Three basic CHECK POINTS for entering into any business is Need, Time and Money. The Money or the Capital is the basic requirement for getting into a business and second is Need (Market Demand) for the product or service and the third most important that many companies fail to pay attention is the TIME. Most often Time of entry is not given enough attention or there is ignorance among the entrepreneurs to focus on this area.
Broad classification of the time of entry strategies involve
First Mover advantage
A firm which takes the initial competitive action to enter into the market to do a business in the geographic zone or in delivering a product or a service is called a first mover. The benefits enjoyed by the first mover are called first mover advantage. The firm can earn better revenue margins and earn the customer loyalty in a shorter span of time, but there are higher risks involved with new technology and new market.
Second Mover advantage
A firm that responds to the first mover’s action through imitation or adopting the same strategies to enter into the market with more insights from first mover’s success and failures is called a second mover. The second mover enjoys benefits in playing a safer game from the failures of first mover in knowing the technical flaws and can concentrate on R&D. The disadvantage is the second mover will take a longer period to gain customer loyalty. This is called learning curve effect, where the second movers learns from the experience gained by the first mover, and has better knowledge of customer expectations. This is called second mover advantage.
The article focuses on the raise in Inverter sales in Tamil Nadu and revenue to the distributors and dealers have gone up to 100%. Dealers have reported that they had 80% increases in the sales from January to February. The increased power cuts in Tamil Nadu have resulted in many new comers to enter into Inverter business and take up distributorship and dealership. The power crisis has become a boon to the inverter manufacturers to increase their production in their units. The March-April month is crucial time for the students because of their annul exams and the power crisis has led to overfull demands and the waiting period has increased to few weeks in many places.
This in turn increased the sales of high end batteries and companies started increasing the production of high end batteries which have higher durability and can run for longer hours. There are even 10-12 hours of Power cut in certain parts of Tamil Nadu, where people are forced to buy inverters, as summer is approaching very fast. The major inverter players in the industry are Microtek, sukam, hykon, okaya, Usha Lexus etc. Many new players are expected to enter into the market in another few months as the situation in TN is expected to worsen still more because of the delay in Koodankulam project.
The bad time for Tamil Nadu people where normal routine is affected due to power crisis has become a good time for the people to enter into a new business. People who have taken dealership very recently have taken their break-even with 6 months of the start of their business. Break-Even point, is a situation when the companies attain a No profit – No Loss situation, i.e. the initial costs are recovered and the when the company is expected to take profit after a point. This is called Break-Even point.