Final answer:
The next step after a firm has a positive result from market testing is the Product Launch, where the firm introduces the product to the public market. This decision is often supplemented by strategic financial planning, choosing between different sources of financial capital such as investors, loans, or stock offerings, depending on various factors including the firm's financial condition and growth prospects.
Step-by-step explanation:
If a firm has a positive result from market testing, the next step is typically Product Launch. This step signifies the introduction of the product into the market after successful testing and development phases. It's the stage where the firm actively starts selling the product to the public, often accompanied by marketing campaigns.
Before a Product Launch, a firm must consider how it will finance this phase and its subsequent operations. Raising financial capital is critical, which can come from early-stage investors, reinvesting profits, borrowing through banks or bonds, or by selling stock. The decision on which financial capital source to use involves assessing the firm's current financial position, future earnings potential, and the cost of capital. Factors such as the firm's tolerance for debt, ownership dilution, and market conditions can play a role in this decision.
When a business needs a surge of financial capital for a major expansion, the owner must decide whether to borrow funds or to issue stock. This decision depends on multiple factors, including the firm's existing equity, level of current debt, and the cost of each option. For established firms requiring capital, borrowing might be preferable if maintaining control is crucial and the company has the cash flow to support debt repayments. Issuing stock might be preferred if the firm wishes to avoid increasing debt levels and is willing to accept new shareholders.