Market Orientation is the strongest predictor of business profitability. Buyer power, supplier power, seller concentration, ease of entry, market growth rate, technological change, business size, and relative operating costs matter too, but not as much.
Market Orientation is measured in four factors:
- Customer Orientation: Understanding your buyers
- Competitor Orientation: Understanding your competitors
- Inter-Functional Coordination: Company alignment to create superior value
- Long-Term Focus: Multi-year planning horizon
Bezos was right: customer is king. Michael Scott was right too: "Make friends first, make sales second, make love third. In no particular order."
Michael drinks with his clients and solves their personal needs: "And I guarantee, that you will be satisfied! 'Cause your satisfaction is our guarantee! We guarantee it."
Since his competitors are 'too big to care' clients get confidential conversations with every member of Dunder-Mifflin. (Or he steals their secrets.)
To keep client conversations effective, Michael coaches each member of his organization, pushing them to date office-mates and socialize outside work. To further align coworkers, he calls company-wide meetings, involving everyone in a single goal, like holiday parties or diversity workshops.
And when the going gets tough, he's willing to give up his position to improve the future prospects of the office's profitability. Not to mention, he was top salesperson two years running.