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Question
Aditi started her boutique business near an industrial area and she was not getting clients as she had expected. What are the factors which have been ignored before starting the boutique? Suggest the various factors that she has to look into before venturing into business.
Solution
Aditi started her boutique business near an industrial area and she was not getting clients as she had expected because selection of a product or service will depend upon many factors. They are:
(i)Demand
(ii)Supply and Nature of Competition
(iii)Cost and Price of Product
(iv)Project Innovation and Change Here, the main factor which had been ignored before starting the boutique is DEMAND of the product. It is to be suggested to Aditi that while assessing the market, an entrepreneur has to prepare details on the following lines:
(i)Demand:
(a)The demand assessment will be based on the size of market being targeted.
(b)The different types of markets are local markets, market at state level or national/international market.
(c)It involves a detailed study of the target groups of consumers, their preferences, tastes and other related variables.
(ii)Supply and nature of competition:
(a)Supply position refers to the complete picture of quantities of the product made available in the market by all the existing players.
(b)It should take into account future supplies from possible entrants in the field.
(iii)Cost and price of product:
(a)It is important to determine the cost of the product and its comparison with available products in the market.
(b)Cost variable of competitors in terms of transportation delays, wastage, storage etc., have to be studied to spot cost advantage. This will influence the delivery mechanism of the identified product or service.
(iv)Project innovation and change:
(a) Market assessment will require a study of prevailing innovations and changes being carried out by existing entrepreneurs.
(b) Technological advancements in the field have to be analysed because they may change the quality and influence the cost and price ultimately.
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