BY DR. TANAI CHARINSARN

JULY 6, 2016

‘Success in Business’ The words that inspire dreams... Where are they truly measured?

The popular phrase that everyone, including businesspeople and entrepreneurs, often uses when it's time to give interviews or express their vision to the public, the media, or even their own team, is inevitable. The desire for success in their own business endeavors is something that cannot be avoided. When considering the same business, what can one do to achieve more success than others? And what is the measure of success in the global business world that many people dream of?

Definition of Successful Business

Profit Increasing or Decreasing: Is it Measurable?

Whether profit increases or decreases depends on various factors, both controllable (internal) and uncontrollable (external). Therefore, discussing business profits can be challenging, as it can result from superior management skills or simply luck.

Example 1: Thai Automotive Business in 2012 

The government's support for the "first car policy" had a significant impact on the profits of car companies. These companies did not introduce any significant innovations or competitive advantages; instead, they benefited from government policies.

Example 2: Flooding in 2012 

The flooding situation in Thailand affected various businesses, reducing their profits. This drop in profit was not necessarily due to poor management or price increases in response to rising demand for water. It is rather a result of external uncontrollable factors.

In summary, determining business success is not straightforward. The most commonly used metrics include:

1. Return on Invested Capital (ROIC): It's more critical when compared to competitors. It measures the ability of a business to generate profit concerning the amount invested.

2. Revenue Growth: Most people are concerned with measuring business success through revenue growth. However, this growth should be driven by profits generated by the business itself and reinvested for growth.

3. Sustainable Business: Sustainability is a key element of business success. To achieve sustainability, a business should focus on its core competencies and be in sync with market trends.

To achieve true business success, companies should evaluate and align their strategies based on their unique characteristics, taking into account their abilities, market dynamics, and global trends.