Notes on the 100 Laws
The Laws of Business
20.
The law of Purpose : The purpose of business is to create and keep a customer.
- Profits are a measure of how well the company is fulfilling its purpose.
- Profits are a cost of doing business, the cost of the future.
21.
The law of Organization : A business organization is a group of people brought together for the common purpose of creating and keeping customers.
22.
The law of Customer Satisfaction : The customer is always right.
- If ever the customer seems wrong, refer back to the rule.
- All customer satisfaction comes from people dealing with other people.
- The best companies invariably have the best people.
- The key role of management is to achieve the maximum return on investment in human resources toward satisfying customers.
23.
The law of the Customer : The customer always acts to satisfy his/her interests by seeking the very most and best at the lowest possible price.
- Customers are both demanding and ruthless; they reward highly those companies that serve them best and allow those companies that serve them poorly to fail.
- Customers always behave rationally in pursuing the path of least resistance to get what they want.
- Proper business planning always begins with the customer as the central focus of attention and discussion.
24.
The law of Quality : The customer demands the highest quality for the very lowest price.
- Quality is what the customer says it is and is willing to pay for.
- Quality includes both the product or service and the way that it is sold, delivered and maintained.
- Companies are profitable in direct proportion to their quality ranking, as customers perceive it.
25.
The law of Obsolescence : Whatever exists is already becoming obsolete.
- Tomorrow will be different from today.
- Continuing innovation and improvement are essential to survival.
- The best way to predict the future is to create it.
26.
The law of Innovation : All breakthroughs in business come from innovation, from offering something better, cheaper, faster, newer or more efficient in the current marketplace.
27.
The law of Critical Success Factors : Every business has a number of key success factors that measure and determine its success or failure.
- Each individual has personal critical success factors, the performance of which determines his/her business future.
- Your weakest critical success factor determines the height at which you can use all your other skills.
28.
The law of the Market : The market is where buyers and sellers of products and services meet to set prices and determine the allocation of money, labor, materials, and all factors of production.
- In a free market, resources will be allocated with complete efficiency and prices will accurately reflect supply and demand to that moment.
- The free market is the most efficent way for millions of people to have their needs met at the lowest possible cost.
- The freer the market is from government interference, the greater the supply and veriety of goods and services and the greater the prosperity of the people.
29.
The law of Specialization : To succeed in a competitive marketplace, a product or service must be specialized to perform a specific function and be excellent at satisfying a clearly defined need of customer.
30.
The law of Differentiation : A product/service must have a competitive advantage or an area of excellence that enables it to stand out from its competitors in some way if it is to succeed in a competitive marketplace.
- The determination of a unique selling proposition is the starting point of all successful advertising and sales.
- To succeed in the marketplace, a product/service must have a distinct advantage, something that makes it superior to competing products and services.
31.
The law of Segmentation : Companies must target specific customer groups or market segment if they are to achieve significant sales.
- Many companies fail because they are targeting the wrong market with the wrong product in the wrong way.
- The ideal market segment contains those customers for whom the product's competitive advantage is the most important in satisfying their most pressing needs.
32.
The law of Concentration : Market success comes from concentrating single-mindedly on selling to those customers you have segmented as being the ones who can most benefit immediately from the unique product/service features you offer in your area of specialization.
- The best high-profit strategy is dominate a specific market niche with the best product available for those customers in that niche.
- Concentration on high-profit market segments with high-profit products and services gives the highest return on sales, return on investment, and return on equity.
33.
The law of Excellence : The market pays excellent returns and rewards for excellent performance, excellent products, and excellent services.
- The market pays average rewards for average performance and below-average rewards for below-average performance.