Q4) What else could Matt have done to research this opportunity?
Ans 4) Generally research for a business needs to be intense and thorough. Every business has risks associated with it and research is designed to reduce those risks so that entrepreneurs can make better and informed decisions about their business.
Research for business activity should cover many different elements. These can be classified into:
General Macroeconomic conditions-Macroeconomic trends can have a significant impact on the business community, the success of many businesses can depend on how well the macro economy is performing
Competition-This is an extremely important of research, because it helps the entrepreneur assess may elements about his business. It lets you in about the viability of the business, what kind of pricing to implement and to identify niches where competitors have not yet made inroads
Customer-It is important to identify the market size and also to analyze this market to get a sense of what they want and expect from the business. For this it is important that even with limited resources an entrepreneur has some idea of who his or her consumer in terms of demographics and psychographics.
Production and Manufacturing-Research on who will make the product and how much will it cost
Suppliers-It is important to get an idea of the reliability of the suppliers, the kind of dealings they are comfortable with, for example is credit acceptable or is it cash up-front. Are the suppliers few and powerful or many and therefore less powerful
Matt has researched the business quite thoroughly, his business education and his test marketing both adding a great deal to his knowledge.
The case study does not identify any study of the macroeconomic environment; however Matt’s research reveals that the number of runners has actually increased over the past year. However an interesting point that Matt should have been researched further is how an economic recession will affect these events. The issue here would be basically about who is sponsoring the races and how will they get affected by the recession.
Matt’s research in the production and manufacturing element of the business seems to be limited to one person. This is probably because of the time shortage he is facing. He should explore other publishing companies to see whether he can get a better deal than the one he is getting.
In Matt’s business model the customer’s are the event management companies paying the bill for the magazine, while the runners are the consumers. Matt knows enough about both parties, his test issue helping him understand the event managers.
Before he developed his plan Matt also talked to runners about where they got information about events from. He also himself was an ardent consumer of a similar magazine in another part of the country. However perhaps before he expands he needs more research on what advertisements would be acceptable to runners in such a publication. This will be an important part of his actual publication because greater expansion would mean greater costs which would need greater advertising revenue to cover it.
Matt should also research more into the distribution element of his business. Either this has not been thoroughly researched by him or the case study does not cover it thoroughly. Again his research here is inadequate. In all the model is well thought out and specially the alliance with ‘Coolrunning.com’ bodes well for the business, however slightly more detailed research would be needed in some areas before the business takes yet another step to growth.
‘Matt Grant’ Arthur M. Blank Center for Entrepreneurship Babson College