The right way to plan the business is to start from the customer

Ateneo Professor on Entrepreneurship

This has been an oft repeated dictum in market oriented business - to start from the customer.

One of the things I learned from operations and SCM is that the start and the  end of supply chain and logistics is the customer.

However, most businesses start with the production/or what the owner has, and in the end they miss entirely the market and fail.

Look at these examples:

l.  Japanese car manufacturers start with price points and what the customer want using the House of Quality.   Or even reverse engineered the product to meet what the customers want.  That is why during their heyday, the Japanese came out with  many product winners.

2.  The Air Asia would enter the Indian market with the idea that its boss Tony from Malaysia who interviewed Indian train commuters who spend 4 to 6 hours commuting.  He asked the commuters how much they are willing to pay for a plane ride that would  take only an hour?  And then he asked his executives how this could be done.  Would Air Asia be successful in India?  You bet.

3.  The same holds true for Cebu Pacific;  they started out with the price point of a roro bus ride that takes 24 hours.  How much would they pay for a plane ride that takes only one hour.?  So in the beginning they competed with bus rides, not the ferries.

4. Dr. Devi Shetty in planning for NH hospital made sure that the heart surgery could be affordable to most Indians who live on wages of less than $2 per day.

But most of the time we are enamored with the product, its production, and forget about the customers.

This would take a lot of discipline to always remember that.