The purpose of the business
- Enterprises are created and managed by people, not by "economic forces".
- We cannot define or explain a company from the perspective of profit alone.
- The purpose of an enterprise has only one correct and effective definition: "creating customers". (Drucker believes that the purpose of an enterprise is to create customers. In fact, it means that we usually have our own needs, but we don’t know what we really need until the manager creates the product and the user sees the relevant Advertising, I know "Oh, this is what I want". It is the customer that determines what the company is, that is to say, the company produces the corresponding products to meet the needs of customers, and makes money by satisfying the needs of customers. "For only when customers are willing to pay for goods or services, can economic resources be turned into wealth and goods into goods." This is a bit similar to what is written in Capital, that is, the things produced by enterprises, Someone has to buy it, and change from commodity to currency in order to reproduce and operate.)
The main function of the enterprise
- Marketing
"50 years ago, the general attitude of American business people towards marketing was: "Whatever the factory produces, the sales department sells it. "Today, everyone's attitude has increasingly changed to: "Our duty is to produce products that the market needs. "But our economists and government officials have just begun to understand this concept." In fact, the concept is the same as the current concept. Most of the requirements of product managers are handled by project managers, so the requirements raised by project managers are also Based on my familiarity with the business and the constant communication with customers, I have seen that many product managers and many functions are contrived by themselves. As a result, the products made cannot be implemented at all, especially for us. In the field of public utilities, if you can't make it to the ground, no matter how beautiful and fancy you make, you can't satisfy customers.
"To fully understand the importance of marketing, we must first overcome the society’s deep-rooted prejudice against "sales"-thinking that sales are a lowly parasitic behavior, and that "production" is regarded as a gentleman’s activity, and this leads to a fallacy inference. Production is the most important and critical function of a company.” I also often see this kind of situation. Many company employees or managers sneer at salespeople (I don’t understand. Without sales colleagues, how can our company make money? Who pays you?) - Innovation: To provide more and better products and services "It is not enough to provide products and services. You must provide better and more products and services." "Enterprises must master the resources to create wealth in order to achieve the goal of creating customers. Therefore, one of the important management functions of an enterprise is to effectively use all wealth-creating resources. From an economic point of view, it is called productivity."
The function of profit
- "Profit is not the cause, profit is the result-it is the performance result of the company in terms of marketing, innovation and productivity. At the same time, profit is the only possible way to test the business performance of the company." It is the mule that is drawn out for a walk, not just talking about it. , Talk about how successful the reform of the enterprise.
- "Profit has a second equally important function. Economic activities always focus on the future, and the only thing we can be sure about the future is its uncertainty and the risks involved."
- "The primary task of a business is to survive. In other words, the guiding principle of business economics is not to pursue maximum profit, but to avoid losses. The business must try to earn additional funds to be able to bear the inevitable risks in business operations. The only source of this risk reserve is profit."