How to evaluate product and services.

1. In this fast growing competitive market managing an Organization successfully
and making it a profitable business is very difficult and challenging. In past years we
have evidence of Organizations which are unable to sustain in dried economic and
high competitive market therefore forced for either bankruptcy or sold out to some
other Organization, few Organizations which faced such situation are GM, Layman
brothers, PALM, Merrill Lynch, Border, Block Buster etc. But we also have evidence
of some companies which grew in faster space in the recent years, example- Apple,
Google, McDonalds, Wal-Mart, etc. So, do we see any difference in the business model
adopted by these Organizations? Why some Organizations grew in faster space then
others and why some of the Organization not able to sustain?
Though it is difficult to compare the Organizations directly as each Organization
runs and operates by different leadership and management, has different target market,
varies in product-line, etc. it means we don’t have any direct formula to make
Organization profitable and competitive in the market. So, it is essential to learn and
adopt some best practices, focus on customers and market demand, open to innovation
and creativity and at the same time control on budget and operating liquidity .

2. The four square approach is a combination of certain basic rules, standards and
learning from corporate world.
Approach-1: Using iterative SWOT analysis and creating action plan.
First measure to understand and evaluate one Organization is doing SWOT
analysis frequently and making it an iterative approach.
Organizations should periodically perform SWOT analysis and create matrix
of “Strengths”- internal strength of the Organization, “Weaknesses”- Weaknesses
which are needed to be rectified, “Opportunities”- evaluate the market and list down
the opportunities for the Organization and “Threats”- One of the crucial component in
this evaluation process, this will derive how the Organization wants to place itself in
the competitive market. The SWOT analysis should be iterative and must follow the
action plan the organization takes based on previous SWOT analysis. The SWOT and
action plan process should be repeated continually with lesson learned discussed and
evaluated periodically.
Approch-2: Understanding “BCG Model - SCDQ” [developed by Bruce Henderson
for the Boston Consulting Group]

3. Understanding and continuously evaluating products and/or services. This is
very crucial, every product and/or service provided to customer needs to be evaluated
to know how much revenue it is generating, how much value it is adding to the service/
product line, what is the future demand of the product, etc.
Categorize all the products and services into four sections:
i. Stars: The product/service which is unique and/or niche in its market place,
drives specific segment of customer group and generates high level of profit
with less production.
ii. Cows: The product/service which are essential but yet common, has less
production/service cost, most customers uses it, has low revenue margin but
highly sellable and has high market demand.
iii. Dogs: High cost in producing and/or providing service, need high maintenance
cost, diminishing market demand, not reaching the market properly, current
profit margin is just up to the break-even point and not generating enough
margin after taking the operating cost out of sales revenue. This may be
discontinued and may be replaced with some product from stars or cows.
iv. Questions: Product and/or services which are not generating profit, not works
as catalyst in selling other products and services, incurring loss to the

4. Organization, not much customer demand, product/service is not good
enough to compete in the market. United State Postal Service (USPS)- with
such high network and customer reachability still not able to generate profit,
If an Organization has star products (like Apple products), even though the products/
services has high cost still customer will see the value and not hesitate in spending
money for those products and services. Keep enhancing and updating the stars,
so that it will make the Organization as market leader in niche service/product line.
Remember Star products gives high expectation, so Organizations needs to be focused
on innovation and creativity to keep product superiority in the market. Example: Apple,
Whole Food, Boeing, etc.
If an Organization has Cow products and services, then it is targeting to mass
customers, be focused on serving the mass, keep producing and servicing in high
volume, keep the price competitive, make strong marketing team. Remember these
products has less profitable and at the same time incur less cost in producing and
servicing, so try to produce and sell more till it becomes a dog product/service .
Example of some market players those who have products/services like cows are-
Colgate, General Mills, Wal-Mart, etc.
If an Organization has Dogs, it means the products and services are not meeting
the expectation. The product may be not marketed properly or may have less demand
or reducing market demand, and the production and service cost is too high and can
manage generating the break-even cost, it is better to stop producing/serving unless
there is any major revamp plan or future market potential. Example: Nokia, Borders, etc.

5. If an Organization has product which falls under the category of question mark,
these products has high risk and high future potential, may need more cash burning
to make it operational. These products/services need extra attention, proper control
and great sells and marketing team to introduce the product to market and customers
in effective manners. These products have potential for high growth and may become
a star or cow. If the products in this category not emerged as stars or cows after
certain targeted months or years, it is better to discontinue investing in these products..
Example: Most of the research companies, alternative energy sector, etc.
Approach-3: Understanding dependencies.
Every product and/or service has certain market place. The market place is
very complex and has various different driving factors those influences market like-
necessity or usability of product/service, customers demand, competitor’s service and
products, etc. So to deliver quality and profitable product and/or service, it is essential
to understand market need and future expectation. Production/service team should
align with marketing and sales team. Marketing and Sales team are mostly customer
facing components, it is Marketing and Sales teams responsibility to update the market

6. condition and demand to production/service team, so that production/service team
work on delivering product/service in time and as per market need. So it is essential of
production, Marketing and Sales team to work together to create efficient coordination
and delivery strategy.
Approach-4: Quadrapole
So far we discussed three approaches, effectiveness of all the above three
approaches possible only when this last approach analysis is efficient and effective.
Just doing analysis will not make the products/services profitable. It all depends on
Organizations leadership who makes the decisions, the management team which
carries forward the initiatives and makes sure the efforts are meeting the expectation,
and the employees- one of the most important part of business success who directly
gets involved in implementation and delivering the product and/or service. So to make
the process effective, it is essential to create small milestones and evaluate the process
in a regular interval. Do brainstorming and lesson learned after completing each
milestone. Other important factor which need careful analysis is the information flow-
steps should be taken to evaluate how effective the information flow, how satisfied
employees at his/her level. To bring Leadership-Management-Employees into sync it

7. is necessary to evaluate Organizations culture regularly to make sure each and every
individual adhering Organization culture and values and working up to their potential to
make a successful Organization.
Though there is no single direct single mantra available in making an
Organization successful, the above are few approaches which may help in creating
successful and profitable Organization.