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Managing a Business/managerial economics


You have been recruited as a consultant to assess the viability of opening an upscale specialty shop for women’s clothing. The firm employing you intends to carry exclusively name-brand designers. Should you determine that regression analysis may be beneficial in addressing this question, what type of data and variables might you use to estimate the potential profitability of a new entrant in this market?

Hello Zaman,

Certainly regression analysis is one tool that could be used, however, it relies on complete and robust data. If the data is incomplete or questionable it will yield misleading results. My suggestion would be to go through the typical questions involved in developing a business plan. As this is a go/no-go decision, the formal business plan need not be fully developed, but the questions will all be addressed in following a typical retail business plan format. There's plenty of software available to help with the process.

The other tool I would use is the Porter's Five Forces Analysis. This would be a great adjunct to the business plan and help provide clarity into the decision. There's a great deal of information available online to facilitate the use of the tool.

Lastly, to the extent that you can, test the market/concept. Find a small group of people that fit the target customer and invite them to a short lunch or dinner to discuss the concept and get feedback. You can also develop a quick survey using Survey Monkey. The point is direct consumer feedback any way you can get it will be helpful. This shouldn't be a case of build it and they will come, it must be find out who will come, then build it.



Managing a Business

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Ken Tasch


My business and management expertise covers: Strategic Planning Business Operations Marketing/Sales/Business Development Manufacturing Engineering


I've started multiple businesses and managed others businesses, as president, in my 45 year career. I've worked for large multi-nationals as well as small businesses, both public and private. I've written an eBook on business capture management which can be found on my Web site: I am finalizing a general business book which I plan to publish this year. The book is an encyclopedia of business information.

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BSME Mechanical Engineering Non-degree graduate work at the Thunderbird School of Global Management

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