Question

13. Briefly discuss the most common mistakes managers make and how they affect economic profit. Support your points with facts from the readings.

Answer 1

• Managers focus on money rather than people - customers and employee ate the most important ones in a business. Focussing more on money leads to failure and unsustainable business practices. Eg of successful businesses that concentrate more on people than money are google.com,zeppos.com etc.
• Managers do what they know, rather than what to do: that is managers so not try new innovations, because of insecurities and they do not want to come out of their comfort zones
• Managers often divert resources from successful products to use it for unsuccessful ones for political or other non productive reasons. By doing this they are neglating the needs of the target audience and investing on what they think is right, which drastically affects their economic profits.
• Managers usually target the wrong audience which also leads to failure of economic profits.
• Managers fail to achieve uniqueness in their branding of products. This leads go fall in economic profits as the company will have many competitors and competitive disadvantage. For eg: Apple company is still successful because ,if we want some apple products, we must buy them from apple distribution channels only not anywhere else.
• They focus on selling more products rather than focussing on benefits. Therefore ,less successful companies focus on the features of products rather than their benefits.
• Managers so not make use of the customer complaints to improve their business. Complaints are the signals that should not be ignored as they heavily impact on the economic profits of a company