Principle of Business Development
Since the early of civilization, human beings have known that business has an important role to reach wealth. Business gives what individuals and society need. Today, people learn business to get sustainable money. There is a lot of article and book about business, include my article about business development steps. So, it’s not easy to recognize what matters from the business.
Studying business from business history gives insight into what’s important in business. History shows something that always exists in the development of a business.
The important thing in the business is efficiency and sharing benefits competitively. Efficiency allows entrepreneurs to get profit from the business transaction. It also helps entrepreneur offer a good price.
how to do business efficiently?
The way to run it is by specialization, the scale of production, and create more fit between customer problem and company solution. So continuous market research is important to create the best-fit offer. Business tells the offer in copywriting format or advertising in several media channel.
Specializing for efficiency
Since barter trading, people know that business needs efficiency. At that time efficiency is achieved by specializing in production. Specialization and focus in creating a product encourage people to produce products quickly, cheap and good. Because he has put his time and energy into a field, he will find a better, faster and cheaper way to compete in a market.
Because specialization is efficient, the state tends to specialize in its core business areas. The city also has its own specialization. specializes, villages specialize. That specialization does not have to be a whole country or city only make one product, but there is a dominant product.
Adam Smith developed the idea of specialization for this efficiency by offering a division of labor. When within the company, there is a division of labor, with a smooth production flow, then productivity will good and growth occurs.
For efficiency too, Ford advised workers to be obedient without thinking, so that the conflict between the management team and the workers is minimized.
With the division of labor, the employees will handle the tasks easily and quickly mastered the production process.
Today, specialization is not only in production house but also they produce for specific market. Therefore, they do segmentation and choose specific market segment. By target for the specific market, the business can make attraction offer, because they program their products for the specific segment. To match
Large production scale for efficiency
Creating large quantities of products will reduce production costs per product. In addition, producers can also press profit margins, in the hope if the goods sold a lot, total profits are also many.
The production cost of a product has fix cost and variable cost. Whatever quantity of product that we made, fixed cost does not change, not multiply. And the variable cost increases when quantity also increases.
Machinery for Mass Production
Consequently, after a business has an orientation to mass production, they need technology, machine, teamwork, and market that they buy.
Humans are constantly looking for ways to enlarge the scale of production, using animal power, heavy machinery, and computers, aiming to increase mass production.
Teamwork for Mass Production
To manage large machine and large market, they then need a team and manage them. Therefore, business needs leadership and management discipline. Vision make the team more cohesive tea