Powerful suppliers possess What Makes a Good Salesman HBR Classic more power to capture significant value for themselves by demanding high prices while limiting the quality and the quantity of the product or services or by transferring the cost on the participant of the industry. Many condition imposed by the suppliers generally include the increase in price while compromising the quality and quantity. The buyers having strong bargaining power can highly influence the profitability of the suppliers operating in the market by imposing condition that are not much favorable for the suppliers in terms of price, quality or service.
Therefore choosing clients often become crucial for the organizations as to avoid the situation of being highly depended on the buyers. The level of interest and concentration of buyers toward the product gives them more or less power.
Powerful buyers could flip the side of the powerful supplies by forcing the prices to move downwards and by demanding high quality and services by creating a competition between the participants in the industry on the basis of price and quantity. Customer are deemed strong if they contain negotiating leverage specifically if the industry is sensitive to price, the buyers can pressure suppliers for further price reductions. Though the model from a strategic point of view is an important tool but there are certain limitation associated with the application of the porter five forces model.
The framework use a classic perfect market and relatively a static structure of market i. Apart from the model only provide the overview of the environment and does not define the industry clearly. As it can be difficult to group the companies having similar business lines and to call it an industry. Therefore Porter framework due to its limitation is too inert to be depending upon outside the short term to medium, term objectives.
It emphasizes more on external factors and ignore the specific factors that are more specially related with the firm. Moreover it does not consider non-market forces. In fact, the analysis of the environment needs to feed all planning aspects as well as it should be continuous. The internal environment of an organization includes internal customers or staff, wages, office technology and finance etc.
Additionally, the macro environment includes legal and political factors, sociocultural forces, economic forces and technological factors. For the purpose of maximizing the benefits of such analysis, it is important that it should be used on regular basis so that an organization would be able to identify the trends.
The effect of the particular external factors or forces might have extreme consequences for the specific department or divisions, also the analysis better helps companies in clarifying the needed or required changes, thus identifying the potential options Norton, These are the forces that tends to be altered by the influence of government on the infrastructure of country.
The political factors may involves environment regulations, employment laws, tariffs, tax policy, trade restrictions, political stability and reforms.
It is noteworthy, that the charities needs to be included where a government are not willing services and goods to be provided. The What Makes a Good Salesman HBR Classic economic factors or forces involves interest rates, inflation, and growth of economy, cost of living, working hours, wage rate and exchange rates. Combining these factors, it last greater and inevitable impact on organization.
The culture or social influence on certain businesses vary from country to country. It is significant to consider these factors.
The social factors includes safety and health consciousness, various demographics, population growth rates and cultural aspects. Notably, What Makes a Good Salesman HBR Classic technology is one of the most important way of being competitive in the highly competitive market arena.
Not only this, it drives globalization, the factors includes environmental and ecological aspects, and available services as well as products. An organization should innovate and be compatible with the technologies. The What Makes a Good Salesman HBR Classic legal factors involves the certain laws and regulations which might effect on the business operations of an organization.
It also includes impending and current legislation that tends to impact on the industry in areas including competition, employment, safety and health. An organization should consider the influence of the national and international laws where the organization would originate the business operations. The What Makes a Good Salesman HBR Classic environmental factors include all those factor lasting impact or influence, the surrounding environment most likely determine environmental factors.
The factors involves awareness of the seasonal or climate change or terrain variation. The analysis of the environment including internal and external elements is vital for organization since it impacts on the performance of an organization.
To conclude, PESTLE analysis is considered as an effective tool of planning and it offers viable and effective technique foranalyzing and scanning the operating environment of an organization. The effectiveness of the analysis highly depends on the accuracy of the collected data, updates to accommodation changes in timely manner and other tools trimming down the PESTLE limitation to some extent.
Such may include the supply chain efficiency, value chain maintenance, technology or other factors, that offer value to the company and in return allows the organization to offers similar value to the customer. In addition, it also analyze the factors that are Rare within the organization. Such analysis of the compatibilities or capacities is important, as it allows the organization to develop the sustainable competitive edge over it.
The value factor analysis of the organization gives an eye opening view to the management and also offers the solution on where the organization may build the market utilizing the area value creation factors.
Moreover, it also determines the Imitable factors. These are the factors that are easily imitable by the organization other players and thus needs to be considered.
In addition, the imitable factor also outlines the factors that are inimitable by the other organization. These in-imitable factors allows the organization to developed the sustained competitive edge in the market and hence enhances the chances of sustainability ion the long-term. Lastly, Organization factor includes the resources and functions that are offering certain value to the company.
All in all, the advantage of using the VRIO analysis is to determine the sustained competitive edge in the market. Such determination is important for the organization to expand in the market and continue its operations with sound profitability.
In addition, it offers clear view what are the factors that are valuable and inimitable o can be easily imitated in the long-term, thus preparing the organization to either use the valuable factor to delight the customer and develop a sustained competitive edge, or enhance its value and oragnation strengths to develop a strong competitive edge in the market, which is important to develop and maintain in order for the organization to remain profitable and allow the maintenance of market share in the long-term Hille, What Makes a Good Salesman HBR Classic Financial analysis is the assessment of the stability, viability as well as profitability of a sub-business, business or project.
It can be used for examining the business operations from the variety of perspective for determining the ways that can be used to strengthen the business and understating the greater financial condition or situation.
The process scan the financial statement to evaluate the relationship the disclosed items. In other words, the analysis keep focusing on the past performance evaluation in terms of profitability, liquidity, growth potentiality and operational efficiency.
The analysis of the financial statement involves the methods use in interpreting and assessing the outcome of the current and past financial position or performance since they associate to particular interest factors in investment decisions.
Thus, the analysis of the financial statement is important mode of assessing the past performance as well as planning and forecasting the future performance. Profitability: the financial analyst generally assess profitability of an organization since it is the ability allow organization sustaining growth and earing income in both long term and short term.
A degree of profitability of an organization highly depends on the income statement reporting on the operations results of company. Solvency: it is the ability of an organization paying off its liabilities or obligations to third parties or creditors in long term. Liquidity : it is the ability of an organization satisfying immediate obligations, maintaining positive cash flows and it most likely based on the balance sheet of company depicting the financial condition of organization.
Stability: the ability or an organization to remain in the business for the longerperiod of time without sustaining significant losses while conducting the business operations. By assessing the stability of the company needs use of balance sheet and income statement as well as non-financial and financial indicators.
Significantly, creating the financial ratio add meanings to the accounting and financial data of the business. Therefore, being the use of the financial ratios would provide assistance thereby leading to the overloaded information. Theratios are sub-divided into the major groups that tend to cover the financial areas. The sales amount of an organization depicts the business size. The sales implications for the selling and purchasing power, economies of scale and amount of market share.
The ration lay under profitability are discussed below;. Return on assets ROA : it is one of the most commonly and widely used performance measure of an organization. The return on equity likely measures the profit amount that had generated by assets. It is used with the intent of analyzing that how well an organization have put their assets to work comparing to other competitors. Return on equity ROE : This performance measuring parameter measures the return that the company has earned in relation on the owner funds.
The matric can be adjusted for thepurpose of reflecting the average equity amount being employed during the span of year, giving the more accurate and realisticpicture of how the organizationhas been performing throughout the year.
Gross profit margin GPM : it is also referred to operating profit margin. It is most common use with the objective of assessing the business model and financial health of company through revealing the remaining portion of money from revenues after deducting cost of goods sold.
Operating return on total assets ORTA : this matric most commonly provides better way of looking at the ability of the organization to generate profit returns from the principle or core activities since it does not involves other expenses including interest expenses not it includes marketable securities income, interest income or onetime extraordinary transaction.
Asset turnover: this measure is widely used in order to measure the ability of the company in generating sales from the fixed assets. Fixed assets turnover : it is supposed to be vulnerable to the asset valuation issue. It is most important ratio in companies which are capital intensive.
It is comparatively low importance for the companies with minimum need for capitals such as leased retail operations and wholesale distribution. In case an organizationis decreasing fixed asset turnover so it means that the production has been running at lower than capacity.
Current asset turnover: it measures the current asset level that is require for supporting sales. The collection time is measured by days receivables on credit sales. Days of inventory: it is the indication of how the company efficiently managing inventory. Financial leverage multiplier : it is the connection between return on equity and return on assets of an organization. It provides the way of looking at the relative equity and debt amount that has been using by company in order to finance the assets.
Current debt to equity ratio: it is the mix if the debt of an organization. In case of high current debt to equity ratio, it means that the company would be in problematic situation while paying its bills. Below are the available bulk discount rates for each individual item when you purchase a certain amount. Publication Date: July 01, Greenberg's article. The authors devoted seven years of research to studying the problem of the ineffectiveness of large numbers of salespeople.
They discovered flaws in the established methods of selection and revealed the two basic qualities that any good salesperson must have: empathy and ego drive. Empathy, in this context, is the central ability to feel as other people do to sell them a product or service; a buyer who senses a salesperson's empathy will provide him with valuable feedback, which will in turn facilitate the sale. The authors define the second of the two qualities, ego drive, as the personal desire and need to make the sale--not because of the money to be gained but because the salesperson feels he has to.
For sales reps with strong ego drives, every sale is a conquest that dramatically improves their self-perception. In the dynamic relationship between empathy and ego drive, each must work to reinforce the other. Why did the executives that Mayer and Greenberg studied continue to hire salespeople who did not have the ability to perform well? The companies were hindered in the preselection process by flaws in the prevailing forms of aptitude testing. Test takers could easily give answers they knew the test givers wanted to hear, in part because the tests sought to identify particular psychological traits rather than the personality type most capable of selling.
If you'd like to share this PDF, you can purchase copyright permissions by increasing the quantity. Greenberg ,. By seeking these deeper, more central, characteristics, we immediately reduced the possibility of faking, since the respondent would find it extremely difficult to determine what in fact was being sought. Needless to say, the importance of interest as a variable has been reduced sharply, and the conformity factor has been completely subordinated to the basic central characteristics being measured.
This use of central dynamics rather than traits, with its corollary implications, has produced what we believe to be a positive method of predicting sales success that is advanced beyond what has been done to date. Many sales executives feel that the type of selling in their industry and even in their particular company is somehow completely special and unique.
This is true to an extent. There is no question that a data-processing equipment salesman needs somewhat different training and background than does an automobile salesman. What is not so easily seen, however, are the basic sales dynamics we have been discussing, which permit an individual to sell successfully, almost regardless of what he is selling.
To date, we have gained experience with more than 7, salesmen of tangibles as well as intangibles, in wholesale as well as retail selling, big-ticket and little-ticket items. And the dynamics of success remain approximately the same in all cases. Sales ability is fundamental, more so than the product being sold. Long before he comes to know the product, mostly during his childhood and growing-up experience, the future successful salesman is developing the human qualities essential for selling.
Thus, when emphasis is placed on experience, and experience counts more than such essentials as empathy and drive, what is accomplished can only be called the inbreeding of mediocrity.
We have found that the experienced person who is pirated from a competitor is most often piratable simply because he is not succeeding well with that competitor.
He feels that somehow he can magically do better with the new company. This is rarely true. He remains what he is, mediocre, or worse. What companies need is a greater willingness to seek individuals with basic sales potential in the general marketplace. Experience is more or less easily gained, but real sales ability is not at all so easily gained. Among butchers, coal miners, steelworkers, and even the unemployed there are many—perhaps one in ten —who, whether they themselves know it or not, possess the ability to be an A, top-producing salesman; and at least one in five would be on a B or better level for most types of selling.
Many of these are potentially far better salesmen than some who have accumulated many years of experience. We reported that he was the only A in the group, and strongly recommended that he be hired. There was shocked silence at the other end of the telephone. We were then told that his test had been included as a joke. As it was described to us, he had ambled into the showroom one morning wearing dungarees, an old polo shirt, and sneakers. The man had never sold a car or anything else in his life and had neither the appearance nor the background that would indicate that he ever could sell anything.
Obviously, most men down from the hills wearing dungarees and sneakers are not going to be top salesmen. Some, however, may be, and their lack of experience in no way reduces the possibility that they have the inner dynamics of which fine top producers are made. Putting emphasis on experience often works in another way to reduce sales effectiveness.
Such men may be doing a satisfactory job where they are. For instance: A western company in the leasing business wanted us to evaluate a branch employing 42 men to determine why there had been a mediocre level of sales activity, why there had been some difficulties among the men, and whether some of the 42 should possibly be let go.
Virtually all the men on the staff were found to be worth keeping on, but a good third were suggested for job shifts to other departments. Thus, the person with greatest sales ability, together with a great deal of managerial ability by no means the same thing , was found in the accounting department.
But that job did not completely satisfy him. He has since become the new branch sales manager, a more appropriate use of his considerable abilities. One of the older men, though rated an adequate B salesman, was evaluated as an A office manager. He had good empathy, but not the strongest ego drive, which was why he was a B rather than an A salesman.
But on the managerial side, he had the ability to handle details, relatively rare for a salesperson; he was able to delegate authority and make decisions fairly rapidly and well. These qualities, plus his good empathy, gave him excellent potential as a manager, but not as sales manager, for his only moderate drive would have hurt him in the latter position.
As office administrative manager, the position he was moved up into, he has performed solidly. The former office administrative manager, a man well able to handle details reliably and responsibly, but with little empathy and thus unable to deal understandingly with his office staff , was moved laterally into the accounting department, an area in which he had had some previous experience, and where he could carefully deal with and manage details rather than people.
Each present employee, as well as each new applicant, should be placed in the area where he can be most creative and productive. Each one will need training. Companies have spent very large sums of money in developing effective training programs.
When they are working with a man with potential, these training programs can and do bring out this potential and develop an excellent salesman. Without sound training, even A-level salesmen are seriously limited. Yet how often have men gone through long and expensive training programs only to fail totally when put out into the field? When this happens, the trainer, and perhaps the training program itself, is blamed and sometimes even discarded.
The most skilled diamond polisher, given a piece of coal, can only succeed in creating a highly polished piece of coal; but given the roughest type of uncut diamond, he can indeed turn it into the most precious stone.
Here is a case in point: About three years ago, a company in the Northeast installed an especially fine training program, in which a great deal of money was invested. At the end of two years, the results of this program were appraised. It was found that sales had not increased beyond what might normally be expected in that industry during that period of time. The investment in the training program seemed to have been a total waste. The entire training program was therefore dropped.
Six months later, we were asked by management to test and evaluate the present sales force and to try to determine why the training program, so highly recommended, had failed so badly. The reason was immediately apparent. Out of a sales force of 18 men, there was only one rating A, and his sales actually had improved after the training program. Two others were B-level salesmen, and they too had improved to some extent with training. They simply did not have the potential of good salespeople.
They were rigid, opinionated, and for the most part seriously lacking in empathy. This type of man rarely responds to training, no matter how thoroughgoing the program. The role of training is clear. It is vital. Efficiency in training, using the best of modern methods, is necessary to do this.
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