Its very necessary to know about nature of business you are in to. There is a similar instance I remember when Mr. Ray, one of the Founders of McDonalds was giving a lecture in one of the prestigious business school in US. He asked the students about the nature of his business. Most of the students said, they are in food business, some surprisingly said, you are into family or individual hangout place provider etc etc. He said, you all have answered right but this is not my business. The actual business of McDonald is Real Estate business. Everyone was surprised to know that. Mr. Ray justified his answer that they need a prime location where people can stop and visit his place, their interiors and most of all, McDonald owns most of the places.
As of now, McDonald own the highest number of properties in the world, even more than the churches.

This is the quintessential question that every business must ask itself before it can envision any kind of success. Figuring out the function of the organization can give the direction it needs for growth. Businesses have undergone drastic changes from being product centric to orienting itself to a customer centric organization. Initially there were not many competitors so there used to be monopolistic competition in the various business segments. Consumers were compelled by the products and pricings offered by the different enterprises. They did not have much choice in the matter.
Later people started realizing their worth when they had the power of bargaining due to multiple suppliers of similar products.
In the early 1900s pioneers like Henry Ford of the Ford Motor Company started understanding the importance of the customers. Ford rightly stated that "It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages". Businesses slowly started listening more intently to the needs of the customers. They started creating new wants to engage customers to spend on their products. Businesses which were not well defined slowly started getting irradicated.
The prime example of this was the railroad company. They assumed their primary business was in the railroads rather than the transportation business. Even though there were no lack of new customers, they let other transportation businesses like cars trucks and aeroplanes steal their customers. This was a typical product centric approach in their business development.
Another classic example of marketing myopia is the hollywood business.
Hollywood had a close shave because of its incorrect business objective definition. It saw itself in the movie business rather than the entertainment business. Because of this TV at a large portion of its market share with viewers prefering the comfort of their households for entertainment. Eventually Hollywood realised its impeding doom so it gave its customers the movie feel by revamping theatres into multiplexes and giving the feeling to the customers that would make them visit a theatre for the entertainment.