A Qualitative Study on the Most Effective Methods in Proper Business Management

Coojacinto, Jarold

Dee, Christian

Research in Daily Life 1

Professor Edwina Bensal

Saint Jude Catholic School

15 October 2016
 Outline Page
I. Introduction
A. Background----------------------------------------------------------------------------------------3
B. Benefits & Beneficiaries-------------------------------------------------------------------------4
C. Objectives------------------------------------------------------------------------------------------5

II. Body
A. Top Strategies Utilized to Ensure Company’s
Effectiveness and Efficiency -----------------------------------------------------------------------6
1. Proper Evaluation
2. Economic Target of Profitability
3. Right Leadership Positions
B. Business Tactics Applied when Competing with Rivals -----------------------------------8
1. Diverse Set of Services
2. Power of Social Media
3. Continuous Product Innovations
C. Advantages the Strategies Bring to the Profitability and
Sales Growth
----------------------------------------------------------------------------------------10
1. Long-Term
2. Competitive
3. Instant
4. Cost-Efficient

III. Conclusion
A. Summary & Highlights-------------------------------------------------------------------------12
B. Limitations & Recommendations
------------------------------------------------------------12

IV. References------------------------------------------------------------------------------------------------
14
I. Introduction

A. Background

Turning a business into a success story can be a very difficult task in the cut-throat

business industry. Everyone wants fame at his/her fingertips, which makes it difficult for others,

especially for those who are just starting, to achieve success. Businessmen are in constant

competition with each other so thinking outside the box is one of the key points to bring success

to a business. In his study, Nazar (2013) found out that approximately 543,000 businesses are

started every month and in each month, more businesses shut down than start up. Due to a

beginner’s lack of experience and prior knowledge in proper strategies in managing a business,

most of these new businesses just fail almost immediately.

Moreover, Wagner (2013) states that lack of uniqueness and product differentiation is

one of the main reasons why businesses fail. Most of the time, this is what slowly kills a business

because once customers get tired of the product/service a company is providing, they will

immediately shift to another enterprise. In addition, failure of a business to utilize its resources

effectively which causes operational inefficiency, is another main cause of business closure

(Salem, 2015). Being able to maximize the full potential of all assets – be it the employees, raw

materials or the working capital-- is another must in managing a business because underutilizing

them can affect the business negatively in the long run. Handling a business properly

encompasses both of these problems and it is important to address them by identifying the best

strategies and practices to prevent bankruptcy of a company from happening.

In order to survive, Howes (2016) explains that the main duty of a company is to find and

exploit the weak points of every other competitor. By doing so, one can take advantage of this
opportunity by thinking of ways to improve on the weaknesses of others and applying them to

his/her own company so as to convince consumers why his/her brand is a much better choice

than others. Also, with this knowledge, a company will be aware of the errors of its competitors

and will be able to make sure that it will not repeat the same mistakes again. Thus, knowing the

best business tactics when competing is important. Another fact to remember when talking about

business management is that business sales growth is greatly affected by efficiency and

effectiveness. In order to achieve both, one must carefully plan out a strategic business plan that

would clearly detail strategies and decisions to be considered every step of the way. Mastering of

both of these factors will also be of big help to the profitability and sustainability of a company.

An example of a company that prospered and became successful due to proper

management is Urban Outfitters. According to Krippendorff (2013), Urban Outfitters, a clothing

line in the US, hires artistic individuals rather than typical businessmen to manage its stores and

branches. Because of this, it is able to challenge and maximize its own potentials as well as that

of its employees’ —artistically, logically and critically. By making these human resource

decisions, every store of the company looks a little different while every other competitor’s store

looks similar. In effect, the retailer has increased its revenues by 500% in the last 10 years,

expanding to nearly $300 billion today, as compared to $500 million a decade ago.

B. Benefits & Beneficiaries

Since the beginning of time, businesses of various kinds have always existed and at this

day and age, the business world has rapidly expanded; thus the competition is stronger than ever.

Because of this, more complex skills are demanded of an aspiring businessman if he were to

survive in the industry. Because of this fierce nature of business, it is essential for businessmen

to critically identify the best ways in making a business stand out from its competitors and to
make sure that the business remains profitable and sustainable over time. This research is thus

conducted so that entrepreneurs, especially of future generations, may benefit from its results,

which hopefully identify and outline the best management strategies that other successful

businesses have proven effective and apply these practices in running their own companies.

Also, businessmen who read the researchers’ work may learn how to maximize all of the

resources and assets available to them so they can start making more innovative and creative

choices rather than sticking to the norm when handling their own businesses.

C. Objectives

Due to the constant repetition of basically the same products and services—just with

different brand names and establishments—proper business management has become important

for a business to prosper, let alone stay afloat in the business world. In line with this, a business

needs to be aware of its weaknesses, build on its strengths and continually seek ways on how to

re-invent itself. Knowing well that this is no easy task, the researchers aspire to compile the best

strategies in ensuring the efficiency and effectiveness of a company and the top business tactics

when competing with competitors. Moreover, the study’s goal is to recognize how the said

strategies and tactics are advantageous in order to sustain profitability and sales growth. In order

to attain all these, the researchers would like to answer the following:

1.) What are the top strategies utilized to ensure that a company is effective and efficient?

2.) What are the business tactics applied when competing with its rivals?

3.) What advantages do these strategies and tactics bring to the profitability and sales

growth of the company?

II. Body

A. Top Strategies Utilized to Ensure Company’s Effectiveness and Efficiency

In strategic business management, Lao (personal communication September 5, 2016)

believes that effectiveness and efficiency should be complementary to be completely successful.

By definition, being efficient means processing things fast while being effective means doing the

right things (Man, 2011). One of the top strategies that can be employed in order to be both

effective and efficient in business is proper evaluation of a business’ systems. In this regard,

Smith (2016) proposes that the most ideal approach to enhance efficiency and effectiveness is by

taking time in measuring and assessing all of the business’ systems. This means that one should

make sure all procedures in the business’ system are well thought of and are firmly implemented

among its employees. Furthermore, proper resource utilization in all areas of production must be

observed at all times as well. This can also involve procedures and systems for effective

consumer feedback and customer relations. By doing so, the company can be effective and

efficient without risking the quality of the products/services given to its consumers (G. Garcia,

personal communication, September 7, 2016).

Another strategy that guarantees the effectiveness and efficiency of a company is

identifying the ways that the business can achieve its economic target of profitability—whether it

prefers small margin with big volume or less volume but more substantial margin (K. Lao,

personal communication September 5, 2016). For example, if a business owner can buy for one

dollar and make three dollars out of it, that is a great return on investment. However, if that same

person can buy the product for $100 and sell it for $1,000, that is a much better return of

investment (Bullock, n.d.). In a Philippine setting, Security Bank offers unit investment trust
funds (UITF), medium- to long-term investments that result to good profit in the long run, which

require only an initial amount of P10,000 and could go as high as P25,000 (iMoney, 2014). From

this investment, one can have a return of investment of 13.42%, ranging from P11,350 to

P28,350 over the next six months. Then given the strategy, one must set aside some parameters a

business is willing to compromise to achieve the target such as giving volume discounts, which

is a financial incentive for customers who buy goods in large quantities, to lock in customers and

to encourage a large bulk order from them (Mohammed, 2013). Moreover, Lao explains that one

should factor the cost, by calculating the price of all these parameters, in order to come up with a

more competitive pricing.

The third strategy emphasizes on choosing the right leadership positions—one with

enough experience and the right tools to seed skills on other employees— in the organizational

structure for the company to be efficient and effective (V. Dematera, personal communication,

September 4, 2016.). In order to make sure that a workplace is working effectively, companies

must maintain a high standard by removing the ineffective ones at the beginning of the recruiting

level (Miksen, n.d.). Hence, by coming up with procedures in order to recruit highly qualified

and skilled employees, companies can ensure high level performance within its systems.

Dematera expounds further that if the wrong person is assigned to a post, then quality of the

products/services will never achieve its 100%. This is the main reason why an efficient and

productive human resource is imperative for a successful business venture.

Effectiveness and efficiency are two of the main factors in bringing success to a business.

Thus, finding the sweet spot between both of these is the fundamental objective for all

businesses (Goh, 2013). One must constantly assess and evaluate all business systems amongst

it's stakeholders, set parameters to achieve the target of profitability and hire highly skilled
individuals suited for the job in order to realize both these key points. By continuously putting

these strategies to practice, one can get much more tangible results. Lastly, one may discover

new capacity for production and profitability, by having high return of investments and 100%

quality products and services.

B. Business Tactics Applied when Competing with Rivals

All companies have their competitors, whether it is someone who is manufacturing

similar products or someone who offers the exact same services. Successful businessmen employ

various tactics and strategies that set their businesses apart from their rivals. In line with this,

Lucas (2014) argues that offering a diverse set of services and insights to the customers is one of

the strategies in order to stand apart from others. According to Lao (personal communication,

September 5, 2016), one of the biggest mistakes businesses do is that they focus and literally

follow everything the leading competitor does except for one—undercutting the price— and he

argues that this is a very short sighted view. This means that a company should be ready to offer

value adding features at all times and to suggest other forms of services/products so as to build

trust from the customers and a much more credible reputation.

In addition, leveraging the power of content social media, which may help elevate

customer base in a dramatic way, is a very timely business tactic with the emerging power of

social media (Gunelius, 2011). It is important to understand social media marketing

fundamentals to stand out. Moreover, DeMers (2014) contends that one needs to learn how to

marketing on other forms of media other than Facebook like Instagram, Reddit and Google+

where advertisements are not yet overly saturated. Take for example, Krylon, a spray-paint

company, which sent experts to buy 127 worthless items and transform them into something

desirable. Afterwards, Krylon listed all of the transformed items for sale online on Pinterest,
being the first brand to use the new “buy feature”. In effect, Krylon’s Pinterest amassed $2.7

million in earned media on a $200,000 budget (Martin, 2016). In the Philippines, The North

Face, an outdoor product company, reached nearly half a million pesos in revenue from digital

couponing in social media alone for the year of 2015 (Beguas, 2015). This proves that whatever

social media platform one chooses is not really important; the ability to think outside the box, by

merging them with social media’s overwhelming influence, is most significant.

Thirdly, in order to guarantee that customers will not shift to other companies, an

enterprise should not stop on doing research and improving the product no matter how successful

the company already is (E. Coojacinto, September 8, 2016). In effect, maintaining satisfaction

and increasing confidence from customers are musts to guarantee loyalty from them. For

instance, Newman (2010) records Kodak, a renowned camera company, as one of the biggest

companies worldwide who lost its edge after failing to innovate. For almost a whole century, no

one commercialized the camera as successfully as Kodak. But upon the emergence of new

technology like digital photography, Kodak was not successfully able to keep up with the

innovation race. With today's rapid technological evolutions, businesses rise and fall faster than

ever before so businesses should be able to anticipate forthcoming trends and continually rise up

to the challenge of innovating and re-inventing themselves. If not, they might suffer the same

fate as Kodak, who now has a stock price 96% below its peak.

To summarize, there are three strategic ways in competing with business rivals. First,

offering diverse sets of programs and value adding features is vital to make sure that customers

keep coming back. Also, maximizing on the popularity of social media by reaching out to

various of its forms is also essential to capture a broader audience. Continuous innovations by

constantly looking at trends and re-inventing the business are ways to always stay relevant and
competitive with the newcomers in the industry. Most importantly, as Lao (personal

communication, September 5, 2016) affirms in the world of business, that one should never stay

complacent because in this day and age, what one has to offer today could just as easily be

obsolete by tomorrow.

C. Advantages the Strategies Bring to the Profitability and Sales Growth

All the strategies mentioned above bring significant advantages when it comes to two

major aspects of a successful business—profitability and sales growth. By principle, Hofstrand

(2009) argues that profitability is the primary goal of all business ventures since businesses will

not survive without it in the long run. Likewise, Lao (personal communication, September 5,

2016) affirms that improving on the products over and over again does have a long-term

advantage to the ultimate profitability of the company. One good example is Urban Outfitters, a

popular clothing brand. By constantly innovating as its main strategy, the national retailer

increased its profitability by averaging 21% profit margins, for 5 years, versus an industry

average of 14% (Krippendorff, 2013). Moreover, by properly evaluating all business processes

and systems very closely, a business will have a competitive advantage compared to other

businesses since these examinations go from proper deployment of resources to identification of

which products that will still be sold. In terms of profitability, O’Farrell (n.d.) concludes that the

company will be able get the biggest possible profits as compared to other businesses who might

not get as much due to lack of proper assessments. Just like what Pacific Northwest did; the

business cut out unprofitable products and services and examined each part of the production

process keenly (Schreter, 2008).

On the other hand, Baumgartner and de Uster (2012) assert that achieving growth is

enormously challenging in today’s complex and fast-changing business environment. They

further state that companies who put sales management at the top of their priority have captured

astonishing growth opportunities. An advantage of being able to accurately market a product on

social media is that sales growth can increase in an instant (G. Garcia, personal communication,

September 7, 2016). Greenblatt (2015) lists Marlin Steel as an example of a business which

focused on attracting more clients, by marketing on social media, to facilitate sales, which

normally is the focal point of any sales growth strategy. Truly, when people have the ability to

identify the target markets of their businesses, the business will have a cost-efficient advantage

so sales can grow in a great manner (V. Dematera, personal communication, September 4, 2016).

A good example of a company who utilized the said strategy is Target, a famous retail store.

Target’s earning growth overshot its goals when they targeted the margin of expansion to be at

20-30 basis points only. Instead, the company did 50 basis points (Soni, 2016).

With all these in mind, the capacity to think critically in order to establish the right

strategies and business tactics is highlighted. However, it is important to consider the external

factors that may affect the effectivity of the said strategies. As markets go under the influence of

other competitors, modifying strategies is essential to continue delivering high level of

profitability and sales growth. One way to ensure this is through holding regular performance

evaluations of the employees to ensure the quality of services rendered (E. Coojacinto, personal

communication, September 8, 2016). Lastly and most importantly, thinking ahead of how each

competitor will react to each and every strategy employed is essential to get the most advantage

out of each business scheme. Having a good foresight with regards to the changing landscape of

the business industry, human resource and customer service is always an essential tool if a

business venture is to succeed and thrive.

III. Conclusion

A. Summary & Highlights

In the business industry, identifying the best strategies and practices in various areas

business management is essential in order to sustain growth and profitability. To attain both

business efficiency and effectiveness, one must continuously evaluate all business systems, allot

parameters to achieve the target of profitability and hire knowledgeable employees. Among these

three, hiring of highly effective employees is often viewed as unimportant when it actually plays

an important role in achieving the best quality of the products/services. On top of that, when

competing with rivals, one should focus on offering a diverse set of services, broadening social

media marketing and innovating the business’ products. By offering a diverse set of services and

other unique features, healthy customer relationships are established. Due to these strategies, the

sales growth and profitability of the company are greatly increased or maintained at a steady

pace. Nevertheless, all these still bring a number of restrictions that can still be explored for

further areas of improvement.

B. Limitations & Recommendations

One of the limitations of this research is the short time frame of only around 13 weeks

that this research was conducted. Due to lack of time, only four people were interviewed,

representing the view point of only three respective companies, which limit the variability of the

responses. Also, the research is only qualitative in form and did not present statistical data that

could back up the information provided. In order to further improve the results, the researchers

recommend a time frame of about half a year to monitor the consistency of trends in the business
industry more closely and see whether data collected approximates these trends. In addition,

other researchers can improve more on the accuracy of the strategies by interviewing at least 20

more people from a much broader selection of companies or perhaps focus on one industry and

get a representative sample of companies as the population sample. Furthermore, if quantitative

data are incorporated into the research proper, the strategies compiled will be much more precise

and measurable. These limitations pave way for some recommendations which may help elevate

the quality and appropriateness of the strategies, practices and tactics.

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