Here is some insight from Drucker. "What is our business focuses on defining the Mission of the business. And the first and most critical question to be asked in defining the Mission of the business is, "Who is the customer?" Drucker adds, "That there are usually two or more types of customers for a business. As an example, for a business involved in branded consumer products, the grocer is one customer, getting shelf space in his stores, and the housewife is the other customer, will she buy your product when she is in the store? Each customer defines a different business, has different expectations and values, and buys something different."

Therefore Drucker continues, "We need to look outside from the point of view of the customer and market. Any serious attempt to state, "What is our business?" must start with the customer’s realities, his situation, his behavior, his expectations and values. To satisfy the customer is the Mission and Purpose of every business." Other key questions that also need to be answered include;"Where is the customer?" and "What does the customer buy?" It should be noted that we added "to retain and grow customers" to Drucker’s definition since it is important to recognize that it is estimated to cost five time more to gain new customers than to retain existing customers.

What Will Our Business Be?

In your meeting, Drucker now turns to the second important question you have to ask, "What will our business be?" Drucker points out that this "aims at adaptation to anticipated changes. It aims at modifying, and developing the on-going business." Drucker goes on, "There are four major factors that will determine what you business will be. These are:

Market Potential and Market Trend
Changes in Market Structure
Innovation
The Consumer."

Drucker expands on these four factors with some additional insight and other questions for you to answer.

Market Potential and Market Trends

- "How large can we expect our market for our business to be in five or ten years assuming no basic changes in market structure or technology?
- What will be the factors that will determine this development?"
- If Drucker asks you to answer the above questions. How would you respond?

Changes in Market Structure

- - "What changes in market structure are to be expected as of the result of economic developments, changes in fashion or taste, or moves by competition?"
  - If Drucker asks you to answer the above question. How would you respond?

Innovation

- - - "What innovations will change the customer’s wants, create new ones, extinguish old ones, create new ways of satisfying his wants, change his concepts of value or make it possible to give him greater value satisfaction?"
    - If Drucker asks you, "What innovations are taking place in your industry?" How would you answer him?

The Consumer

- "What wants does the consumer have that are not being adequately satisfied by the products or services offered to him today?"
- If Drucker asks you, "What consumer wants are not being satisfied in your industry?" How would you answer him?

What Should Our Business Be?

Drucker continues by asking the question, "What should our business be?", which involves developing a Vision for the future. One does this by answering the following questions:

What changes in the environment can be observed that have an impact on characteristics, Mission, and Purpose of the business?
What opportunities are opening up or can be created to fulfill the Purpose and Mission of the business by making it into a different business?
How to build these anticipations into the Theory of Business, into objectives, strategies, and work assignments?
The market, its potential, and its trends are the starting point. Changes in demographics (population shifts) are the only events regarding the future for which true prediction is possible. Management needs to anticipate changes in market structure, fashion or taste and moves from competition. Also, which of the consumer’s wants are not adequately satisfied by the products or services offered him today?"

Drucker adds, "That the ability to ask these questions (consumer’s wants) makes the difference between a growth company and one that depends for its development on the rising tide of the economy or industry. Whoever is content to rise with the tide will also fall with it."