Introduction
Business research is a management activity that helps companies determine which products will be most profitable for companies to produce.
Business research is a systematic and objective inquiry that provides information to guide managerial decisions, which are arrived at through planning, acquiring, analyzing, and spreading relevant data to decision-makers to gather the organization to take appropriate actions to maximize business performance.
The focus of business research is on shifting decision-makers from intuitive information gathering to the systematic and objective investigation.
It examines all aspects of a business environment. And asking questions about competitors, market structure, government regulations, economic trends, technological advances, changing patterns of the business world, and many other factors which are more important than other factors that make up the business environment.
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There are several steps which are necessary when conducting business research, including
- Product analysis,
- Market analysis,
- Financial analysis,
- Competitor analysis,
- Growth analysis
Product analysis is the first step in business research. Companies must find a product that meets consumer demand or exceeds consumer demand.
Market analysis helps determine how much profit may be earned from current demand.
Financial analysis determines the cost of each production item used to produce goods and services.
Competitor analysis is an essential part of business research, while growth analysis is crucial in understanding a business operation’s profitability.
Here are a few examples that illustrate what business research is:
Micro-credit programs have been found to have a big effect on increasing rural people’s quality of life, but there’s strong evidence that these credit facilities are frequently misused and misdirected.
In this context, it is critical to investigate credit consumption and assess the degree and scale of credit misuse and diversion in rural regions.
Definitions
According to McDaniel and Gates
“Business research is the planning, collection and analysis of data relevant to business decision-making and the communication of the results of this analysis to management”
Zikmund said that
“Business research is a management tool that companies use to reduce uncertainty. It is a manager’s source of information about organisational and environmental conditions and covers topics ranging from long-range planning to the most ephemeral tactical decisions”
Roles
Here are some Common Roles of Business Research
Decision-making
Business research provides analyzed information about the market, consumer, or business environment that facilitates decision-making in the organization.
Management Planning
Business research helps explore different market opportunities and select promising ones for management to design organizational objectives and utilize resources for planning.
Problem-Solving
Business research helps managers develop alternative solutions for a particular business problem concerning the marketing mix elements of the organization.
Controlling
Business research is used as a controlling technique to manage different plans and policies by exploring defective or poor management decisions.
Designing Marketing Operations
Business research helps determine marketing and production operations, which are key tools for generating revenue from the market.
Operating Managerial Functions: Business research provides market information that helps operate different managerial functions, including planning, motivating, forecasting, coordinating, controlling, evaluating, etc.
Trends and Possibilities
Business research is used to analyse the trends and possibilities, as well as help the firms in adapting to changing market conditions and staying ahead of the competition.
Competitive strategies
It help in developing effective competitive strategies by identifying the strengths and weaknesses of competitors, determining unique selling propositions, and developing marketing campaigns.
Evaluating performance
Evaluating performance using business research involves analyzing key performance indicators, such as sales, revenue, profitability, customer satisfaction, and employee productivity.
Risk management
It is used to risk management by identifying potential risks and threats to the organization, analyzing their probability and impact, and developing strategies to mitigate or manage them.
Business Research and Other Information Sources
Businesses can gather valuable information for decision-making from various sources other than conducting their research. These sources include:
- Decision Support Systems (DSS)
- Business Intelligence (BI).
Organizations need to understand the relationship between these information sources and their research to make effective decisions regarding their objectives, strategies, and plans.
DSS is a computer-based system which provides managers with the information they need to make informed/right decisions. It utilizes data, models, and analysis tools to support decision-making processes.
On the other side, business intelligence (BI) refers to the tools, technology, and procedures used to collect, integrate, analyze, and present business data. It assists businesses in making sense of the huge volumes of data they collect and turning it into a meaningful view.
Both DSS and BI play a critical role in supporting managerial decisions. By utilizing these sources, businesses can improve their decision-making processes and make more informed choices.
Steps for Business Research
The key steps in conducting business research include:
Product analysis
Analyze the product or service being offered by the company.
Determine its strengths, weaknesses, opportunities, and threats (SWOT analysis).
Identify areas for improvement and potential new product or service offerings.
Assess the product’s life cycle and the need for updates or modifications.
Example: A software company may analyze the features and performance of its application, compare it with competitors, and identify areas for improvement for better optimization of resources.
Market analysis
Investigate the target market’s demographics, psychographics, and customer preferences.
Determine market trends, possibilities, and potential obstacles.
Examine market size, prospective growth, and market share.
Understand customer needs, pain points, and expectations.
Example: A clothing brand may conduct surveys and focus groups to understand consumers’ preferences, fashion trends, and potential market segments.
Financial analysis
Review the company’s financial performance, including revenues, expenses, and profitability.
To measure the company’s financial health, examine financial ratios such as liquidity, solvency, and efficiency.
To determine the profitability of new products or services, perform a break-even study.
Develop financial forecasts and budgets for future growth.
Example: A restaurant may analyze its sales, food costs, and labour expenses to identify areas for cost reduction and optimize its menu pricing and provide the foods in an effective prose range.
Competitor analysis
Identify and evaluate the company’s main competitors.
Analyze their products, services, marketing strategies, and market share.
Find their advantages and disadvantages.
Determine potential competitive advantages and differentiation opportunities.
Example: A mobile phone manufacturer may analyze its competitors’ devices, features, pricing, and market share to develop a unique selling proposition and marketing strategy to see their maximum products.
Growth analysis
Examine the company’s possibilities for expansion, including new markets, client segments, and product lines.
Determine prospective growth factors such as technical advances, market trends, or changes in consumer behaviour.
Develop a growth strategy, including goals, objectives, and action plans.
Monitor and evaluate the success of growth initiatives, adjusting the strategy as needed.
Example: An e-commerce company may analyze the potential for expansion into new markets or the addition of new product categories to drive growth and increase profits.
What is Business Researcher?
A business researcher is a professional who helps organizations to make informed decisions, identify opportunities, and solve problems by conducting research and analysis. Here are some roles of a business researcher:
- Analyzing industry trends, such as new technologies, regulations, and competitor strategies, helps organizations remain competitive.
- Data collection and analysis using a variety of approaches such as surveys, interviews, and focus groups.
- Researching to identify areas to improve, suggesting new business ideas, and advising on important decisions.
- They help in preparing clear and concise reports, and presentations, and visually helps to present research findings and recommendations to stakeholders.
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