Dimensions of the business or approaches of the business
There are two types of business
1. Single business company: if a business produces only a line of product then it is called a single business company. For example, at the time of introducing in the market, square was single business company because at that time it only produced medicine product. There are three dimension of defining target single business company..
a. Who is being satisfied? For defining the business at first the firm should select the stakeholder whom to satisfy. Business has to satisfy inside and outside claimant of the business. If a business cannot identify that whom to satisfy then these unidentified stakeholders may create problem for your company.
b. What is being satisfied? The company has to determine the needs of stakeholders. But need is a vague term. Needs can be varied from person to person. For a business, it is essential to differentiate the need. For example, in extracting mining coal people have no objection if it is not harmful to the society. So here the expectation is safe environment. And investors expect good return.
c. How are the needs being satisfied? There are many ways to satisfied need. For acquiring different types of need, different type of technology is used. So, technology is very important to satisfy the target need. Different technological setup is required to satisfy the needs of different target group.
The main theme of single business is customer/market based not the product base. Because, product needs to change with the change of customer preference, so when the customer preference is changed, then the product must be changed. For every single business transaction, customer is important and with the preference of customer product is used.
2.Multi business company: if a company possesses several business units and controlled by a central unit then it is called a multi business company. Multi Business Company has several product lines in the market. For example, square is multi Business Company because it has several product lines like, square hospital, square toiletries, square medicine, square consumer products etc. They define the business in two levels;
a. Business level: In the business level Multi business follow the business of single business. That means it follows product market approach. Company will produce according to the needs and wants of the target markets.
b. Corporate level: In corporate level portfolio approach is followed. It is the recognition of various businesses. In corporate level of business three issues are considered;
i. Purpose of the portfolio of business: Separate business follows separate strategy and unique control system for their business so that their objective is also different. Different business has different marketing mix, different profit target achievement etc.
ii. Desired scope of portfolio: Scope of portfolio is the gap analysis to plan for new business. If it is not possible to achieve the organizational goal through the existing business then that business has to search for new business arena.
iii. The balanced desired between businesses in the portfolio: it is not desired that some business unit will earn huge profit and some will very little. Profit earnings ratio of all business units should be balanced.
