What constitutes a good business? The answer to this question is going to drive the fundamentals of businesses in the future. A survey by Mahindra Group uncovered perceptions and understandings of the term 'good business', especially from the perspective of consumers, investors, and employees, particularly during these paradigms shifting COVID times.
The 'Mahindra Good Business Study' revealing people's changing definition of what a 'good business' means, involved over 2,000 respondents across 10 Tier- 1 and Tier-2 cities, including Delhi and Mumbai, aiming to fathom how their understanding of a 'good business' shapes their expectations and decision-making as potential consumers, investors, and employees.
Study findings
Mumbai respondents (63%), according to the study's findings, surpassed those from Delhi (29%) as they associated the term 'good business' with traditional business metrics such as 'profitability,' 'growth' and 'market leadership'.
Meanwhile, 51% of the Delhi respondents believe that 'good business' begins and ends with financial metrics; this number increased in Mumbai, with (96%) of the respondents believing the same.
A majority of the Mumbai (86%) and Delhi respondents (60%) also agreed that good business is about contributing to the community.
From an employment perspective, nearly a quarter of Mumbai's respondents chose factors such as 'reduction in emissions,' 'environmental impact,' 'community,' and 'CSR' contributions as the top criterion of 'good business'. Also, nearly half of the respondents in Delhi (48%) considered 'profitability,' 'growth' and financial performance' the top criterion for 'good business.'
A quarter of the respondents from Mumbai (25%) consider 'contribution to the community' metrics like climate change agenda, good community, and CSR contributions as the top criterion for a 'good business'.
Additionally, 64% of the Delhi respondents would also reject a job offer if they did not consider the business to be a 'good' one. A quarter of the respondents from Delhi (25%) consider 'contribution to the community' metrics like climate change agenda, good community, and CSR contributions as the top criterion for a 'good business'.
Meanwhile, 30% of respondents from Mumbai give more importance to a good HR policy, equal opportunity and diversity at workplace.
From an investment perspective, some differences emerged on the idea of investing in a 'good business.' While financial returns remained essential for Delhi, it was no longer enough for Mumbai respondents.
83% of respondents from Delhi considered traditional business criteria (such as products, service, and profits) when looking to invest in a 'good business' compared to 59% of respondents from Mumbai.
Meanwhile, 67% of respondents claimed they would never invest their own money in a company that they did not believe was a genuinely 'good business.'
41% of Mumbai respondents considered unconventional criteria (such as climate change and ethics) when looking to invest in a 'good business', whereas 68% claimed they would never invest their own money in a company that they did not believe was a genuinely 'good business.'
Furthermore, 34% of respondents from the city believed that the top barrier preventing a business from becoming truly 'good' is a lack of government involvement or support.
From a consumer's perspective, the study revealed that all the cities were increasingly demonstrating that their idea of a 'good business' meant that the product and price alone might no longer be sufficient to secure a sale.
More than three-fourth respondents from Mumbai (76%) considered it 'fundamental' for a company to be 'good' in their opinion before purchasing a product or service compared to 37% from Delhi.
18% of respondents from Mumbai considered brand contributions to society before making a purchase as compared to 11% from Delhi.
25% of respondents in Delhi said they consider a brand's reputation before making a purchase ahead of market leadership.
More than a quarter (38%) of respondents from the national capital principally considered 'competitive pricing' and 'market leadership' before purchasing a product.
Meanwhile, 24% of respondents from Mumbai consider the quality of a product (features, functionality, and environmental impact) before making a purchase. Nearly double (32%) of respondents from the city principally consider 'competitive pricing' and 'market leadership' before purchasing a product.