Archive for Strategy

The Need For Speed

23 May, 2007  No Comment

Rob at Business Pundit has an interview with Laurence Haughton, co-author of It’s Not The Big That Eat The Small…It’s The Fast That Eat The Slow.

You should read the whole interview, but here’s a taste:

Speed just keeps gaining momentum (as a competitive advantage). Why? Because:

1. Slow costs more. Every minute we can take out of manufacturing time, stocking time, get-to-market time, and customer response time saves us money and makes us money.

2. Speed is the ultimate customer turn on. Everyone is short of time. We hate delays, long lines, out-of-stocks. We love finding what we want and getting back to work (or play) fast. And we’ll pay for speed.

3. Speed is the one advantage that the big competition can’t duplicate easily. Big companies are bureaucratic, dysfunctional, and self-absorbed. They don’t listen, they are slow to change, and they kill momentum and initiative. Don’t copy them.

Rob also has a link to a free webinar that Haughton will be giving on speed as a competitive advantage.


Lag Your Putts - Not Your Indicators

20 May, 2007  No Comment

Lagging Indicators are those pieces of data that tell us what happened. They’re history.

The most common collection of lagging indicators that business owners are familiar with are the financial statements – Balance Sheet, Income Statement and Cash Flow Statement – along with the other management and financial reports pouring forth from the accounting department.

If you’re like a lot of companies I come across that are transitioning from small business to small enterprise, you get your financial statements for the previous year in April July. So not only are your indicators history, they’re ancient history. That’s a tough way to manage a business. Read the rest of this entry »

When Is Extreme Marketing Too Extreme?

17 May, 2007  No Comment

I don’t often disagree with the folks at Creativity Exchange, but I have to on this post.

I think this is an excellent example of extreme marketing.

It’s not going to appeal to everyone - in fact it’s probably going to offend the majority of people. But for its intended market (young, male, X-game loving) it’s spot on. It’s tapping into the rebellious streak that describes these consumers to a “T.”

Cocaine

And while I’m on self-identified rebellion, ever think why 50-something stock brokers, doctors and lawyers ride Harleys? Rebellion seems to be in the American DNA. I wonder why.

Don’t Tick Off Your Passionate Fans

17 May, 2007  No Comment

A lot of marketing mavens (including The Hairless One) advise us to find and please passionate users of our services or products. It’s better to have prospective consumers either love us or hate us rather than have everyone be unconcerned/unconnected/unemotional. All it takes is a tiny portion of the whole universe of consumers to be passionate about us to create a successful enterprise.

So what happens when you reverse course and tick off your most passionate customers? They leave. And they tell 10 10,000 friends…and so on.

Building your business around passionate users is a two-edged sword. On the one hand you gain customers who don’t shop around to save a few pennies on price. But, and this is a big but, DO NOT MAKE THEM ANGRY! You won’t like it when they’re angry.

Hat Tip: Creativity Exchange

Moving Up The Value Chain

16 May, 2007  No Comment

This article in Startup Journal describes the renaissance in dairy home delivery. I think this is an excellent example of widespread relative affluence and a desire for experience (by way of nostalgia) creating an opportunity for higher value products. Consumers aren’t just buying milk - they’re buying a piece of their childhood along with a healthier lifestyle. And they have the money to do so.

Crescent Ridge isn’t alone. There are home-delivery dairies and distribution services, big and small, from Connecticut to California, that are seeing stronger demand. Some have old roots like Crescent Ridge, while others are newcomers.

In 1994, Tom Rubino opened a delivery service called Hudson Milk Co. in Shrub Oak, N.Y., with just six customers. Today, his operation reaches some 300 homes. His biggest seller is the nostalgic half-gallon glass bottle of milk that Mr. Rubino gets from Byrne Dairy in upstate New York.

Older customers remember the glass bottles fondly and want convenience, Mr. Rubino says, while younger families are more interested in buying locally and making sure their foods don’t have unnecessary additives or hormones. “We were lucky and got on a particular trend at the right time,” he says.

In addition to milk, Hudson Milk also delivers items like cream, organic eggs, yogurt and Poland Spring water for a flat delivery fee of $2 — which has boosted his average order to $25.

I do have one quibble with the author…

And that appetite for wholesome fare, coupled with rising gas prices, is giving an unexpected marketing boost to some tiny dairies and local milk distributors, helping them compete against larger rivals who saturate store shelves.

I can’t remember the last time I made a special run to the store just to buy milk. I doubt that saving gas has much to do with this trend.

Hope Is Not a Strategy

16 May, 2007  No Comment

This article in Businessweek discusses the impact that Walmart’s infamous sub-$1,000 plasma TV promotion for Christmas 2006 had on both suppliers and competitors. With its scale and its low cost structure Walmart forced its competitors to adjust prices with disastrous effects.

The fallout is evident: After closing 70 stores in February, Circuit City Stores (CC) on Mar. 28 laid off 3,400 employees and put its 800 Canadian stores on the block. Tweeter Home Entertainment Group (TWTR), the high-end home entertainment store, is shuttering 49 of its 153 stores and dismissed 650 workers. Dallas-based CompUSA is closing 126 of its 229 stores, and regional retailer Rex Stores (RSC) is boarding up dozens of outlets, as well as selling 94 of its 211 stores. “The tube business and big-screen business just dropped off a cliff,” says Stuart Rose, chief executive officer of Dayton-based Rex Stores. “We expected a dropoff, but nowhere near the decline that we had.” Clearly, these retailers are taking such drastic measures because they don’t see any respite in sight.

Walmart also took advantage of suppliers in an industry with heavy competition and a rapid increase in manufacturing capacity.

Read the rest of this entry »

Adjusting On The Fly

12 May, 2007  No Comment

Richard Florida comments on an article in the WSJ Online (subscription req’d) in which condo developers are finding that condos in urban areas targeted to young singles are attracting empty nesters in large numbers.

“Mr. Schaefer’s Bristol Development Group is pitching the project, Velocity, to twenty- and thirtysomething professionals willing to trade space (as little as 535 square feet) for affordability (as low as $165,000) and a chance to live in a hot urban neighborhood. Developers across the country are appealing to young buyers — many of them single, almost all without children — with buildings that promise not just an affordable first home but also a great social life. The amenities tell the story: videogame lounges and outdoor fire pits, rooftop soaking tubs, on-site bars and poolside drinks.

But it’s not so easy to control demographics in the open market. Some of the buildings are drawing unexpected buyers: people old enough to be the parents of the kids down the hall. And that’s leading to territorial conflicts, social snubs — even planned boardroom coups.

Such concerns are multiplying as the new buildings fill up with a mix of residents who range broadly in age. In Denver, about half of the units in the recently completed Glass House sold to empty-nesters, despite youth-oriented amenities such as a videogame lounge and a Web site that promises “cool bars” and “a fresh vibe.” In New York, even a hot tub above the lobby and a provocative marketing campaign couldn’t keep boomers away from William Beaver House, slated to open next year. And when Viridian opened last October in Nashville, most locals expected the high-rise to draw young buyers looking for a chance to live downtown. It did, but it also attracted people like Julie Lammel, a speech pathologist in her early 50s who moved there from a suburb where most of her neighbors were in her own age group.”

This is an excellent example of ‘best laid plans’ not turning out as expected. But sometimes that’s a good thing. In this case the developers have found an additional market for their product through no action on their part. The trick will be finding ways to keep both groups - young singles and empty nesters - happy. If they can do so (in other words, change the strategy on the fly) they will be able to sell more and sell faster. And what business owner wouldn’t be happy doing that?

 

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