The Practice of Management

What is our business?-and What should it be?

Preface

As a leader of English Club Generation 6, I was asked to do an assignment-book review and

presentation, to prove that I have enough ability in structure, reading, writing and speaking to get a
certificate from US Embassy. I though how lucky I was. I am good at summarizing and I am ok with
presentation, but I was thinking about my topic I was going to do, if it is easy or not and interesting or
not.

Two months in advance, I received the topic. It was The Practice of Management: What is our
business? - And What should it be? Firstly, I thought that it was not interesting, for a high school
student like me and I am not interested in business. I thought that business is simple and very easy to
do and succeed, but it is not what I was thinking. It became harder and harder to understand from one
paragraph to another, so I started to work harder trying to understand one by one just wanting to pass.
The more I try and the more I focus, I started to understand how wonderful it is to do a business and
how complex it is to succeed. I learned a lot of things about business. I know: why doing a business?
How to do it? How to succeed it?...etc that business people I know today dont know about those
things, but rich people and millionaire. It has changed my perspective in business that I used to thing
that employer lead people to be rich, but business does not only leads people to be rich men or
millionaires , but also leads country to be rich in economics too. Again, I was so lucky that I could
became a part of English Club Generation 6 ,leaning a lot of things as a leader and I got a good
chance to figure out about the business.

Of course, my little book cannot compared to the original, but I just believe that reading my book
after the original one will helps you understand more about some point you may not clear. I
summarize this chapter for Cambodian learner, so you may found it easier to understand briefly.
However, nothing is perfect!

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 The Practice of Management
What is our business?-and What should it be?

Acknowledgement

In this special occasion, I am pleasure to acknowledge those who made this little book
possible existed. First, I would like to thank US Embassy with best cooperation of University of
Management and Economics Battambang for providing a very special library, American Corner.
American Corner has provided a lot of knowledge through a lot of free services for learner such as
reading and borrowing thousands of great documents, doing research on fast speed Internet, TV lab,
workshops,, and two special classes; English Club and Book Club. With English Club I learn a lot
of things as a leader. English Club teaches me to be braver, more confident, more organized, more
open-minded and stronger in leadership. It helps me defining who I am, what I can do and what I
dont know.

Second, I would like to show my gratitude to Mr. Samarth, the coordinator of American
Corner, all staff working here: Miss. Reksmey, Maly...and with special thanks to Miss. Sieklay. Mr.
Samarth, thank you for your hard-working organizing this unique library and your delightful advices
for everyone. Without you, I believe American Corner would not run smoothly like today. Miss.
Sieklay, thank you for your closed and special assistance for my club. Without you as a former and
pass your good experiences, I dont know what to do and how to solve the challenges I faced from 4-5
pm week-days. Moreover, I prefer to thank Mr. Mothpheap, Mr. Di Votha , Mr. Kim Piseth, and Mr.
Kanhouth for your meaningful and brilliant speech as the guest speakers. You have spent your
valuable time participating with American Corner and your sacrifice really make American Corner
become more special and impressive.

Third, thank to my partner and all my members for working and spending time with me for
almost five months, for respecting me and teaching me to understand the feeling of a leader and
members.

Last but not least, I want to show my deepest gratitude to my lovely parents for their care,
encouragement, mental support, financial support and unconditional scarify.

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 The Practice of Management
What is our business?-and What should it be?

Contents

I. Preface... 1

II. Acknowledgement . 2

III. What is our business?.....................................................................................................................4

1. Who is the customer?............................................................................................................... 5

2. What is value to customer?...................................................................................................... 6
3. What will our business be?....................................................................................................... 7
4. What should it be?

IV. Reference.. 8

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 The Practice of Management
What is our business?-and What should it be?

What is our business?-and What should it be?

What is our business? is an important question for the one who want to run a successful
business to ask himself or herself. A lot of people misunderstand of how easy to answer this question,
but actually it is a very difficult question ; not easy and not obvious to answer. In order to answer this
question correctly, business person has to do a hard-working and analysis, however this question is not
supposed to answer by the producer of the company or business. It is determined by the customers;
what do the customers think, see and believe in our products or services? So, if we want to run it
successfully, we should not only look at only at the business from the outside or market but also the
point of view of the customers. In addition, there need to be thoughtful, thorough and top management.
A correct answer of this question is the business that obtain realization and nationalization. Realization
happens is known or realized by the customers. Nationalization happens when a business is supported
by the community and nation. To make a business realized, company need to create customers
satisfaction, radical innovation , focus on both research and technical leadership and technical policy,
and the indoctrination in dedication to both employees and public relation. What is our business ? is
a big and complicate question, so to make it detail and easy to answer step by step, we have divided it
into 4 smaller question : Who is the customer? What is the value of customer? What will our business
be ? and What should it be?

what is our
business ?

Who is the What is value What will our What should

customer? to customer? business be? it be?

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 The Practice of Management
What is our business?-and What should it be?

Who is the customer?

To know what our business is, first thing to do is to ask who is the customer? and there are 6
more questions help us understand clearer about the customer so that our business is profitable. Who
are potential customer? Who are actual customer? Where are they? How do they buy? How can they be
reached? And what the does the customer buy? They help you to invest your time effectively in a right
business, right plan, right time and right target. In business, we divide customers into two groups:
consumers and contractors. Consumers buy the product in a small amount to use for themselves while
contractors are also doing a business. They purchase your products in a big amount and with cheaper
price than consumers; and they sell it in a higher price to their customers. To know where your
customers are, it requires a major analysis of both population-city or suburb, and market trend. To
reach your customers, salesmen and manufacturers agents are big part to responsible in this problem.
Usually, with contractors, we can reach them by mail or going out of central sales warehouses. There is
something we should know when we ask what does the customers buy?. Some customers buy the
product and some buy the service. Rich people who buy modern things, it is not the function that
products offer is their need, what they need is being famous using modern products. So , brand name
becomes important. And especially, keep in mind that, if a lot of people buy your products or service, it
does not mean they like your company or will always buy your company products, they only buy the
way or benefit that your product satisfies them. How about your business competitors has the products
which provide better benefit, what will it going on? So think clearly about what the customers buy and
make your products or service the best among business competitors.

who is the
customer?

Who are Who are

Where are How to they How can they
potential actual
they? buy? be reached?
customers? customers?

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 The Practice of Management
What is our business?-and What should it be?

What is value to customer?

What is value to customer? or what does customer look for when they buy? is seem to be
simple question, but it is the most difficult question to find out what is our business?. It helps you to
know what make a customer decides to buy a product. Usually, customers look for some value of a
product or service such as price, brand, product durability, freedom from break down, service, market
standing, puringetc. If we heard about the word price, cheap will comes up to our mind, but being
the cheapest product is a serious mistake. Dont think that all customer would buy the cheapest product,
only a small of them do. What they want is not the cheapest product , it is the cheap or reasonable
product in a well-known or popular brand name companies that make them buy. Different people value
the product differently; and people in different zone also value the product differently. So, what the
customers consider value is so complicate and varied that it is able to answer by the customers himself.
Management should not even try to guess, it should always go to the customers in a systematic quest
for the answer and then analyses it in groups.

Value the
customer look for
when they buy

product market service ......etc

price purity
durability standing

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 The Practice of Management
What is our business?-and What should it be?

What will our business be?

So far all question that are related to the nature of our business have been concerned with the
present, but management must also ask what will our business be? since a business does not succeed
so early. We should think about it at least in five years or ten years. Management should think of four
things: market potential and market trend, changes in market structure, new innovation and the lack of
customers want in our product today. How large can we expect the market in our business to be in five
years or ten years? What changes in market structure are to be expected as the result of economic
development, changes in fashion , taste, or competition? What innovation will changes the customers
want, concept of value and satisfaction? What wants or need will the customers have in the next five or
ten years that our product today does not offer? How should our product be upgraded? Should it be less
expensive? How much modern or beneficial our products will be? If we did not prepare for it, when
our business competitors born, we have nothing to fight with them since we havent study about the
changes in the future market, but they are doing. It is not about guessing, it is all about doing research,
critical thinking, inferences and analysis of the situation in society, economy and market.

And what should it be?

The analysis of our business is not yet completed. A last step or question to ask is what
should it be? or Are we in a right business or should we change our business?. A lot of business
people decided to reply to this question in three ways: the same, similar or entire different. Of course
people mind change every day through environment. Maybe today the business we are doing is very
popular or very profitable, but we dont know about tomorrow, maybe it will be the same or less
popular or no any customer. The answer of this question could become paradise of our business or
could be the hell, so management have to study carefully with enough evidences and then make a clear
objectives and plans .The are two considerations that management should take. They are productivity
consideration and profitability consideration. For productivity, we consider if new business are more
substantial, has higher profitable position or not. For profitability, we consider if new business offers
more profit or not. Certainly profitability consideration limits the business an enterprise might go into
and prevent management from pouring money and energy into ailing and declining business.

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 The Practice of Management
What is our business?-and What should it be?

Reference

-The Practice of Management

-Author : PETER F. DRUCKER

-Chapter : what is our business? and what should it be?

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