Looking for a Business Opportunity? Read these words. December 4, 2013Posted by David Dirks in business strategy, Entrepreneurship, Strategy.
Tags: building a business, David Dirks, dirks on strategy, small business, small business startup, starting a business
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Every once in a while, someone drills out a few words that just hit you like a ton a bricks. They are often a string of words that are simple as they are powerful and true. For those who are looking for ways to create a business and – more importantly – a strong business model – then take in these words by Box CEO Aaron Levie:
“Take the stodgiest, oldest, slowest moving industry you can find and build amazing software for it”
That’s it. Ok, so maybe your not into software but the advice still applies to anyone else. Take a stodgy industry that no one pays much attention too…isn’t the latest hot business platform…and find ways to innovate the heck out of it. Turn it into something that people will say, “why didn’t we think of that?”.
Today they call it “disruptive innovation”. Whatever you call it, it’s an age old way to develop a business concept that has the best chance for survival and growth. That isn’t to say that it’s easy. Not a chance on easy but Levie’s point at least gives you a way to channel your enterprise desires and try to avoid doing what everyone else is doing.
Iteration Is A Strategy July 1, 2013Posted by David Dirks in business strategy, Dealing with change, Solving Business Problems, Strategy.
Tags: business growth, business planning, business strategies, business strategy, David Dirks, dirks on strategy, growing a business, iteration
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Does the Facebook of today look like the Facebook when it was first launched in 2004? Did Amazon perfect its business model of today in 1994 when Jeff Bezos founded it? Is the IBM of today the same as the IBM of say 40 years ago? Here’s another question for you: How many businesses hit a genuine business model home run where sales and profits start cranking out right from the start?
The answers to the above questions are “n0”, “no” and “once in a blue moon – if ever.” To iterate is to keep trying – keep pushing your business model forward. It’s tinkering with the engine until it sounds like all cylinders are working smoothly. In some cases, it’s challenging the very dream we have hold so dear in our business – the very vision we have might not be the vision that produces the life blood of any business – greater sales, growing profits and cash flow.
Iteration is a process that should be integrated into the culture of most any organization but rarely is. Here are some thoughts on the process of iteration:
- Don’t get married to your vision or dream. What? How can we achieve greatness without a vision we can steadfastly commit to? It’s not easy – if it was then iteration would be a breeze and everyone would be doing it. They aren’t – which is just one reason why many organizations fail within five years or less.
- Business plans are like war plans. Everything changes when the bullets start to fly. Yes, I know you spent a ton of time working and toiling over your business plan and it’s a great starting point but…when the reality of the business environment hits it, it’s over. Competitors don’t play nice or according to the plan. Customers are more finicky than the business plan sales projections call for. Things have to change when the bullets fly.
- Not everything has to change. Sometimes iteration means tweaking only what needs to be tweaked. Keep testing, changing, moving forward – throwing out what isn’t working and keeping what does.
- Challenge yourself to iterate on purpose. When you realize that iteration is a part of your business life if you want to succeed for the long run.
When you build a business…it’s about the long run isn’t it?
The Rise of Lower-Priced Premium Quality May 21, 2013Posted by David Dirks in business strategy, Sales Strategy/Tactics, Strategy.
Tags: business strategy, market strategy, pricing strategy, product development, service development
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There is a very distinct trend in product and service development today that I feel has major implications for businesses of all sizes and industries. It’s the idea that cheaper or lower-priced products are being design and built with far better quality than just a few years or even a decade ago.
Take the Ford Fiesta for instance. This is an economy car (lower priced, low expectations) that’s been around for a while but like the Chevy Cavalier or the Ford Escort, suffered from the traditional “low-priced, low-quality” syndrome. The 2012 Ford Fiesta is now a highly rated car (edmunds.com) with a still-low sticker price. To get the Fiesta to this point, Ford had to make a commitment with itself to find ways of incorporating select design & engineering elements from their higher-priced, higher quality brands and drilling them into the designs of their economy car line. And they still had to provide this economy car at an economy price (starting at $13,000).
For another example, both Hyundai and Kia had to learn the same hard lesson across all of their product lines when they came to the U.S. market just a few decades ago. Back then, both were the laughing stock of the car industry when they tried to produce less expensive cars in all categories but fell short with major quality problems. What they learned is that while some American consumers want to spend as little as possible…they still want to be able to show value for whatever money they spend. Now both offer less-priced cars at higher than average quality. A market strategy win for both.
Remember the Yugo? The idea was great – a super cheap car for the masses. Sure, you could buy perhaps three or four Yugos for under $12k all in but there was one problem. The Yugo broke down almost immediately upon trying to leave the dealership. That was the end of Yugo.
Let’s take wines as another example. There was a time when there was very cheap wine (Boones Farm Strawberry wine ring a bell?) or very premium wines (at $20 or more a bottle). There was little in the way of a great Merlot or a Sirah at $8 a bottle. However, for more than a few years now, consumers have been treated to a very competitive industry that has figured out how to provide high quality wines in the $8 to $14 dollar range.
So what’s this mean for you and your business? Here some thoughts:
– Do you offer lower-priced, higher quality products or services to you customers? The key is figuring out 1) which features & associated benefits from your high quality offerings can be 2) engineered into your lower-priced offerings.
– Check your competitors. Who is offering a slightly upgraded product or service at a competitively lower price? If I’m your competitor and I know I have to have a line of basic, lesser priced products or services for those customers who want them, my best strategy for outflanking you is to offer a slightly improved version. One that has the kind of feature(s) and benefit(s) often only found in the premium lines.
Consumers today are far less tolerant of cheaply priced, lower quality products than ever. Rest assured that there is still quite some amount of junk being sold as a product or service – but therein lies your competitive opportunity. Seize it.
Driving Foot Traffic: Woolworth’s Style December 14, 2012Posted by David Dirks in Driving Store Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems, Strategy.
Tags: business strategy, David Dirks, David E Dirks, dirks on strategy, driving store traffic, market differentiation, sales strategy, store traffic
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It took the latest issue of Businessweek to remind of that oftentimes what is new is old. Case in point: the Woolworth’s food counter. Remember (for those of you who are old enough to) the days when you local Woolworth’s store had a lunch counter where great, cheap hamburgers, fries and a great milkshake where just across from those square product bins that checkered the store? Woolworth’s was a pioneer in creating a way to drive foot traffic with something that had nothing directly connected to the products they sold. By having a soda fountain style lunch counter, there sales per square foot where for a long time better than average.
The lunch counter couldn’t save Woolworth’s from going out of business after decades of success but the idea of driving traffic by providing food lives on. Nordstrom operates about 200 restaurants of one kind or another, including coffee bars. Barnes & Noble developed its coffee bar concept to drive traffic and create a reason for people to hang around the store longer. You’ll also notice that the coffee bar is a place where people meet to socialize. They know what Woolworth’s long understood: The longer they stay, the more chance they will buy.
So am I suggesting that brick & mortar store owner rig up the BBQ and serve up some burgers? Not exactly. What I am suggesting is that in the battle of driving foot traffic it might be that food or drink (coffee bar?) might just do the trick. As I always say, there is no magic bullet for creating foot traffic – only hard work and great execution wins the day.
What can you do to create ways for people to want to come to your store and stay a bit longer? Think about it.
Seth Godin Gets It September 27, 2012Posted by David Dirks in business strategy, Sales Strategy/Tactics, Strategy.
Tags: business growth, business strategy, David Dirks, marketing, revenue, revenue growth, sales, sales strategy, Seth Godin
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As I write this post, I’m sitting in a classroom here at the Googleplex in NYC. Just heard Seth Godin (sethgodin.com) and as he was speaking, I wrote down several things (in paraphrase) that stuck with me. This is all in the context of how we become more successful in our business to help other businesses succeed:
What story are you telling?
Are you trusted?
The more you specialize, the more likely you are to solve problems.
What is your brand promise?
Are you selling scarcity or abundance?
Get it? Think about it.
Pivoting as a Business Strategy July 5, 2012Posted by David Dirks in business strategy, Strategy.
Tags: business strategy, David Dirks, differentiation, market differentiation, Pivot, Pivoting, small business strategy, strategy
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A Wall Street Journal article (‘Pivoting’ Pays Off for Tech Entrepreneurs, April 26, 2011) caught my attention. What used to be called a “failed business idea” is now known as pivoting. That’s when you have a business model and learn that it does not provide the revenues and profits you need to sustain it (or the venture capitalists who might back you). Pivoting is the art of then taking the pieces of the business model that work and creating a new business model…even if that means going 180 degrees in another direction.
Pivoting as a business strategy is not new. It just didn’t happen with much frequency until the advent of the web, apps and other such fluid technologies. Now, if it doesn’t work, just pivot quickly to something else. To me, pivoting makes sense. If you start with a business plan and model that you learn has faults, you just pivot to another business plan and model.
Of course, pivoting is not easy and full of risk. First, pivoting is an admission that your original business model is either failing or has already failed. In the “old days” businesses that failed or were on the path to failing…just plain went out of business. Secondly, you can’t pivot slowly. If you pivot you have to do so with all speed. Yes, pivoting is like changing the tire on a car that is still moving at highway speed. You don’t have time to extend the debate on what in your business model stays and what parts get junked and replaced. Third, pivoting doesn’t guarantee anything. It just means you get to live and learn another day.
Pivoting isn’t new. Thomas Edison pivoted more than 1,000 times before perfecting the light bulb. Sir James Dyson created 5,127 prototypes before he perfected his bagless vacuum. Pivot if you dare.
The Costs of Strategy March 6, 2012Posted by David Dirks in business strategy, Strategy.
Tags: best practices, business growth, business strategy, David Dirks, differentiation, dirks on strategy, marketing strategy, small business strategy, strategy
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It’s funny. Not a day goes by when someone tells me they need some “strategy” to help them in their business. Strategy? Today the word “strategy” is used like a cheap, $2 dollar bill. It must just sound good to say the work “strategy” in a sentence. So what’s so funny about that? Well, everybody wants a strategy until they find out that implementing it might actually cost them some money. Perhaps having a “strategy” might mean you have to upgrade a system or process to gain a clear competitive edge. Or it might mean investing in additional people resources to help you exploit a new marketing opportunity. As soon as the “strategy” requires an investment of some kind, the next stage is, “How can we do this on a shoe string budget?” Well, you can’t. So, business owners and managers will pick off the parts of the strategy that call for more investment than they are willing to make. That usually means that what’s left are one or two tactics that are weakened greatly because they were part of an overall “strategy” that now only has a few pieces of structure to hold it up.
The result: Strategy failure.
Couple of observations here:
- Strategy may require investment in resources whether it be money, people, and time or any combination thereof.
- “Strategy on the Cheap” is not a strategy. That’s hoping that you’ll find enough “cheap” or “free” ways to implement the strategy to make it work.
- Strategy is not a cure for a bad business model. If your business model is broke, no amount of strategy will help you unless you are willing to make great changes and most likely a reallocation of resources.
- Strategy is not designed to make you feel good. Strategy and the implementation of it may require you and great parts of you business to change.
- Strategy is not easy. If it was, everyone would be doing it and doing with great competitive and business results. Everyone in business isn’t.
- Strategy without action is dead-on-arrival. Nice to have but useless unless implemented.
- Strategy changes the moment the bullets fly. When the competition and markets keep moving forward, change is inevitable. When the competitive battle begins, be ready to modify your strategy as conditions warrant.
- Strategy cannot fix things tomorrow. Impatience is the killer of many “strategies”.
- Strategy development must be shared. You cannot develop a strategy by sitting yourself in a room and hoping something comes out of your head. Or perhaps what comes out of your head is not that good. Share your ideas and challenges with others and let the vetting process begin.
You get the point.
Finding Winning Opportunities February 6, 2012Posted by David Dirks in business strategy, Strategy.
Tags: best practices, business growth, business opportunities, business strategy, David Dirks, dirks on strategy, marketing strategy
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On the playing field in football or business, the winning team is the one who can find and create opportunities then convert them into a win. Easier said than done when you consider you have to dig to find those opportunities that your competition isn’t already onto. Knowing where to find opportunities on a continual basis is the road to business longevity.
So where do you look or hunt for those opportunities that offer potential for revenues and profitability? Here are a few thoughts on where you might find a few.
- Leverage your business assets for new markets, even if it’s outside your core business. When Amazon needed reliable data infrastructure for its growing web business, it decided to build it on its own. At some point, Amazon realized other companies who need the ability to build web-scale applications would want the same service. Amazon Web Services was born and now powers large chunks of the internet for customers like Netflix, NASA, Virgin Atlantic and many others.
- What about your business or industry that irritates your customers the most? Netflix was born when founder Reed Hastings was charged a late fee notice from a video he rented. A universal customer irritation founded a new business model for video distribution.
- Watch how customers adapt your product or service for new uses. Customers who used Avon’s popular “Skin So Soft” oil discovered that if you mixed it with a 50/50 solution of alcohol, it became a very effective bug repellant. It wasn’t long before Avon created an extension product with just that mix.
- Look for inspiration from other industries outside your own. It’s not uncommon to find clues for opportunities that can be transferred to your own business from a completely different industry. For example, a bank could find inspiration for its web-based services by comparing them to web-services from other industries. The common and easy approach is to compare yourself to those in your own industry. That’s a one-dimensional approach that limits your ability to spot opportunities that could be applied to your business. What are they doing that could give you a competitive advantage?
Creating a real difference in your market place takes hard work and well-tuned internal radar that is able to spot opportunities when they present themselves. Being able to observe in detail the world around you and look for patterns that lead to fresh ideas and opportunities.
Businesses that have a knack for finding opportunities and the exploiting them aren’t lucky. Remember, luck is where preparation meets opportunity. The number of opportunities you find that can be leveraged for your business will be in direct proportion to the number of overlooked things your discover.
Congratulations. You’ve been promoted. December 20, 2011Posted by David Dirks in marketing, Strategy.
Tags: advertising, advertising strategy, dirks on strategy, marketing, marketing strategy, sales, sales strategy
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The title of my post today is not mine really. It’s from an ad that really caught my attention. As I go through my daily reading routine, I am intent on finding information that suits my interests, needs, or wants at the time. Of course, I scan the ads and am rarely stopped by them. However, this ad drew me in. Here’s the rest of the copy of this ad:
You’re now the boss of your own life. That’s right, today you officially become your own Chief Life Officer. At Lincoln Financial, we’re here to help all Chief Life Officers take charge no matter where you are in life. So here’s to long weekends and longer retirements, 14-year-olds and 401(k)s, and to passing on wisdom and opportunities. Of course, this job doesn’t require you to punch any clock, or fill out any time sheets, because life isn’t just about what you make, but what you make of it. And while your boardroom is more likely filled with family photos than mahogany, we’d be honored to join your inner circle to help you make important decisions with confidence. After all, the future success of any organization comes down to the one making decisions today. Let Lincoln Financial help you take charge.
Calling all Chief Life Officers.
I don’t know about you but that call to “all Chief Life Officers” really appealed to me. Born at the tail end of the baby boom generation, I can appreciate the appeal to my deeply rooted “need to achieve”.
I’m sure if I was in the room at the time this ad campaign was conceived, I’m sure they were aiming for baby boomers just like me. Chief Life Officer…yup…that’s me (and many of my fellow baby boomers too).
Great strategy. Great ad.
The App in Brick & Mortar Retail Warfare May 8, 2011Posted by David Dirks in Solving Business Problems, Strategy.
Tags: business strategy, David Dirks, dirks on strategy, marketing, marketing strategy, strategy
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While online sales continue to grow at a healthy pace each year, they still only account for a fraction of total retail sales. Is brick & mortar retail on a march to eventual oblivion? Is there something to be said for the in-store buying experience? Is there any hope for traditional brick & mortar retailers in an increasingly online world?
Smart retailers have long learned to integrate their online strategy with their brick & mortar strategy. They use the websites to drive traffic into their stores using the flexibility and the quick cycle times it takes to implement new sales program on the web.
However, the real ringer for brick & mortar retailers is the rise of mobile applications. Mall owners are just now focusing their digital efforts on creating apps that can steer shoppers to their tenant stores. They are basically welding a Groupon-like strategy to the fast moving mobile application world.
Mall owner Simon Properties is currently offering the mobile app Shopkick in many of its malls. Shopkick offers special deals in tenant retailers, some of which are exclusive to Shopkick members. Simon is also considering just buying an mobile application company just to insure they always have access to cutting edge technology. It seems to make sense on a lot of fronts.
It just seems that mall owners, like many others, were slow to grasp the value of mobile applications in their business model but better late then never.
While many associate mobile apps with gaming and clever utility tools, its real value is in providing a more level playing field for brick & mortar retailers who are looking for an edge that drives foot traffic to their stores.
One interesting note about apps is that they are not searchable using engines like Google or Bing. Apps are close-ended and only use the internet to move data around. Not surprising that Google has been investing heavily in the application market (Android anyone?) knowing that increased use of applications cuts into their traditional world wide web search business.
The strategy direction for retailers, large and small, is in mobile applications. Small retailers who are able to utilize apps like Shopkick or develop their own apps will have the advantage over those who continue to ignore the opportunities within mobile applications.