Business research examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, changing patterns of the business world, and numerous other factors that make up the business environment.
The emphasis of business research is on shifting decision-makers from intuitive information gathering to systematic and objective investigation.
Like other research, business research is accomplished through exploration, description, explanation, and prediction.
Let’s Understand Business Research:
What is Business Research?
Business research is a systematic and objective inquiry that provides information to guide managerial decisions, which are arrived at through planning, acquiring, analyzing, and disseminating relevant data to decision-makers to mobilize the organization to take appropriate actions to maximize business performance.
Who Business Research Works?
Business research is of recent origin and mostly supported by business organizations, while the public domain has sponsored much environmental research, some of it for hundreds of years.
The development of scientific methods in business research lags behind similar evolution in the physical sciences.
Physical scientists have been more rigorous in their concepts and research procedures. They are much more advanced in their theory development than business scientists. Business research operates in a less favorable environment in other ways, too.
Physical research is usually conducted under controlled laboratory conditions, while business research seldom is.
Business research is an important management activity that helps companies determine which products will be most profitable for companies to produce.
Several steps are necessary when conducting business research: each step must be thoroughly reviewed to ensure that the business enterprise makes the best decision.
Steps of Business Research
These steps include, among others:
- Product analysis.
- Market analysis.
- Financial analysis.
- Competitor analysis.
- Growth analysis.
Product Analysis
Product analysis is the first step in business research.
Companies must find a product that meets consumer demand or exceeds consumer demand; otherwise, the product will fail in the economic marketplace.
One type of analysis is to find an existing product that can be improved through design and features.
Another kind of product analysis will find emerging markets with high demand and low supply, which allows companies to sell products to meet consumer demand.
Market Analysis
Companies will conduct a market analysis to determine how much profit may be earned from current demand.
Management will look at which stage of the business cycle the market is currently in, whether emerging, plateau, or declining. A market analysis will also determine the price points at which products can be sold.
Financial Analysis
The financial analysis determines the cost of each production item used to produce goods and services.
Management will also review the best cost application methods, ensuring that all production costs are adequately applied to each product manufactured or service rendered.
Competitor Analysis
A competitor analysis of a market is an essential part of business research. Knowing which companies have the best production methods or customer loyalty helps new companies understand how they can create a competitive advantage when entering a new market.
Growth Analysis
Growth analysis is crucial in understanding a business operation’s profitability.
Business research usually includes forecasting the growth and direction of the current industry or market. Knowing to which direction the market is headed helps companies determine the stability of new business operations.
A SWOT (strength, weakness, opportunity, and threat) analysis is often undertaken to understand a market.
Based on this analysis, a business enterprise can take strategic decisions or measures in a business venture.
What are the primary objectives of business research?
Business research seeks to understand all aspects of a business environment, including competitors, market structure, government regulations, economic trends, technological advances, and changing patterns in the business world.
How does business research differ from physical sciences regarding its development and methods?
The development of scientific methods in business research lags behind that in the physical sciences. Physical scientists have been more rigorous in their concepts, research procedures, and theory development. Additionally, physical research is often conducted under controlled laboratory conditions, whereas business research usually isn’t.
What are the steps involved in conducting business research?
Business research involves several steps, including product analysis, market analysis, financial analysis, competitor analysis, and growth analysis.
Why is a SWOT analysis often undertaken in business research?
A SWOT (strength, weakness, opportunity, and threat) analysis is undertaken to understand a market comprehensively. Based on this analysis, businesses can make strategic decisions or measures in their ventures.
Examples of Business Research
Here are five examples that illustrate what business research is.
Example #1
Microcredit programs from institutional and non-institutional sources have been found to significantly impact raising the standard of living of rural people, especially women.
But there is ample evidence that these credit facilities are misused and misdirected in many instances.
This practice has led to a high default rate, putting institutions hesitant to finance rural people. In this context, it is imperative to examine the status of credit utilization and assess the extent and magnitude of misuse and diversion of credit in rural areas.
Example #2
Human resource development has become an essential component of the development process. This is because the human factor drives any development process.
Since a firm’s human resources are an important potential source of sustained competitive advantage, managing them well helps create unique competencies that differentiate products and services and, in turn, drive competitiveness.
This link, in principle, facilitates successful corporate performance.
An increasing body of work argues that a positive relationship exists between the so-called high-performance work practices and different measures of company performance.
Such high-performance work practices include comprehensive employee recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training.
Several studies in Bangladesh and elsewhere have found a positive relationship between HRM practices and policies and different measures of company performance.
Keeping the above background in view, a research firm designed a study to focus on studying the relationship between rewards and recognition practices and firm performance, as well as between recruitment and retention systems and firm performance, using a survey instrument for traditional HRM activities (recruitment, selection, performance management, training, compensation, and employee relations) and using independently collected organizational performance data focusing on financial performance (assets, capital, deposits, and return on equity).
The researcher decided to restrict his sample to the banking industry of Bangladesh.
Example #3
In one of her papers, Sultana (2012: 15) states that women entrepreneurs in SMEs have emerged as a new class both in Bangladesh’s urban and rural areas.
Though some studies were conducted on entrepreneurship development in Bangladesh, no significant research was done on women entrepreneurs’ performance, either in rural or urban areas.
Women entrepreneurship or women in business is considered a very recent phenomenon in Bangladesh. Many economists, sociologists, and political scientists have recognized entrepreneurship in small businesses as an essential gradient influencing the economic growth of a country.
Keeping this scenario in view, the author attempted to highlight the activities of women in small and medium enterprises (SMEs), particularly in urban areas, including Dhaka Metropolitan city.
The study also collected data relevant to the entrepreneurial qualities of women and their socioeconomic status to understand whether these facilitate or constrain women to emerge as successful entrepreneurs.
Example #4
This example is drawn from an adventure travel survey in a US county, where many small firms operate on half-dozen rivers and provide half-day to multi-day trips to thousands of clients annually.
The managers of a group of county river basin outfitters wanted to know how to increase customers’ satisfaction and repeat business for their multi-day river trips.
They wanted to verify the hypothesis that customer satisfaction is related to concerns with the quality of food and amenities provided safety and lore about the natural and historical setting of the trips.
Example #5
Financial statements, the critical parts of financial reporting, are the principal means of supplying accounting information to a wide range of users to evaluate the financial position, profitability, liquidity, and prospects of a company so that the users can make economic decisions.
The stability of the market economy largely depends on the user groups’ confidence in the fairness of the financial statements (Choudhury et el. 1996).
Generally, fair presentation refers to the ability of the economic conditions of a company. This relates to accounting accuracy and completeness (Sen, 2002).
Keeping these points in view, Jahan and Nahar (2012: 79) planned a study to examine to what extent the companies in Bangladesh follow or observe the adapted Bangladesh Accounting Standard 1 (BAS-1) and also analyze the compliance of BAS-1 in presenting the financial report of different companies in Bangladesh.