10 Aug 2017, 09:07 — 5 min read
Coming from a business family, I was first introduced to the concept of entrepreneurship through my grandfather and father. Back in the 1980s they used to own a milk business. Within a few years, it went on such a large scale that my grandfather was the one who decided the price for milk in the state along with other influential tycoons in the same vertical. My father has been handling this diversified business since the age of 18. However, one can’t expect the business environment to be favourable and smooth throughout its course and consequently, they had to give up that business due to some externalities and eventually forayed into a supply chain business.
'Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals in this dynamic competitive environment’- Jim Rohn.
To me this is one of the finest definitions of success. Upon gaining insights from my father and grandfather and further through my educational & working experience I have come to the realisation that following are three crucial attributes that can ensure profitability and henceforth the success of a business in the long run.
I consider this attribute to be a crucial quality for an entrepreneur as experience enables him or her to look at the externalities and internalities with a cause and effect relationship. I believe that, this trait is something that can’t be learned through business lectures; rather it can be acquired through the application of business fundamentals in a real business world. No matter how creative or innovative a business idea is, it can be fully grasped and implemented only through personal experience.
2. Product Differentiation
I strongly believe that in this dynamic competitive environment, entrepreneurs can stand apart from the others or gain competitive advantage by offering something unique and different to the consumers. This can be achieved through a business technique initiated by Edward Chamberlin called Product Differentiation. Many entrepreneurs in today’s world are successful because either their products are different from the ones offered by their competitors or the products/solutions offered by enterprises targets a specific niche.
Product differentiation can be applied to products in the market with high competition and price inelasticity. A successful product differentiation can enable entrepreneurs to defend themselves from their products prices levelling down, or losing the market capture due to new entrants or substitutes in the market. Product differentiation is one of Porter’s five forces. Some companies that have managed to gain a unique standing in the market through this strategy include companies like Apple, Ikea, Whole Foods, Nike, Hero Honda and many more.
3. Strategic Planning / Strategic Intent
The last but not the least attribute that I consider to be crucial for an entrepreneur to be successful in long run is to have strategic intent and the ability to plan strategically. I believe that this attribute is the most important one and should be ingrained into every entrepreneur. While talking to my father during one of our ‘father-son’ conversation last year, he mentioned a famous quote - ‘If you fail to plan, you plan to fail’. He emphasised on the fact that if you don’t plan ahead of time, you are more likely to falter in the long run.
I believe that this attribute enables the entrepreneur to clearly highlight the ultimate goals, the strategy formulations and their effective implementation that are crucial to achieve the long-run envisioned organisational goals. An entrepreneur should be able to analyse the situation, whilst keeping in mind the resources available in the organisation for it implementation to attain the desired goals and objectives. Moreover, I strongly believe that an entrepreneur should have the ability to foresee the externalities and the internalities that might affect its business operation and ultimately the company’s bottom line in the future.
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By Varun Bhagat