects make USA a business giant

5. Mission is crafted as practical guidelines for the conduct of a business in every circumstance. Such practices are specific in nature and exhort employees to take actions now so that at the end of the day they know where and how they have progressed. Facts and figures accompany a mission statement. A mission statement is born out of contextual thinking. This type of thinking trains you to understand the context in which you are placed in carrying out your mission

6. Mission relates to objectives of a business. That is to keep the focus on the current matter on hand. This enables you in placing mission just in front of your table so that you can glance over it as you progress

7. Senior management is entrusted with the formulation of mission and accompanying objectives and procedures. Being mundane in nature and narrow in outlook and perhaps too close to view analysts are goaded to christen mission as the moon in the sky.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

 

Business Model: Pandora Jewellery

Pandora Jewellery with its logo statement “Unforgettable moments” displays a distinctive brand offering and a distinctive product range. Undoubtedly Pandora is one of the worlds’ recognised jewellery brands. A key reason for this success is the business concept that allows customers to design her article in unique, personalised and individualised style; this concept finds expression in its business model.

Founded in Copenhagen Denmark in 1982 by jewellery artist Per Enevoldsen and his wife Winnie in modest manner, Pandora (www.pandora.net) sells more than 6 billion Danish Kroner worth of jewellery pieces including charms, bracelets, rings, earrings, necklaces, pendants et cetera in exquisite designs. More than 10,000 outlets in about 65 countries cater to the sophisticated needs of women who love jewellery that tell a story. A work force of 5,300 people participates in this colossal and global enterprise guided by Allan Heighton Chairman of Board of Directors and Bjorn Gulden CEO and Henrik Holmark CFO.

Business Model

Pandora operates under a vertically integrated business model built literally and meaningfully around a forward looking pair of mission that offshoot from an ambitious yet achievable vision:

Vision: “to become the world’s most recognised jewellery brand”

Mission: 1. Offer women across the world a universe of high quality, hand-finished, modern and genuine jewellery products at affordable prices.

2. Develop jewellery portfolio in keeping with core values of affordable luxury, contemporary design and personal storytelling

Predictably, the business model speaks of the logic of a business in terms of creating value, delivering value and capturing value. Let us see how the business model of Pandora stands on these limbs.

Creating Value

Primary focus on creating value is design and product quality parameters. The business concept that consumer is allowed to morph her own design is the integral part woven into the system. This gives rise to expression of individualised and personalised product design cherished by the buyers. Nevertheless, pre-designed in-house jewellery articles continue to be the main stay of the product portfolio. Strict quality standards are enforced so that articles coming out of the manufacturing facilities chiefly located in Thailand conform to spotless product quality.

Delivering Value

Elements framed in connection with delivering value are shown below:

1. Product offering of charms, bracelets, rings, earrings, necklaces, pendants and watches are packaged into the business motto of unforgettable moments, so that women who wear a piece of Pandora has lingering thoughts of the one she has purchased

2. Broadening of jewellery portfolio through specialised collections. Some of these collections are noteworthy: Compose, LovePods and Liquid Silver launched in 2007, 2008 and 2009 respectively. The company envisages to launch potential collections captioned Moments and Stories both in existing and new markets shortly

3. Brand perception and promotion are finely balanced resulting in what we call as “brand consistency” that ultimately leads to customer loyalty and repeat purchases

4. Sales outlets either using franchises or direct operations are established in delivering the products. Out of these about 700 are termed as “concept shops” that account for about 43% of sales volume

5. Expansion of Pandora product range in existing and selected markets involves branded points of sale with a view to strengthen the perception of the brand by customers as well as to permit wide array of Pandora pieces

6. Expansion of Pandora products in new markets is tackled either serving them from existing outlets from nearby areas or setting-up branded sales outlets. Although most of these are to be directly operated, franchises would also be considered

7. Finally, customer loyalty is the ultimate component in the business model. Attracting and retaining customers takes place in multiple ways. Pandora Club and social network such as Facebook are chief among these methods.

Capturing Value

Revenue generation from operation has the following highlights:

1. Branded distribution is emphasised, consequently as per 2012 first quarter (1Q12) interim financial statement branded distribution accounts for three fourths of sales revenue

2. Direct distribution either using franchises or own operation is given pride of place; the figure of 96% of sales emanating from direct distribution in 1Q12 lends credence to this fact

3. A healthy net profit ratio is a must; for 1Q12 revenue is 1,424 million Danish Kroner and net profit is about 338 million Danish Kroner.

Integration

The business model of Pandora is integrated properly by linking with strategy and tactics. The company reports that feedback from major markets confirms that the strategy adopted by them is working successfully. Moreover, the recent stock re-balance in USA and UK as a tactical measure proves that business model allows leeway in handling operational issues and market challenges in cost effective manner.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

 

How to Create Your Business Concept

A business concept encompasses every business activity undertaken by an enterprise in creating value for customers, suppliers and other stakeholders. Therefore, business concept extend its arch from manufacturing a product to marketing it successfully in order to amass revenue; in similar vein business concept drives every functional area in a business to co-ordinate activities so that goals and objectives are achieved in an optimal fashion. Creating a business concept is an easy task if you adopt a step-by-step approach explained below:

1. Concept Initiation: Firstly, prepare the groundwork by stipulating your purpose and objectives in setting up a concept. Review both internal and external environment and look for clues as to how you can make progress, fix a problem and enhance your value chain. Assume you wish to maximize revenue by introducing a new product. Just check out whether it is an original one, a substitute for an existing product, improvement over what you already have in line or adaptation of a competitor’s product or just a re-make of a common item

2. Concept Generation: Get contribution from your staff, colleagues as regards to the findings or fine-tuning of concepts. Teamwork is better; you can invite participants to put it in writing or just allow them to think out loud. A brainstorm is a better way of garnering new concepts or new twists to a concept that is already known. Yet there is a caveat: never interrupt, rush to criticise neither scurry to cut it down. Generation of ideas could take place in two forms: in-box solutions that have had previous history of successful implementations or out-of-box solutions that originate with parameters un-known or not tested before. More is merrier when it comes to concept generation, as you have a wide selection to choose from

3. Concept Evaluation: The maxim is that every subjective or objective matter can be evaluated by setting norms and specifications. Therefore, concept evaluation cannot be an exception. In evaluating concepts, you go in quick steps through screening, scoring and testing processes. As you begin to screen, most, if not all, concepts would fall on the way side. If there is no viable option you have to brainstorm once again or chose an external adviser. If you have concepts worthy of further analysis you have to apply a scoring system in consultation with your team members. One such scoring system that is widely used is Pugh Matrix. It is an evaluation tool, where you presume a base case with score of 5 and rank the new concepts introduced by your team on the scale 1-5-9. Any concept that is worse than the base case is ticked 1, concepts equal to base case is marked 5 and the ones that are better than base case are scored 9. Thereafter, concepts with the score of 9 are zeroed in for preliminary testing. Once again, using objective standards, a dry test must be carried out so that you cherry pick about two to three concepts

4. Concept Selection: Hard thinking, minute analysis along with “what – if “scenario casts are made so that the chosen concepts could be put through baptism of fire. At this moment, you have to make a trade-off between internal capability and external opportunity, objective standards and subjective demands, theory and practice so that you strike a via-media. The concept that has the best line of fit is generally selected for further development

5. Concept Development: A task force is named and nominated to develop the selected concept. The members of the task force would be briefed in all areas of development including technical, technological, human side, operations, marketing and last but not least financial considerations. On the up-stream, concept development takes into account objectives, purposes and specifications; on the downstream it must address the needs of the ultimate users who seek value for money

6. Concept Validation: After developing a concept in full stream it must be subjected to internal and external validation. Internally it must conform to corporate belief system, shared culture and the obvious necessity to conform to internal standards covering sustainable profit for the business. External validation is via industry standards, B2B ethics, customer perception of quality and durability and overall market acceptance. A product concept might have made waves on the drawing board. Nonetheless it could prove to be a laggard in the market. Recent initial public issue of the Facebook suffered this fate. Even though the market is willing to absorb there is no internal validation of sound financial proof available. Technology guys have a red book on separating chaff from the grain: proof of concept

7. Concept Institution: By this time the business concept is created; it is understood and ready for installation. Lovingly it is named may be after the boss who started the ball rolling; finally it is institutionalized. In this context, the definition of concept stated by American philosopher and psychologist John Dewey may not be out of place. Just check this: “A concept is meaning sufficiently individualized to be directly grasped and readily used, and thus fixed by a word”.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/

 

Make your Business Idea a Success

Your business ideas are sparks of your studied imagination. You get a bright idea in your mind based on your experience and learning and from what you read and reflect upon about how others have gone through. You think your idea is really great. Having mulled it over, you feel that it can be translated into commercial success. But how you do that? It is simple follow the seven stages given here:

1. Write down your business idea in clear and concise English. Improve the draft once again. Check it up to see whether it makes sense to you and to an ordinary reader. Now your spark of imagination is transformed into a concrete idea

2. The second step is to morph your idea into a business concept. A business concept is defined as the result of organized thought of your business idea. It has several limbs structured into a useful form. Let me give an example: you draw few dots vertically or horizontally on a paper. When you link each dots you get a vertical or a horizontal line. In this case, dots are ideas; line is your concept. Typically a business concept has limbs such as profit motive, product as unique value proposition, how the product fits the market needs, how it performs against competition, the cost of product, its revenue generation and finally how it services your overhead and gives you profits. If you have a business concept developed then you will be able to take charge and influence the outcome of your efforts in a business because a well-designed business concept gives you direction, motivation and tenacity.

3. You must test your business concept to ensure whether it is feasible or not. Feasibility must be ascertained as against regulatory environment, economics, environmental issues, marketing parameters, financial viability, technological excellence and social acceptability

4. Once the feasibility is positive then you have to prepare a detailed proposal in the form of a business plan, bringing out details of all the functions of a business organization including corporate management, administration, marketing, production, finance and human resource into a cohesive entity to produce and sell your unique product

5. Guidelines are to be prepared in the next stage where policies and procedures for each department are developed in order to make the business as a going concern. Generally, a budget is drawn for each department and rolled over every year. Segmental plans in product development, market development and human resource development would be detailed. Your investment plan in physical assets and human resources is also dovetailed. Moreover the time and duration of each stage of the business development are also noted

6. Implementing your business plan is the next action step. When you do this invariably you will concentrate on business growth and development along with having safeguards to cover yourself from any eventuality

7. Monitoring progress and adjusting your budget, target, goals along with amending your plan is the seventh and final stage in making your business idea a successful one. As you reach this point you have become mature, experienced and skilled business person. You are ready to take your business to higher levels as you go on.

Muthu Ashraff

Business Adviser

Mobile : +94 777 265677

E-mail : cosmicgems@gmail.com

Web : http://www.cosmicgemslanka.com

Blog : http://cosmicgemslanka.com/blog/