Doing Foreign Business for Wrong Reasons


The wrong reasons for entering a market include; large population, cheap labor, and “Everyone else is going there.” Population does not necessarily mean consumers or a skilled work force, and even a large consumer base does not mean there is an established market. A terrific investment in education and the establishment of an infrastructure for the conduct of business, whether manufacturing or marketing, may be necessary.

Some markets may be too small to support the cost of doing business. It is critical to enter only these markets where you can serve customers to their satisfaction. An inadequate understanding of products due to degree of technical sophistication and language barriers may require special attention to adapt documentation, training and support to the market and customer. Many apparently small markets can be surprisingly active.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Delighting the Customer


Companies need to delight customers to gain a competitive edge. The delight is referred to as a profoundly positive emotional state that results from having  one’s expectations exceeded to a surprising degree. The type of service that results in delight is “positively outrageous service”—that which is unexpected, random, extraordinary, and disproportionately positive.

A way that managers can conceive of delight I to consider product and service features in terms of concentric rings. The innermost bull’s eye refers to attributes that are central to the basic function of the product or service, called musts. Their provision isn’t particularly noticeable, but their absence would be. Around the musts is a ring called satisfiers: features that have the potential to further satisfaction beyond the basic function of the product. At the next and final outer level are delights, product features that are unexpected and surprisingly enjoyable. These are things that consumers would not expect to find and are therefore highly surprised and sometimes excited when they receive them. For example, in your classes the musts consist of professors, rooms, syllabus, and class meetings. Satisfiers might include professors who are entertaining and friendly, interesting lectures, and good audio-visual aids. A delight might include a free textbook for students signing up for the course.

Delighting customers may seem like a good idea, but this level of service provision comes with extra effort and cost to the firm. Therefore the benefits of providing delight must be weighed. Among the considerations are the staying power and competitive implications of delight.

Staying power involves the question of how long a company can expect an experience of delight to maintain the customer’s attention. If it is fleeting and the customer forgets it immediately, it may not be worth the cost. Alternatively, if the customer remembers the delight and adjusts her level of expectation upward accordingly, it will cost the company more just to satisfy, effectively raising the bar for the future. Delighting customers does in fact raise expectations and make it more difficult for a company to satisfy customers in the future.

The competitive implication of delight relates to its impact on expectations of other firms in the same industry.if a competitor in the same industry is unable to copy the delight strategy, it will be disadvantaged by the consumer’s increased expectations. If you were offered that free textbook in one of your classes, you might then expect to receive one in each of your classes. Those classes not offering the free textbook might not have high enrollment levels compared to the delighting class. If a competitor can easily copy the delight strategy, however, neither firm benefits (although the consumer does), and all firm may be hurt because their cost increase and profit erode. The implication is that if companies choose to delight, they should do so in areas that cannot be copied by other firms.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Just about Cash Flow


Cash flow is different from profit. Profit is the difference between revenues and expenses. Cash flow is the difference between receipts and disbursements of cash. Profit may flow whether or not anybody has paid for anything. Cash flows only when somebody pays for something. Time after time, businesses with good sales and good profits go broke. It is surprisingly commonplace. The problem is the the cash doesn’t flow when the profit flows.

The explanations for the large number of new business failures, undercapitalization, inadequate management, and poor marketing, may be valid, but the overwhelming reason is that the managers did not understand cash flow. They behaved as if profit were cash, which is not. They acted as if all that is needed to win the business game is to make a profit, which is not true. Cash is different from profit. You need both to win the business game.

A business can survive and thrive only if it has both positive profit (not losses) and positive cash flow (more flowing into the bank than out of it). To win you must produce more than you consume, and you must do it in such a way that you can meet critical payments as they come due.

Profit may be the most common measure of whether a business is winning or losing, but cash flow is the most critical measure. Businesses can survive a surprisingly long time without profit. They die on the first payday there is no cash.

Your company’s bank is like a jar is a reservoir, so it is the gas tank. And what is in the reservoir is easy to measure. The amount in the reservoir is what was put in minus what was taken out. A convenient way to measure whether the supply is increasing or decreasing is to measure whether more was entering or leaving during the most recent period of time. Cash flow into the bank account is such a measure. How much is in the reservoir is of intetrest, of course, but it is changed by changing the cash flow.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight