LOW COST THEORY:A STARTER FOR BUSINESS ENTRY

Competition in business market can be compared to a two-way traffic in a highway where most of the vehicles maneuvering in the road with one another. Some cars are ahead of others, some are at par and some at the bottom line. When the competition is too tight, a bumper to bumper movement is a common scenario. Like most cases, a driver wants to get ahead of the front car. In business environment, the underlying statement would be: How can you able to move on traffic like this when you are new in the market?

The first strategy a new businessman will do is to lower the price of his products in order to compete with other business wherein the products he is selling are in the same variety with others but lowering the price is not only the moves he has to do because even if your product is affordable it doesn’t guarantee that your good, there are many things to consider before you will launch your products in the market, below are the important points that I suggest, to wit:

a.) CHOOSE YOUR MARKET SEGMENT

When we say, market segment I mean the type of customers where your product be introduced because not all customers prefer lower prices but some market segment wants quality over price and some wants a little low compare to the other product but the quality is at par or great. Once you have selected your market segment and know that their preference is lower price then you’re initially good to proceed.

b.) INTRODUCTION OF PRODUCT

Marketing is very important if you’re new in the business because that is where your customer knows what you’re selling, it’s the benchmark and it gives sign if your product will be accepted in the market. We have to remember that saying “first impression last”.

c.) LOWERING YOUR OTHER COST

Once you are already in the market, one of the major problems is maintaining your level or status quo. You need product innovation, if not then at least improves the quality of it without changing the price. The best way to do this is review the value chain and sees where you can less your cost.

d.) GETTING TO KNOW YOUR ENEMY

Business is a risky game, you need an offense and defensive game plan and in order to be on the track of the game you have to know your opponent. Know the important information that makes your enemy tick because “Knowing your enemy is correcting your flaws”.

In a business world where the market is too big, a careful planning and analysis are essential because in that market field your enemy is always in constant change therefore you need to be quick witted and alert to survive.