Good business versus failed business
A business is an entity that seeks out and processes the money of the customer via the labor of the employee. The effect is the product. The only purpose of a business is to exist.
So what makes a good business and why do some go under? It all comes down to the decisions of higher management. They are responsible for the following:
The selection of grazing lands. If people are no longer demanding phone lines, a telecom company can either die or choose to diversify. For instance by providing multimedia products and mobile connections.
The inner workings of the company. Health is important for the brain, the nervous system and the individual cells. If you have excellent workers but can't get orders down to them, your operations cease. Individuals that provide the desired effect have to be selected and maintained.
Material management, facility management and logistics are an important part of the innerworkings as well. If you pay too much for raw materials and can't get the product out in time your company might fail.
The approach of the customer. As higher management you have to accurately determine what type of product you want to sell to which type of customer under what kind of conditions. A famous example is VHS versus Beta-max. You can have an excellent product, and be very proud of it indeed, but if you fail to convince the customer, you loose.
A good company succeeds in these three areas. A bad one fails in one or more.
Next chapter: Conclusion
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