Knowing your business arena, or marketplace can help you to bring order to chaos.
Understanding the Business Arena
A business cannot be truly successful unless it really understands the arena, or marketplace, in which it is operating. This means knowing the basic dynamics and motivations at work in the marketplace.
- What are the hard economic facts your business must address?
- What are the problems, frustrations, wants and needs in the marketplace?
- What is the best way to serve the customers in the marketplace?
- How can you help your customers to be more successful?
- How will you interact with your competition and competitors?
- How is globalisation impacting my business?
- Perhaps you need to train to take out the strain?
The most important aspect of understanding your business arena is knowing your key customers well. In a large number of businesses, a handful of customers accounts for a substantial part of the businesses sales (the 80/20 rule).
It is important to know the customers personally. But if you can’t, study their marketing materials, annual reports, and all the information you can find about them. Know the market size, the market segments, the demographics and psychographics.
Today many people see their marketplace as the world, even from the day they start up. This suddenly complicates the whole process of understanding as you cope with cultural and language issues.
Globalisation is becoming a fact of life and the world is shrinking as business is being driven more and more by all the new technologies. It is probably more important today to focus on a marketing strategy that focuses more on where to compete rather than on how to compete.
Cloud computing, Big Data, analytics and the Internet of Things (IoT) are all helping to contribute to a new world of knowledge about the marketplaces in which we all operate. These are the things that will help us all to build and engages customer base on which to build a sustainable business.
“I find that the process of business planning much more significant when good research and analysis is undertaken about the business arena you find yourself in”. Peter Sergeant
You need to become familiar with the basic economics of the market and the personal aspirations, laws, regulations or other pressures that could affect your business operations and its success.
How will your offerings help overcome the problems? With individual projects getting bigger and bigger, the stakes going higher and higher, and negotiations becoming increasingly more complex, it is an imperative today to know exactly who speaks for the customer and what are the criteria they use in their decision-making.
Learn about you business arena could just mean your survival
A German Shepherd starts chasing rabbits and before long, discovers that he’s lost. Wandering about, he notices a panther heading rapidly in his direction with the intention of having lunch. The old German Shepherd thinks, “Oh, oh! I’m in trouble now”.
Noticing some bones on the ground close by, he immediately settles down to chew on the bones with his back to the approaching cat. Just as the panther is about to leap, the old German Shepherd exclaims loudly, “Boy, that was one delicious panther, I wonder if there are any more around here”?
Hearing this, the young panther halts his attack in mid-strike, a look of terror comes over him and he slinks away into the trees. “Whew,” says the panther, “that was close, that old German Shepherd nearly had me”.
Meanwhile, a squirrel who had been watching the whole scene from a nearby tree figures he can put this knowledge to good use and trade it for protection from the panther. So, off he goes. The squirrel soon catches up with the panther, spills the beans and strikes a deal for himself with the panther.
The young panther is furious at being made a fool of and says, “Here, squirrel, hop on my back and see what’s going to happen to that conniving canine”.
Now, the old German Shepherd sees the panther coming with the squirrel on his back and thinks, “What am I going to do now?” But instead of running, the dog sits down with his back to his attackers, pretending he hasn’t seen them yet, and just when they get close enough to hear, the old German Shepherd says, “Where’s that squirrel? I sent him off an hour ago to bring me another panther”.
Moral of this story… Don’t mess with old dogs, know the people in your marketplace. Age and skill will always overcome youth and treachery. Bullshit and brilliance only come with age and experience. Of course, I am in no way insinuating that you are old, just ‘youthfully challenged’.
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When I see small businesses struggling, I can’t help asking myself, “Why don’t they understand their customers, their community or their marketplace”?
It’s not rocket science and there are a few simple rules to follow,
- Ask plenty of questions.
- Ask more questions,
- Find time to walk around your community.
- Do the research.
- Analyse the information and knowledge you gather about your market arena.
- Act on the information, otherwise, you are wasting your time.