Question: After reading the chapters in this module, review the following three

Question

Question: After reading the chapters in this module, review the following three (3) topics below. Choose and post your response for one (1) topic.

Chapter 1: High-Potential Ventures

Many see every small business as a high-potential venture. How realistic is that? Are most small businesses high-potential ventures or do they tend to be less lucrative?

Chapter 2 The Greatest Issue:

In a survey of small businesses, respondents said the most difficult ethical issue they faced were relationships with customers, clients and competitors. Discuss ethical issues you believe fit into those categories and how a business can address them.

Chapter 3 Social Responsibility:

Meeting obligations to society and the environment may cost a business more money. Is social responsibility only an issue for large corporations or is it important for small businesses to make this part of their operations? Discuss the impact of social responsibility on a small firm and how they should respond

Explanation / Answer

Small businesses as high potential ventures:

In all fairness I believe the potential of a business is defined by product , industry type , alternative options ,competitive scenario and customers

Unless we analyse the barriers to entry and uniquness of the product the potential of the business cannot really be ascertained.

Quite lately I was asked whether a energy drink company will do well in the country . The immediate answer everyone gave was "yes". I held back though and asked them to measure the business case against the porters 5 forces

1. Therat of new entrants : A number of energy drinks were trying to play in the same space withe the same value proposition. Hence there was nothing new

2.Threat of Alternatives: Red bull was so dominant in the market that consumers were ready to pay 3 times premium for the same

3.Bargaining power of buyers : Bargaining power of buyers was so high that the retained margin on the product would not be sustainable

4.Bargaining power of suppliers : Raw material cost was the same as that of any other energy drink and hence no added benefit as the committed volumes was lesser

So my input on this is that we need to analyse a business to the final detail before saying whether a small business is good or bad or in this case what is the potential of the business

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