1. What Makes a Firm Successful? Using your book discus several strategies firms undertake in their search for success.
Sometimes luck plays a role in a firm’s performance. Luck is sometimes defined as success. It, however, is not the primary factor in a firm’s performance. Most business scholars would not expect success from a strategy of waiting for a random draw.
By focusing efforts on producing quality products, a firm can create success. However, consumers may not be willing to pay more just to have a small improvement in quality. There is a clear connection between offering services without the frills and offering lower quality services.
Some believe that the first movers (the first firms to bring out new products) are often the most successful. Sometimes firms wait for others to take the risk and then jump in with better distribution and services to take over the market.
Size effects success. On average, as a business market share has risen, its profit rate has also tended to increase. Sometimes large companies hide their largeness to imitate smaller rivals by shrinking headquarters, slashing layers of management, and subdividing into smaller units. It is important to know when size is important for success and when it is a detriment. Many analysts have argued that success hinges not on acquiring a diverse set of business, but on divsesting unrelated businesses to focus on a single line of business – a core competency. Counter examples are easily found, however. In contrast to a single focus, some firms have found success by merging or combining companies. Globalization is everywhere all over the world and it is important to utilize it.
Some say that the secret of success is the person in charge. Many companies point their reason of success to their leaders. Recent studies show that the lives of CEOs can influence the performance of their companies. There is no doubt that in a few instances the success of a company derives from the personality of the...