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What Are the Advantages and Disadvantages of Focusing on the Demands of Current Customers?

Essay by   •  February 9, 2015  •  Essay  •  334 Words (2 Pages)  •  2,064 Views

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What are the advantages and disadvantages of focusing on the demands of current customers?

Bug Labs want to create modules to attract buyers. However, the modules were very expensive to design and develop as "new modules cost an average of tens of thousands of dollars from proposal to the production". There are different advantages and disadvantages of focusing on the demands of current customers. If they focus on the demands of current customers rather then doing their own market research, straightforwardly, they can decide the modules that they should develop. This is an important advantage for them because of the limited capacity of their development team. They can only manage few projects at a time and each project need a fixed number of sales to amortize development costs. Another advantage of depending on customer's demand is that Bug Labs will know their customers needs easily. However, it is hard to satisfy all the customers demand.

Depending on the customers demands business allows Bug Labs to focus on limited number of modules, so they can specialize on particular modules. It could be a good advantage but also a disadvantage for Bug Labs. They want to be niche player in the market. Thus niche player should provide solutions for the entire market. Specialization on few solution modules may restrict its role. If they only focus on the customer demands, they will not be a niche player in the market.

What are the advantages and disadvantages of using qualitative screening questions to make project decisions?

Bug Labs generally used qualitative project selection methods. The main advantage of using such method is that it gives a good perspective of the project as the screening questions look at this project from different point of view. On the other hand, the screening questions won't be enough to arrive to an investment decision. Therefore, Bug Labs should use both quantitative and qualitative methods in order to take their decision. They should have screening questions that require quantitative analysis in addition to qualitative responses.

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