Shifting Your Business Strategy – 3 August 24, 2009Posted by David Dirks in business strategy, Solving Business Problems.
Tags: business growth, business strategy, growing revenues, market strategy, sales growth, shifting business strategy
add a comment
Waiting for things to ‘get better’ is not a strategy. Or least, it’s not a winning strategy. Waiting for things to ‘get back to normal’ is just an opportunity for someone else to eat your lunch. I hear too often from business owners who echo those sentiments. Whatever the outcome of any economic cycle, the high performing Big Dogz who grow through them are the ones who win longevity.
It’s quite natural for a business owner to want to hunker down, close the hatches, and wait the economic storm out. Some businesses will survive and others will not. Let me ask you: who wants to be just a ‘survivor’ when you can do better?
How many do you know that own a business that are using the ‘wait and see’ approach as an excuse to hide in the bunker until the shelling stops? Probably more than you and I know of.
The good news is that you can take advantage of this or any other times of great uncertainty by looking for opportunities that you can leverage to grow your business. I’m just scratching the surface here but some things to consider:
- Work harder to find ways to free up cash that can be deployed to expand your business. The common response in tougher times is to free up cash and then hoard it until the good times come again. Obviously not entirely out of order to keep some cash in reserve but many businesses just hoard it. By the time anyone realizes the good times are back again, it’s too late for you to find opportunities to invest some of that hoard.
What to invest in during tough business climates?
- Upgrade to more efficient and powerful equipment. The right investments could reduce your costs on a product or service line is one possibility if it makes your business provide services faster, better, and cheaper.
- You could take advantage of a weak competitor in a nearby geography that you currently don’t serve and hire additional sales firepower to build business there.
- Buying a competitor when it makes sense and the price is right.
- Develop & expand your product and services lines. We’re often quick to prune the losers (or at least we should be) and much too slow to replace with products/services that could keep revenues moving forward.
- Upgrading customer services. Too often this is left in place or cut back. High performing companies make sure that any customer touchpoints are responsive and best-in-class.
- Establish a strategic partnership(s) with other businesses that are complimentary and have high potential to drive revenue growth. Hunkering down can blind us to opportunities that are staring us right in the face if you only took the time to look.
None of this is easy to do. That said, what it does take to do this well is 1) constant and deep scanning of our business environment to find and connect with opportunities and 2) the internal ability to move on those opportunities that won’t be there if you wait for the ‘good times’ to come back again.
Shifting Your Business Strategy – 2 August 20, 2009Posted by David Dirks in business strategy, marketing, Recession: How to Beat It!, Sales Strategy/Tactics, Solving Business Problems.
Tags: business strategy, changing business strategies, differentiation, hyundai, market differentiation, marketing, marketing strategy, strategy
add a comment
It would be the understatement of the year to say that the auto industry has been literally crushed under the weight of too much production for too little demand. The auto industry problems are not just isolated to demand issues. Despite being the worst car buying market than we’ve seen in a few decades, there is one car company that seems to be profiting from the ravaged auto market. It’s also a car company that few would have thought would make it and it’s called Hyundai.
My first introduction to Hyundai was back in the early 1990’s when Hyundai was still a brash newcomer to the American buyers. It’s appeal to me back then was the same appeal it has today: cars available at a great price. There was only one problem. I saw the problem first hand at a Hyundai dealership when the salesman started the engine and smoke began pouring out the the engine. The salesman wasn’t fazed but my wife and I were aghast. Where is the smoke coming from and why? Without missing a beat, the salesman told us that there was some paint from the factory that had to sometimes burn itself off the engine block. Yeah, right. We left and never looked at a Hyundai since then. That was a long time ago.
Since then and now more than ever, Hyundai has been growing its market share here and in Europe. How did they do that? How did they come from laughing stock of the auto world to respected car manufacturer? How did they manage to introduce a luxury car, Genesis, that actually won the Car of the Year award?
They did it by shifting their business strategies. Notice the emphasis on ‘strategies’ in the plural. Over the years, Hyundai recognized that it needed to be more than a car company that built & sold cars at low price points.
The first issue they attacked was quality. Their manufacturing processes caused them a huge amount of grief and consumer distrust of the their brand. Over time, they dramatically improved quality in their manufacturing processes. Then, to attract buyers back to their showrooms, Hyundai did the unthinkable at the time: offering a 10-year, bumper-to-bumper warranty on every car they sold. In effect, they basically guaranteed the quality of their cars for the life of the car. This when the industry standard was 36,000 miles. This strategy went a long way towards getting their customers back into the showrooms and buying cars again.
More recently, to encourage buyers back into their showrooms during the worst economic conditions since the Great Depression, Hyundai brought out another big gun and shift in strategy. Many took the Hyundai Assurance Program as a marketing gimmick but that soon proved to be untrue. By assuring buyers that it would take back a leased or purchased vehicle in the event of the customers job loss, Hyundai took another big step towards growing marketing share.
Here are some of my takeaways based this continuing success story:
1. Acknowledge your weaknesses and actually fix them. Hyundai suffered initially with awful quality problems that make their cars the butt end of late-night comic routines. While offering cars at some of the lowest price points in the market was their basic strategy, they had to shift emphasis on quality. That meant shifting large amounts of resources within Hyundai to insure that quality was more than job #1. Hyundai gets great credit for recognizing a key weakness in their strategy and fixed it.
2. Create market differentiation by communicating your strategy shift clearly and loudly. Hyundai introduced its ground breaking ’10 year, 100,000 miles’ warranty to insure people understood it was serious about quality. It set a new bar on auto quality and Hyundai wasn’t afraid to put serious marketing muscle behind it.
3. Business strategies can always be fine-tuned. Staying true to its mantra of offering lower priced cars versus almost any other manufacturer, it entered the luxury market with it’s now highly acclaimed Genesis. The Genesis is a true luxury automobile but offered at one of the lowest price points on the market compared to similar luxury models from competitors.
4. Do more than your competitors to differentiate and strengthen your market position. When economic hard times hit, Hyundai hit back with its Hyundai Assurance Program. That kind of groundbreaking marketing strategy was just what the Doctor ordered to bring more buyers into the showroom.
Hyundai stayed the course on its purpose to build cars and sell them at low price points. It shifted it’s business strategy to insure that it could deliver on that promise and sell cars to satisfied customers. That’s a long way from its charred introduction more than 20 years ago here in the U.S.
Shifting Your Business Strategy – 1 August 3, 2009Posted by David Dirks in Increasing Your Profitability, Sales Strategy/Tactics, Sales Tactics, Solving Business Problems.
Tags: business development, business strategy, growth, IBM, marketing growth, markets, new markets, sales, strategy
add a comment
IBM’s movement from great to nearly dead to great again has been nothing less than one the greatest stories of business transformation yet told. I’m not going to recite all the IBM history but suffice to say that it has gone from great hardware/systems builder to now to the premier provider of consulting services. IBM is truly a big dog when it comes to high performance in shifting business strategy.
The shift from from hardware only focus began in earnest around 2002 when current CEO Sam Palmisano made the decision to buy PricewaterhouseCooper Consulting. While IBM still sells a lot of hardware, it’s shift into new lines of business via its consulting platform is growing faster and becoming its fuel for greater profitability.
The profit margins in consulting for IBM are far greater than those generated by hardware and even its software units. IBM has also defty sought out acquisition opportunities that can add to its shift to selling more consulting services. Not only that, but oftentimes selling consulting services leads to selling more hardware and software. What a harmonized business model if I ever saw one.
What does the IBM story mean to you? The question is really in your court: Can find opportunities in your business model that will allow you to shift and expand it to other related areas? Too many business owners are fast to recogize either the limitations of the revenue growth or the lack of (in this economy for sure) but slow to see other opportunities to expand revenue growth.
Does the IBM strategy shift apply to small businesses? Yes and any all other businesses as well. For example, let’s use the landscaping business, which typically is a small business model. Most landscapers just focus on selling physical services like cutting your grass or planting new trees, shrubs, etc. That’s the typical operating box for a landscaping business. However, what if that landscaping business offered a ‘consulting services only’ platform? That kind of business platform would just provide consulting expertise to those who wanted only that and not the physical labor component.
I’m a good example of that kind of customer. Personnally, I find landscaping, from cutting my own grass to planting trees to clearing areas for new grass, very enjoyable both physically and mentally. I don’t want anyone to do those things; I’ll do them myself. However, I’m not an expert on horticulture either. I could use some expertise on some landscraping projects I take on myself from time to time.
But in the local survey I did recently, most landscapers either don’t offer or don’t market their consulting services. It’s all about the physical services. Are there more people like myself who only want the expertise but not the manual labor? Perhaps. This example is just to show you that shifting your business strategy to related areas within your business model is possible no matter what business you are in.
I’m not saying that marketing & selling consulting services is the only shift you can make either. IBM is just a handy and well-known example of a successful and profitable shift in business strategy that most people can identify with.