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Shifting Your Business Strategy – 1 August 3, 2009

Posted by David Dirks in Increasing Your Profitability, Sales Strategy/Tactics, Sales Tactics, Solving Business Problems.
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David DirksIBM’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.



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