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Tag: business strategy

  • Retrenchment Strategy: What Is It? | Types of Strategy | Companies That Employed It

    Businesses run on the three basics, Men, Money, and Machinery. If you are in a situation, facing loss. You will want to keep your head above the water. Devise a good strategy. Take some steps to look for what it is that has got your head into deep waters.

    What is it that has made you stand in this position of loss?

    You can analyze a lot of factors and make certain important decisions now.

    • What is it that you can let go of?
    • Is this important to you right now?
    • Can this help you improve?
    • Cutting this off will help you get out of this position?
    • Is it effective?

    How does an organization cut down costs and increase their revenue?

    Cutting down costs on activities that do not profit businesses means also cutting down the number of men in that sector. For example, if there is no longer a need for you as an organization to focus on the clerical department. You will have to eliminate the people working there, which will efficiently reduce the cost. It includes shrinking of a business or a part of it to enhance the overall performance.

    The decisions you make have to be realistic and achievable. So, Lets look at What is retrenchment strategy and the companies that employed the retrenchment strategy.

    Retrenchment Strategy – What is it, When is it employed and Why is it employed?
    Types of Retrenchment Strategy
    Pros and Cons of Retrenchment Startegy
    Companies That Employed the Retrenchment Strategy

    Retrenchment Business Strategy

    Retrenchment Strategy – What is it, When is it employed and Why is it employed?

    As it is a matter of finance, capital and investments are basic that let your organization keep going. Revising the basics: money, machinery, and men.

    So, What is a retrenchment strategy?

    The strategy includes the desertion of products and services that are no longer needed by the business.

    When is the retrenchment strategy employed?

    It is implemented when a company is facing financial issues. It is a corporate strategy, which is done by reducing an organization’s expenditure.

    Why is the retrenchment strategy employed?

    • To shift focus on activities from where revenue is generated and hence increase profits or simply because the operation, project, the service, product or the product line going on in the organization may not align with the core of the business.
    • To eliminate unnecessary costs that incur.
    • To ensure financial stability in the organization.

    Who employs the retrenchment strategy, and where is it used?

    The organizations use it on a linear or a collective basis. It is used in

    • Corporations
    • Startups
    • Companies
    • Businesses

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    Types of Retrenchment Strategy

    Retrenchment Strategy Types
    Retrenchment Strategy Types

    This is also applicable to line extensions, operations, and projects that are being carried out in your business. First, let’s take a look at the three main types of retrenchment strategies:

    1. Turnaround strategy

    It is also called management measurement. The turnaround strategy is used when a business wants to improve its performance and decrease negative trends.

    This strategy is used when the business might be facing:

    • A decline in the market shares.
    • Decrease in profits.
    • The issue of spending more money as an organization during a specified period.
    • Worsening debt-equity ratio.
    • Negative cash flow.
    • Decline in sales.

    2. Divestiture Strategy

    The divestiture strategy is adapted for when the turnaround strategy fails to yield results for a business. The divestment strategy analysis mainly the profit and profile factor. In an organization, the departments, products, services, or divisions are analyzed. Keeping in mind one question: Does this profit us? If not, then the company will let go of it.

    This strategy is used when the company might be facing problems like:

    • Not being able to keep up with the competition in the market.
    • Facing negative cash flows.
    • The business started or acquired does not match the core values of the company.
    • When a tech upgrade is needed and the company is unable to do so.
    • It is struggling to survive.
    • The company might be running a business that is not profitable to the company.

    3. Liquidation Strategy

    This is the arrival of a business at its last stage. When no other options are available, the company sells all of its assets. As ugly as it might be, it involves total shutdown of a firm and will attract negative reactions as it also leads to consequences majorly including unemployment, of the people who worked there. Which also creates a bad reputation for the company.

    To understand this more clearly, let’s take the Tata group as an example. It is a highly diversified entity with a range of businesses under its umbrella. A lot of which did not align with the identity of their core business.

    The businesses that Tata ran for a specified time were soaps, detergents, pharmaceutical companies, and cosmetics. All of which were identified as non-core by the Tata group.

    • TOMCO (Tata Oil Mills Company) was divested and sold to Hindustan Lever Limited. The company was sold to Hindustan Lever, as it was non-competitive and would have required substantial investment for them to sustain it.
    • Tata’s Merind were divested to Wockhardt.

    Adapting a retrenchment strategy might also be a company’s response to a significant reduction in demand for the product, product line, or the service it provides. Which would also include dropping off from the market.

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    Pros and Cons of Retrenchment Strategy

    Here are the Pros and Cons of Retrenchment Strategy:

    Pros

    • It can layer, simplify, and flatten the organization’s structure.
    • Prove, cost-efficient, and improve performance.

    Cons

    • It will create a negative image and reputation of a company.
    • Criticism and backlash from society.

    Companies That Employed the Retrenchment Strategy

    A list of 10 organizations that have adopted the retrenchment strategy for various reasons, overall enhancement and to run the organizations in their companies efficiently are:

    1. Tata Group
    2. Infosys Ltd.
    3. Wipro Ltd.
    4. Tech Mahindra Ltd.
    5. HCL Technologies Ltd.
    6. Cognizant Technology Solutions Corp.
    7. Capgemini
    8. Air India
    9. Dell
    10. Ford

    FAQs

    What is a retrenchment Strategy?

    A retrenchment strategy is a business strategy that includes the desertion of products and services that are no longer needed by the business.

    What is a retrenchment turnaround strategy?

    A retrenchment strategy is when an organization feels that the decision made earlier is wrong and needs to be undone.

    What are the three retrenchment strategies?

    The three types of retrenchment strategies are:

    • Turnaround strategy
    • Divestiture strategy
    • Liquidation strategy

    What are retrenchment strategy examples?

    Some of the examples of a Retrenchment Strategy are:

    • Selling Assets
    • Abandoning Markets
    • Decreasing Production
    • Downsizing
    • Outsourcing

  • How to Promote your Business Online in 2021 (7 Effective Ways)

    For any business to grow, certain marketing strategies are required. These strategies when combined help in the promotion of the business. Among these, the most important strategy for any business is to gather more and more customers and expand their business on a larger scale.

    However, sometimes businesses fail or face major losses during their business hours. And that’s why it’s very important to know what are the right steps and strategies that can help you in the promotion of your business, especially in the year 2021 when there is abundant competition in the market. And that’s what we’ll be discussing in this article!

    When we look at the old data and planning’s, the advertising and promotions of any business were done through a brochure, flyer, advertisements in a local newspaper or postcard. But these required some extra budgets which always hurt the businessmen.

    But with the evolving technology, today, there are numerous ways to advertise and promote any business, whether it’s small, medium or big.

    In this article, we will discuss the top effective ways to promote and market your business in 2021. So, let’s get started!

    Google advertising (PPC)
    Joint Ventures
    Social Media Influencers
    Email Marketing
    Social Media Advertising
    Video Marketing
    Print Media Advertising
    FAQ

    Google advertising (PPC)

    Google Ads
    Google Ads

    One of the most effective ways to promote any business is through Google Ads which is broadly referred to as Pay Per Click. Google is widely known as the advertising platform as around 85% of its total revenue comes from the Google Ads platform. Google is expanding with great numbers and has had an uprising graph for many years.

    Pay Per Click is very beneficial and the most amazing part on advertising on Google is you have to pay only when someone clicks your ads. You can set the cost according to you and can organise many niche campaigns based on the interest of buyers. Pay Per Click is an amazing as well as affordable marketing strategy that attracts a huge audience.

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    Joint Ventures

    In order to promote any business, you need to focus on the right people and getting your offers in front of these. Joint Ventures are the best way to achieve that! Through this, you can easily gather the existing audiences that surely match your standard market.

    Joint Venture can be elaborated as partnering with the non-competing companies who have the same target audience as yours. Joint Ventures also helps in creating brand recognition and sales. You just need to find the appropriate service which can add value to your customers more promptly and also, helps them.

    Social Media Influencers

    In today’s time, Influencers have become an important marketing strategy for many businesses. And marketing through people with tons of fan following is always a win. With Influencers, you can build a strong uprising position in the market and enhance brand recognition among the audiences.

    These Influencers are effective and charge per post based on their followers count. But this always brings you benefits on a larger scale. That’s why investing in these Influencers can bring you great results.

    Email Marketing

    Email Marketing
    Email Marketing

    Email Marketing is counted in the section of broader marketing. As it helps you reach the audience in a planned and effective manner. Email marketing should be must in your marketing strategy.

    However, the percentage of opening emails have dropped majorly but still, when a productive mail is sent to the consumer, there are fair chances they will get ahead with it.

    Also, Email Marketing helps in making your product and services of the utmost choice for the audience. Also, Email Marketing helps in making your product and services of the utmost choice for the audience. Zomato and Swiggy are the few brands that effectively employ email marketing to market their brand. You can also use email marketing automation tools to automate your emails.

    Social Media Advertising

    Social media has become an integral part of our day to day life and for businesses, it’s a great place to promote their business. Today, every social media platform provides a service for businesses to advertise their products and services. And because of this, the audience has become habitual of seeing ads on their social media.

    Ever since Facebook launched its “Facebook lead Ads” tool, businesses have become more effective in reaching their target audience. Through Social Media Advertising, you can spread awareness of your brand as well as promote your business, effectively. You can also promote your business using Instagram, Pinterest or LinkedIn ads.

    Video Marketing

    A study has concluded that around 80% of the people between the age group of 18 to 49 years old prefer video content on platforms like YouTube. This clearly states that YouTube is the biggest and most popular video platform to advertise your product.

    With these statistics, it’s likely to say that advertising through video content is one of the best ways to effectively promote your business. This brings out more customer engagement in your business.

    What you can do is create a YouTube channel based on your company and upload engaging video content. Videos hold the power to enlighten, promote and maintain a connection with the existing customers as well as creating new connections with audiences.

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    Print Advertising
    Print Advertising

    For a very long time, Print Media Advertising has been nurturing and promoting businesses. And today also, this is counted among one of the effective marketing strategies. However, the number of audiences may have dropped in Print Media Advertising but still, it’s a great way to reach out to the conventional portion of audiences. Print Media Advertising and direct mail, two are counted in the list of most powerful and effective marketing strategies for any business.

    Conclusion

    In order to survive in this competitive marketplace, businesses need to have well-planned marketing or promoting strategies. Business promotion is more of a necessity for any business, as it encourages them to be distinct and charm their customers. And that’s what we attempted to describe in this article.

    Even during the pandemic, businesses made their way through online channels. And now, the audience has become so habitual of these that they always seek more services and products ads on the internet.

    Stay tuned for more such articles!

    FAQ

    How to promote your business in 2021?

    Paid traffic from Facebook, YouTube ads, Google ads, Pinterest ads, Instagram ads are some of the ways to promote your business in 2021.

    How to advertise for free?

    Actively promote your brand on social media, Start a blog, and Press releases are some of the great ways to advertise your brand for free.

    Are Google Ads Free?

    You only have to pay for Google Ads when someone clicks on your ad.

  • All About Defensive Marketing (With Examples)

    There are four main types of marketing techniques that are being commonly applied these days – offensive marketing, defensive marketing, guerilla marketing, and flanking marketing. Among these, defensive marketing is known to be the most revered one due to the low risks attached to it. Read on to know everything about defensive marketing and some well-known examples too!

    What is Defensive Marketing?
    Top 3 Types of Defensive Marketing
    Pros and Cons of Defensive Marketing
    FAQ

    What is Defensive Marketing?

    As the name suggests, defensive marketing incorporates a protective approach towards the consumers, irrespective of the skyrocketing competition. Once this mode is put into practice, much of the experimentation processes come to a halt. It is essential to understand that the company’s actual “defense” is regarding its position in the market, not the products sold.

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    Top 3 Types of Defensive Marketing

    The following three types are the best way to provide a deep insight into the core aspects of defensive marketing. Whichever form is applied, the test remains the same – the status of the company should not be degraded due to fluctuations in the market. This categorization is solely based on the means applied. They can be applied individually as well, based on the needs.

    Position Defense

    The existing position of the respective company in the market is to be maintained at any cost. One of the most important strategies applied is the deepening of all old bonds catering to customer satisfaction. This one is more prone to be the victim of offensive players.

    Mostly, a single best-selling product is set as the focus. Accordingly, other parameters are modified to suit the economic conditions while building the brand name continuously.

    Example of Position Defense

    The automobile giant Mercedes prefers to stick to the same routine, irrespective of similar attempts being made by Toyota.

    On the other hand, Apple does not focus on increasing the RAM of iOS devices by copying other brands. This helps the tech-savvy people rely on the quality.

    Ultimately, the standards remain high and the position does not plummet at all.

    Mobile Defense

    A lot of changes are made in the direction of “not losing the current position”. The steps taken are mostly for backing up the company so that the diversity in products helps in compensating at all levels. The changes include broadening the target market, enhancing promotional mechanisms, adding more products to the catalog, and altering market segments each time.

    Example of Mobile Defense

    The widely known Indian Tobacco Company (popularly abbreviated as ITC) forms the best example for this category of developmental defense marketing. ITC has spread its scope to food ventures (the daily essential Aashirvaad wheat), and other significant commodities. Agribusiness is also a new inclusion, leading to even more profits with the increase in demand.

    Counter-Offensive Defense

    It is not just an exclusive type of marketing, but also another way of promoting defensive strategies. The simplest way to defend the position is to nullify the various downgrading attempts made by attacking companies. Mainly, the attack is dodged in such a way that it turns beneficial for the recipient company. Prices are reduced and products are improved.

    Example of Counter-Offensive Defense

    Almost all beauty brands have incorporated organic products in order to suppress the increasing popularity of purely organic brands. This increases the range and helps them grow at the same time. If the organic companies begin including synthesized products to tackle this attack, this would be regarded as a counter-offensive move in the direction of probable profits.

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    Pros and Cons of Defensive Marketing

    Pros of Defensive Marketing

    • The quality is top-notch due to reduced modifications.
    • Customer satisfaction is ensured at all levels.
    • The scope of devaluation is increased.

    Cons of Defensive Marketing

    Conclusion

    Now the doubt is – how is it a breakthrough? In such uncertain times, taking calculated risks has become the new norm. In other words, defensive marketing is an apt real-life depiction of how an investor or strategist looks before leaping. It is widely believed that this type of marketing is widely being used to balance the economy and maintain the flow of incoming ideas.

    FAQ

    What is the difference between defensive marketing and offensive marketing?

    In defensive marketing, the organization focuses on its own betterment while offensive marketing techniques are driven by downgrading principles.

    The trends can be easily identified through a budget decline, use of media in promotions, propagation of defensive newsletters, and much more. These trends help in further streamlining the strategies so that the past mistakes do not overpower the sudden change in marketing technique.

    What are the top strategies useful in the implementation of defensive marketing?

    There are five Ps that make defensive marketing successful – pricing, partial distribution, product improvement, prudent advertisement, and the powerful awakening of the market. They help in managing even the most obsolete brands and making them shine in no time.

  • Success Story Of Cornitos: From Mexico To India With Passion

    The evening tea, without snacks, sounds incomplete in a typical Indian household. A snack between meals to calm our hunger down, to keep the mind sane is also important. Basically, snacks are quite a significant part of our life. Over that, if it’s healthy, then it becomes the cherry on top of a cake. One food brand in India has been able to be that cherry. The beginning of that brand itself is an interesting tale. Here’s the success story of the biggest nacho brand in India – Cornitos.

    Let me tell you the story, where a single trip to the U.S. brings a revolution in the snacking industry of India.

    “Everything begins with an idea.”

    -Earl Nightingale

    Cornitos: The Beginning
    What Makes Cornitos Different than other snacks?
    Cornitos Flavors That Has Enchanted The Taste Buds Of Indians
    Products offered by Cornitos
    Target Audience of Cornitos
    The Rise of Cornitos
    Challenges faced due to Covid-19 by Cornitos
    FAQ

    Cornitos: The Beginning

    Cornitos first came into existence in the year 2009 with an investment of just ₹25 Crore. The actual journey started when Vikram Agarwal tasted tortilla chips for the first time in his business trip to USA. Tortilla chips a.k.a nachos are triangle-shaped Mexican snack that is made of corn and are either fried or baked. Inspired by popular Tortilla chip brand Doritos from the USA, Vikram Agarwal decided to start his own Indian Nachos brand.

    In India, where potato chips and traditional Namkeen’s rule the market, it is not an easy job to introduce a complete new form of snack item. Vikram Agarwal took that brave decision to introduce the Mexican food item in the Indian snacking industry. He believed, it will be able to penetrate the market, and thus shares his idea with his father.

    The prior experience of 20 years, handling family business was quite a help for Mr. Agarwal in starting Cornitos. After getting nod from his father, in 2009 he set up Greendot Health Foods Pvt Ltd in Faridabad, and step his foot in the Indian snack market with Cornitos.

    What Makes Cornitos Different from other snacks?

    The Mexican food item has able to entice people because of different reasons. They are:

    1. The cute triangle-shaped snacks are made according to the Indian taste buds and are healthy as well.

    2. Yes, the nacho crisps are made of corns, cooked with less oil and has zero Trans-fat and zero cholesterol.

    3. Not only that, they are also gluten-free and are available in 15 different flavors. Pretty much to choose from.

    4. Cornitos has its main factory located in Roorkee, Uttarakhand. The manufacturing plant for the Nacho brand is fully-automated, which means completely secured from human touch.

    Flavors of Cornitos that Has Enchanted The Taste Buds Of Indians

    The taste of Mexico in India is found in the 15 different flavors of this Nacho brand.

    • Quinoa
    • Melange
    • Beetroot
    • Spinach
    • Cheese & Herbs
    • Sizzlin Jalapeno
    • Tomato Mexicana
    • Peri Peri
    • Barbeque
    • Tikka Masala
    • Sour Cream & Onion
    • Sea Salt
    • Sweet Chili
    • Lime & Mint
    • Wasabi

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    Products offered by Cornitos

    Although the journey first began with just Nacho chips, the company started experimenting with different products in no-time. The numerous products offered by Cornitos are:

    • Nachos Crisps
    • Taco Shell
    • Dips
    • Mexican Delights
    • Tortilla Wraps
    • Nuts & Seeds
    • DIY Kits

    Target Audience of Cornitos

    At first Cornitos decided to target the younger generation who are a little bit health-conscious and tried to cater their needs. Interestingly, now the older generations are also taking a kind liking towards the products of Cornitos. This brand mostly serves people from medium-income groups and Urban areas. Cornitos are exported globally and can be found in USA, China, Hong Kong, Singapore, Taiwan, Thailand, Saudi Arabia, Pakistan, Sri Lanka and others.

    The Rise of Cornitos

    As mentioned before, it was not an easy job to penetrate the market, where popular snack brands have already established a name. At first it was quite a challenge to turn on the demand switch of customers for Cornitos. At that time nachos was, not that famous of a snack item in India. Therefore, it has to pull its socks up, to create a stance in the snack market of India.

    The company realizes to make it attractive to the consumers, it has to change. Although it was a risky gamble, to make it look like an international brand, the entire packaging of Cornitos was changed in 2011.

    From logo to color even the packaging got transferred to matte finish from glossy paper. Intriguingly, the new packaging strategy worked and it started making a place in the hearts of Indians.

    Cornitos Packaging
    Cornitos Packaging

    Cornitos has tied with different airlines like IndiGo, Spice Jet, Jet Airways and Air Asia. Not only that, it has tied with multiplexes like, PVR and Inox and other café outlets. Apart from that Cornitos are found in retail stores like, Big Bazaar, Spencers, and More.

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    Challenges faced due to Covid-19 by Cornitos

    Sadly, the struggling days for Cornitos returned, when the whole world was struck down by the Covid-19 Pandemic. Just like many other brands, the sales of Cornitos got affected as well. For a long time Cornitos was available in BigBasket, Amazon, Grofers, and Flipkart but not so surprisingly, the lockdown created quite a big challenge for the company. The supply chain was disrupted, which resulted in the decline of sales.

    Cornitos on the other hand, didn’t give up, after the first lockdown it decided to launch its own online website. To make it easy for the customers to buy the product, all of Cornitos products are available in the website. With cashless payments and contactless delivery, all safety precautions were taken to satisfy the customers.

    Cornitos Website
    Cornitos Website

    Did You Know?

    • Cornitos was awarded The Economic Times Best Brands 2020 award.
    • Cornitos offers no garlic and no onion snacks.

    Conclusion

    To start with something new in a complete different market is truly a brave decision. The taste of Mexico with an Indian twist was served to the mass and like a good epilogue of a story, the mass has accepted it. With numerous twists and turn Cornitos has emerged into India’s biggest nachos brand and has capture over 60% of the market as of 2019. One single idea can create a whole new world.

    FAQ

    What is the revenue Of Cornitos?

    As of the financial year 2021, Cornitos have the revenue of ₹85 crore.

    Who Is The Owner Of Cornitos?

    Vikram Agarwal is the owner of Cornitos.

    Is Cornitos an Indian brand?

    Yes, Cornitos is made in India and takes the pride to call itself the biggest nachos brand of the country.

  • 8 Reasons Why You Need a Business Coach

    Businesses are guided by business coaches, who help owners clarify their vision and determine how it aligns with personal goals. As a result of business coaching, the business owner can take their business from where it is now to where they want it to be in the future.

    Coaching and mentoring are often confused because both roles rely on the years of experience of their respective practitioners. Most importantly, a mentor focuses on advice, while a coach assists the business owner in setting goals and holding them accountable so that they achieve their objectives.

    After introducing business coaching, 96 percent of organizations reported individual performance improvements, according to a study by management consultants Korn Ferry International More than 92 percent of respondents said their leadership and management abilities had improved.

    Owner Accountability is created by Business coaches
    Business Coaches help you identify your blind spots
    Plans that can be put into action are created by Business coaches
    Business coaches guide you to the Right path
    Business Coaches help you obtain venture capital funding for your business
    Business Cocahes help you scale your business
    Business Coaches help you fill in the knowledge gaps
    Business Coaches assist you in overcoming obstacles and achieving your goals
    FAQ

    Owner Accountability is created by Business Coaches

    Holding yourself accountable is a key component of business coaching. However, a consultant and a business coach are not the same things. A business coach is different from a consultant in that they are not paid for their services. However, they won’t do any of the work for you in your company.

    They are there to keep you focused on the end goal and to remind you of why it is important to achieve it. To keep your commitments, they will encourage you. If needed, they’ll act as a sounding board for ideas and point out your business and personal blind spots.

    Business Coaches help you identify your blind spots

    Good business coaches can help you identify your blind spots and help you overcome them. It’s easy for entrepreneurs to get bogged down in the minutiae of their business and lose sight of the big picture.

    A business coach makes several insightful observations about the brand and operations that you might have never considered before. For finding a business coach, it is recommended to use your network.

    Plans that can be put into action are created by Business Coaches

    Active business owners want to know what their motivations are for setting and achieving business growth goals. A company’s owners are ultimately responsible for the speed and passion with which a goal is achieved (if ever).

    No burning reason exists for achieving a business goal if it is not tied to the business owner’s dreams, goals, and plans for himself or herself.

    An owner’s vision of where they want to take their business is clarified, and coaching helps them plan and prioritize goals and strategies that will help them get closer to their desired outcome.

    Coaches assist owners in determining their goals and creating a road map to reach them, according to the company. Owners can benefit from their perspective on the business by identifying which items are merely tasks and which are long-term objectives.

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    Business coaches guide you to the Right path

    If you’re not sure where you’re going in business, a business coach can be your compass. The results you get from even small changes in your direction over time can be dramatic. When running a business, it’s easy to get caught up in the day-to-day.

    To ensure that you are on the right track, a business coach acts as an objective third party who regularly checks in.

    Business Coaches help you obtain Venture Capital funding for your Business

    To convince investors of the value of your business, a business coach can help you develop communication and negotiation strategies.

    When it comes to this type of financing, a business coach can help you identify your company’s growth potential and develop your skills. You can also talk to a business coach about alternative sources of funding, such as grants or crowdfunds.

    Business Coaches help you scale your Business

    As an example, a business coach could help you choose the right business structure, write a business plan, or start a home-based enterprise.

    You may become overwhelmed as your business grows. While you may be aware that there are many systems that you’d like to streamline or improve, you’re not sure where to begin the process.

    As a result of their unbiased viewpoint, a business coach can help you devise procedures to increase productivity and reduce stress.

    Business Coaches help you fill in the knowledge gaps

    The fact that you don’t know what you don’t know is often the biggest roadblock to success. No amount of Googling will help solve a problem that you aren’t sure how to express or anticipate. Many of my successes can be directly attributed to what you’ve learned from business coaches over the years.

    Investing in oneself should be always your priority. Business coaches are excellent accountability partners who can help you learn, grow, and evolve as a person.

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    Business Coaches assist you in overcoming obstacles and achieving your goals

    Self-investment is one of the best investments that you can ever make. Having a business coach is an invaluable asset if you are struggling in your career, want to increase sales, or want to improve your business relationships.

    When you have a coach or mentor, they can help you navigate through challenges and achieve your personal goals. Through a mentor who has achieved what I hope to in the future, and by avoiding his mistakes in his professional life, you can accelerate your growth.

    Conclusion

    Finding a business coach who is a good fit for you is the next step if you’ve decided to work with a business coach. Consider asking your network for referrals as a first step in the hiring process.

    Always keep in mind that every business is unique and that a business coach who worked wonders for one entrepreneur may not be the best fit for yours! If your network is unable to provide you with any referrals, begin your search online.

    Verify the business coach’s experience before hiring. Working with a business coach is ultimately up to you. In either case, you should rely on your judgment. After all, you are the one who best understands your business and its needs!

    FAQ

    What do you use a business coach for?

    Business Coach can help you make better decision and set better goals for your business.

    Is having a business coach worth it?

    Yes, if you find a good business coach they can help you drive your business to success.

    Who are the best business coaches?

    Barry Moltz, Tammy Adams, John Mattone, Steve Mitten and Marshall Goldsmith are some of the best business coaches.

  • Strategizing Your Pricing – An Overview

    The price of a product is in fact the exchange value that we assign for a particular product or a service. It is in fact the only element of marketing that has a direct impact on the income of the company. This is the main reason why our pricing strategies should be accurate and apt because otherwise, the consequences will be disastrous.

    The price of a product plays a very important role in the market of commodities and branded products. When we look at the marketing trends over the years we can observe that pricing strategies have taken up a central stage over product, promotion and packaging.

    Today all of them are significantly influenced by pricing strategies. This article discusses different types of pricing strategies that companies can adopt depending on the nature and vision of the firm.

    Economy Pricing
    Price Skimming
    Psychological Pricing
    Pricing Variations
    Product Line Pricing
    Penetration Pricing
    Demand Pricing
    Cost – Plus Pricing
    Premium Pricing
    FAQ

    Economy Pricing

    This pricing strategy revolves around the idea of keeping your price deliberately low. Here you will be bringing down the price of a product so that it will be chosen more by the customers.

    However, one thing that you need to be careful about when you go for economic pricing is to make sure that the position the product will have in the marketplace is already predetermined. It should not create a perception among the consumers that something is being compromised.

    Also, be aware that economic pricing can also lead to a situation where your competitors will also do the same and the consumers end up choosing the most convenient one which will leave you in a very disadvantaged situation in case there are better-established products than yours.

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    Price Skimming

    Price Skimming is a very common strategy used by the pioneers in the market. This is because they have a great competitive advantage. Here, they raise the price of a product to avail maximum revenue in a short span of time.

    Since the customers perceive the value of the product due to the utility it offers and the lack of other options, these products will be sold even at high prices. And as other people and companies enter the market with better products and added features the price of the products as a whole is reduced.

    Here there is an immense advantage for the early bird companies because by the time the product’s prices start to reduce, the early one would have already made a significant profit.

    Psychological Pricing

    It is one of the most common pricing strategies that businesses use to pitch their prices. In this case, the emotional element of customers is tapped to get an ideal response from their side.

    They are more prevalent in the consumer market than the industrial market. It is governed by the practical understanding that a consumer is more likely to buy a product if it is priced at Rs. 99 than at Rs. 100.

    Another way in which psychological pricing is done by making inconspicuous changes in the product without changing the price. We had a popular chocolate company that kept reducing the thickness of the chocolate bar without increasing the price.

    Pricing Variations

    This is a strategy used by companies to price their products in a variety of ways – like early booking, group discounts, stand by prices etc. It is done based on the demand for a product during different times or situations. For example, we have the ticket prices of long route private buses arranged in this manner. This method is also known as off-peak pricing.

    Product Line Pricing

    In this method, goods and services are separated to fit into various cost categories. The goal is to reap maximum profit by appropriating the product to fit into all price ranges and to expand the consumer base.

    The products at each level are slightly different in their features and prices. Obviously, the product with the most features will be at the top of the pricing range.

    Such a strategy will also enable the customer to choose the product range that fits their needs. This is a very common strategy that we witness when it comes to data plans, antivirus plans, OTT subscriptions etc.

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    Penetration Pricing

    It is a very strategic pricing technique where you keep the price of the product really low. It also ensures that competition is checked. Because, if you are entering the market with a very low price, it means that any company that is entering the market later will have to lower their prices further to sustain, which is definitely not a practical option for them.

    In a way, this strategy is a deterrent to competition. After a safe consumer base is established, the prices are slowly moved on to a higher end.

    Demand Pricing

    As the name says, demand pricing is based on the demand for the product. Here the consumer demand pertaining to a product, service or consumer is the major factor that determines its price. It is also known as dynamic pricing.

    The perceived value of a product or a service serves as a foundation for such a form of pricing. It is also subjected to change depending on various factors like weather, the season of festivals etc which has a direct effect on the demand.

    Cost – Plus Pricing

    Cost-plus pricing is one of the most logical ways of setting pricing as far as the cost involved is concerned. Here the price is determined based on the cost of raw materials as well as the cost of production. It is further added with overhead costs and profit margin. It is a definite way to gain profit because as long as your cost and sales are accurately calculated profit is assured.

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    Premium Pricing

    It is one of the most valued pricing strategies by both customers and producers. Here the quality of the product takes the front seat. They use a higher price but ensure that the product delivered is of premium quality in itself. And building up value is a very important prerequisite of such a form of pricing.

    The product is marketed in such a way that it will equip the customer with a plethora of technical characteristics of the purchase to make them feel that the product is worth the money.

    In fact, pitching the product is equal to making a buying decision for the buyer so that it is easier for them to say yes. This is because customers tend to equate quality with higher pricing.

    The pricing strategies of companies like Apple and Jaguar are clearly based on this notion of premium.

    Conclusion

    Pricing strategies as mentioned in the beginning is very subjective. It depends on various factors like the nature of your company, your vision, the nature of competitors, the future of the industry in which the product belongs and so on. In some cases, you might have to blend into market requirements to not incur losses.

    However, the pricing strategies that consider the cost involved as the most important element of determining prices definitely gives you a sense of assurance. While different strategies have their own pros and cons each business should be able to narrow down to one or a mix of multiple pricing strategies for their own benefits.

    FAQ

    What factors go into pricing a product?

    Pricing your product usually involves considering certain factors, like pinpointing your target customer, tracking how much competitors are charging, and understanding the relationship between quality and price.

    What is the best pricing strategy?

    Competition-based pricing, Cost-plus pricing, Dynamic pricing, Penetration pricing, and Price skimming are some of the best pricing strategies used by businesses.

    How much profit should you make on a product?

    As a general rule of thumb, a 10% net profit margin is considered average.

  • Uber Business model: A Deep Dive into the Strategy and Innovation of Uber

    Did you know 17% of small businesses fail because they lack a business model? Entrepreneurs now are the time to learn about this amazing business model canvas, which will make that stress go away. Here, I have taken the real-life example of Uber for this business model canvas.

    About Uber
    Uber statistics in 2021
    Uber’s Business model canvas
    FAQ

    Brief introduction of Business model canvas

    A lean canvas and a value proposition are two sorts of business models. These are tools for validating company concepts geared for startups. Both originate from Alexander Osterwalder’s ‘business model canvas,’ which we’ll explore today.

    The primary distinction between the business model canvas and the lean canvas is that the business model canvas was developed for well-established businesses to track their efficiency and evolution through time. Startups are the most common users of lean Canvas for product launches.

    The business model canvas is popular among entrepreneurs. It’s a risk-detection tool that’s adaptable, intuitive, and value-driven. That’s why it’s commonly referred to as a one-page business plan. The canvas is divided into nine areas, each of which must be filled with specific company information.

    About Uber

    In the business realm, Uber is a well-known name. Millions of business owners and entrepreneurs have been motivated by extraordinary success, and the trend is expected to continue. This California-based ride-hailing service, which was founded in 2009, has ushered in a huge change by igniting the on-demand economy.

    From its humble beginnings, it has come a long way from a basic idea of allowing customers to hail a cab with a single tap to being the world’s largest ride-sharing firm. Uber currently controls over 68% of the total ridesharing market in the United States.

    Uber statistics in 2021

    According to statistics, Uber undertakes around 1.44 billion rides each quarter. Uber has raised $25.2 billion in fundraising, has over 100 million active customers, 4 million Uber drivers, and a net worth of $95.67 billion. So far, Uber’s success has inspired millions of business owners and entrepreneurs.

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    Uber’s Business model canvas

    The aggregator business model was first introduced to the world by Uber. It operates on a multi-sided platform business strategy that serves as a link between riders and drivers. Simply put, Uber has a two-pronged business model. While it enables clients to hire a taxi with a simple click, it also enables cab drivers to complete their rides on time and safely.

    Customer segments

    You must determine your most significant customer to whom you are providing value. The persona method aids in the creation of an imaginative portrayal of user categories. There are two types of Uber users: drivers and riders. Each one caters to a specific group of people that are interested in what Uber has to offer.

    The first group i.e. drivers are:

    • Full-time job seekers
    • Generate extra income
    • Love to drive
    • Looking for a flexible work environment

    The second group i.e. Users are:

    • Don’t own cars
    • Don’t know how to drive
    • Looking for comfort & luxury
    • Looking for cost-effective transportation services
    • Taxi haters
    • Travelers in a foreign place

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    Value proposition

    Each persona has unique challenges or prerequisites that your product or service can address, and you must specify these in the value proposition section. List as many jobs as feasible that correspond to the needs of your target customer segments.

    For drivers, it’s the ability to work flexible hours and earn more money, while for passengers, it’s the ability to pay with credit cards and cheaper prices. Decompose this part into specific chores to be done, customer pains and gains, and relate them to your product value using the value proposition canvas.

    Value proposition or benefits Uber offers are:

    To drivers:

    • Ease in getting started
    • Opportunity to earn
    • Ease in accessing more passengers
    • Flexible working schedules
    • Get paid online

    To customers:

    • Minimum waiting time
    • Reduced transportation costs
    • Cashless rides
    • Safety & security
    • Upfront pricing

    Channel

    The communication unit that entrepreneurs use to contact customer segments is referred to as a channel. If you offer your products through a website, that is one of your business model canvas channels. Search engines, social media, and even word-of-mouth marketing are examples of this.

    Uber’s channels include:

    • Website
    • Smartphone app (android & IOS)
    • Social media
    • Google Adwords
    • Media coverage
    • Word of mouth

    Relationship with customers

    The way you interact with customers is defined in this section. Customer interactions included follow-up and feedback after the sale. If you connect with users through a call center or a Chabot, specify it here.

    Uber maintains its customer relationship through:

    • Social media
    • Customer support
    • Rating, reviews & feedback system

    Revenue streams

    You must define the methods by which your company obtains funds in the revenue streams section. They’re usually derived from customer segmentation and value proposition mapping. Uber passengers, for example, use their credit cards to pay for their rides. Uber makes money by charging a commission for each ride. Other revenue streams could include billable add-ons, subscriptions, premium accounts, and so on.

    Uber’s revenue streams are:

    • Car rides per km/mile basis
    • Surge pricing
    • Brands like Uber X, SUV, etc.
    • Divisions like Uber Eats, etc.
    • Advertising & marketing

    Key activities

    Now comes the difficult part, key activities cover everything you need to do to make your company work with digital products. This entails continuous product development and marketing. Recruiting, advertising and other such activities are part of these operations.

    If you provide certain services, this may include information that can help you improve your capabilities. When filling the key activities portion of the business model canvas, keep in mind the other sections you’ve already completed.

    Uber’s key activities are:

    • Platform development & enhancement
    • Marketing & customer acquisition
    • Sales promotion
    • Hiring drivers
    • Customer support
    • Manage driver payouts
    • Communicate with customers, drivers

    Key resources

    The assets you require to run your organization at max potential are known as key sources. Uber is based on a sophisticated technological platform. It also needs drivers to support its value proposition. Staff and expertise are heavily relied upon by service-oriented businesses.

    Uber’s key resources include:

    • Network of drivers & riders
    • Digital platform (website & apps)
    • Technology talent
    • Advanced Algorithms & Data Analysis
    • Brand image

    Key partners

    You must define any external stakeholders who can contribute to your business in the key partner section. The development of tech platforms can be driven by Uber investors. Drivers can be hired with the help of recruiting partners.

    Uber’s key partners are:

    • Drivers
    • Investors & venture capitalists
    • Technology partners
    • Commercial partners
    • Payment processors
    • Map API providers
    • Lobbyists

    Cost structures

    You should be able to tell what you spend your money on based on your cost structures. If your enterprise grows, you must also mention future costs. This area includes expenses such as hardware procurement, software development, and rental services.

    Attributes that make the cost structure of Uber are:

    • Customer acquisition costs
    • Legal & settlement costs
    • Insurance costs
    • Research & development
    • Lobbying & compliance
    • Platform maintenance
    • Infrastructure cost
    • Customer support

    After you’ve created your business model canvas, the next step is to analyze it. You have a comprehensive view of what’s going on in your company and can spot bottlenecks. Make sure to share it with stakeholders so that the content may be improved. Also, don’t cling to the canvas’s original version as it is a flexible document.

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    Final thoughts

    Uber, like other successful startups, did not become well-known overnight. Their success may be traced back to greater business model innovation, which provides clients with better services at reduced prices. Almost everyone appreciates the services they provide. Uber has transformed mobility for billions of people across the world by arriving on time, conveniently, and safely.

    FAQ

    Who is the founder of Uber?

    Travis Kalanick and Garrett Camp founded Uber in 2009.

    Who is the CEO of Uber?

    Dara Khosrowshahi is the current CEO of Uber

    What is the revenue of Uber?

    The revenue of Uber was 1,113.9 crores USD in 2020.