Starting a Business Is a Risky Endeavor Paper Example

Paper Type:  Essay
Pages:  5
Wordcount:  1173 Words
Date:  2022-08-01

lntroduction

Whereas most people believe that it is challenging to start a business, it is essential to state that maintaining the business performance as it grows is yet another critical issue. Therefore, there are significant business strategies and management approaches that entrepreneurs must borrow for successful business operations, hence the reason why it is important to analyze some of the successful companies in the retail industry. Notably, Big Lots, Walmart, and Kmart are some of the most successful stores in the American retail industry, and that is because their managerial teams managed to engage the right strategies from the beginning. For instance, it is essential that both companies focused on cost leadership strategy during their early days of operations, and it is because of that they achieved customer loyalty. Nonetheless, the company's growth strategies change later in life as they move from cost leadership to launching new stores which confirm that they have achieved growth.

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Strategic Focuses Early in their Growth Cycles

First, it is possible to note that the companies in the analysis applied similar strategies in the early growth stages, hence the reason why both companies are successful in the American retail industry. Notably, it is evident that Walmart, Kmart, and Big Lots engaged in cost leadership strategies during their early days of operation, and it is because of that approach that the firms have managed to earn the client's loyalty. The application of cost leadership strategy implies that the companies sell their products at the lowest prices in the industry to attract more customers (Couto, Ed Wiley, & Caglar, 2017). Arguably, the fact that the retail industry is competitive is the reason why companies must ensure that they earn the customer's attention to achieve sustainable growth, and offering the lowest prices is one of the possible means. Additionally, these companies also managed to emerge victorious in the retail industry since they focused on customer satisfaction during their early days in the market. Whereas the firms were interested in earning profits, they also understood that the customers are influential since they are the ones who ensure that a business achieves gains. Therefore, the firms achieved customer satisfaction by providing that the employees are motivated, as they are the ones who engage the clients in most occasions.

Core Leveraging Areas

The businesses in the discussion also borrow money for different investment projects, hence the reason why it is essential to highlight their main leveraging areas. First, it is evident that each of the companies has dozens of stores across the United States, thus implying that they mainly use their borrowed capital to open new branches as a growth strategy. The previous analysis indicates that the retail industry is one of the most competitive sectors in the United States, thus the reason why managers must engage in the right strategies to achieve growth. Furthermore, the company's other critical leveraging area is employee satisfaction and training (Dawson & Mukoyama, 2013). The fact that the workers are the essential determiners of the company's success is the reason why the management must ensure satisfaction of their desires and they are skilled. Therefore, it is common for the firms in the analysis to provide their workers with training sessions where they learn new skills which will result in better performance.

Change in the Company's Growth Strategies

Third, these companies also change their growth strategies later in their operations. Notably, the previous analysis indicates that the primary plan that is applied by these companies during their early operational times is cost leadership, as their main intention is earning the customer's attention. However, there is a change in strategy during the later days of operation, and it is evident that the companies choose to open more stores as a growth strategy. The fact that Kmart, Walmart, and Big Lots have multiple stores across the country implies that expansion is one of the standard growth strategies. It is possible for the companies to change their growth strategy to open new stores since they are in a better financial position when compared to their early days in the industry. Moreover, is evident to note the change in growth strategies in the early days and later during their operations since they move from the customer's interest to the company's attention. For instance, the companies expand their operations to other areas without minding the quality of services and products that they will offer to their buyers.

Common Target Market/Customers

The three companies also have common markets that they target in their operations, and the youth or young generation is the best example. First, both Walmart and Kmart are now participating in social media advertising, thus confirming that the companies are interested in earning the youth's attention. Arguably, the youth are the min peoples who engage in the use of social media, thus proving that these stores will mainly reach out to the younger generation when they place their advertisements on social sites (Couto, Ed Wiley, & Caglar, 2017). Furthermore, the company's websites also indicate that they are interested in offering online shopping services, thus proving that they also target a common market. The application of online shopping might have a similar impact like online advertisement since it is the youth who commonly make use of the internet.

Growth by Acquisition

It is common for many companies to engage in the application of acquisitions as a growth strategy, but it is a different case for the three companies in the analysis. For Walmart, Kmart, and Big Lots, they have managed to achieve independent growth despite the challenges. Whereas the engagement of acquisitions implies that the companies can still find a way out when they faced with bad debts, it is different when they choose independent operations since they might lack support. Nonetheless, the company's ability to achieve sustainable growth without the application of acquisitions implies that they were under good management.

In brief, entrepreneurship is one of the most challenging business approaches, hence the reason why a manager must seek the right strategies to emerge victorious in the industry. Notably, Walmart, Kmart, and Big Lots are some of the most successful retail businesses in the United States, hence the reason why it was essential to analyze their strategies. For instance, the first segment of the analysis indicates that these companies earned recognition in the retail industry through the employment of cost leadership strategy. The fact that most people are price sensitive is the reason why it was possible for the three companies to achieve sustainable growth. However, these companies have also applied different strategies on the later date of their growth, and it is evident that they now consider opening new stores as the right strategy. Therefore, entrepreneurs must also note that they must engage in a different approach as the business matures.

References

Couto, V., Ed Wiley, J. P., & Caglar, D. (2017). Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal. New York: John Wiley & Sons.

Dawson, J., & Mukoyama, M. (2013). Global Strategies in Retailing: Asian and European Experiences. Chicago: Routledge.

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Starting a Business Is a Risky Endeavor Paper Example. (2022, Aug 01). Retrieved from https://proessays.net/essays/starting-a-business-is-a-risky-endeavor-paper-example

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