There is no business in which the ultimate goal isn’t to make a profit if you will agree with me. However, the fact is that there are different strategies for making a profit in business based on experience, exposure, research, and findings.
Textbooks sometimes define business strategy simply as a firm’s high-level plan for reaching specific business objectives. Strategic plans succeed when they lead to business growth, a strong competitive position, and strong financial performance. When the high-level strategy fails, however, the firm must either change its approach or prepare to go out of business. – Building the Business Case
The strategies for making profits in business will be categorized into two parts
Jumia: An Example
Jumia as an example, as for the group of companies such as Jumia, some people can say or perhaps may be told that the above company does not make a good profit, Nevertheless, To Some extent, I understand the point of view on the note that jumia do not make profit from the goods and services that are sold under its platform, but still no company or so-called none profitable business or organizations do not have one means or another to make a profit. The question now is where and how do Jumia make it profit?
The Business Strategy
These strategies I could call the large number and the small number of quality
Large Number Of Quality (LNQ)
To some companies, profit may be raised or made based on the quality (large)of the number of customers, whereby a company sells at the actual price from the manufacturer to their customers, making little profit from the product sold. It could be a profit of 1cent on each product, the logic now is if the 1cent is multiplied times the number of thousands and millions of customers patronizing the company per day, week or month. In a north shell, the company have more interest in the number of customers who purchase there good and service not the profit made one one item sold. Example MTN VTU / Data vendors or retailers.
Small Number Of Quality (SNQ)
This is the opposite direction of the first strategy, while the other sells at a cheap with little profit margin the latter sells theirs at a scary high price. However, the most notable and most important thing is that both strategies work well in making profit.
10 Advantages And Disadvantages of The Business Strategy of a Small and Large Number Quality
There are no business strategies without merit and demerits. Since both are in pursuit of one goal, to make profit.
The merit and demerit or advantages and disadvantages of these strategies are:
1. Both are aiming at making profits
2. While the large number of quality focus on it large number of customers, the small number of quality does not
3. The small number of quality could make a huge profit on one customer. A large number of quality can not.
4. They can both rank at the same profit margin.
5. The large number of quality focus more on its total customer base as its strength. The small number quantity focus more on it profit on individual customers.
6. Both companies could be a Governmental Organization or Non Governmental Organization (NGO)
7. Both companies could have a strong database but most times a large number of quality has the strongest database.
8. Large number of quality has a better chance of getting referred.
9. Large number of quality are more creative.
In conclusion.Some companies are not interested in making huge money from one customer. They are only interested in creating trust between both parties, to convenience their patronizers to stay and refer other people to them (so as to come back to patronize them).
They work with large number of customers to get times 2 to times 10 the amount of what other companies are making as profit.