business strategy made simple

David Locke and Richard Koch wrote an excellent business strategy book, called “Simplify“. I’m a sucker for anything that promises to make my life or my business simple, so I thought I would read it. I noticed parallels between these author’s suggestions, throughout this book, and what I learned in university, years ago. Sameness will kill your business.

Sameness will kill your business

Consider a product or service in any established industry. When you break it down into features, you may start to realise there is very little, if any difference between competitors. Sure, they probably tell you they have low prices every day or better service. Rubbish.

Do you really believe there is a significant difference between the service from one petrol station to the next, for example? Major supermarkets? Big banks? Probably not. If you do love the customer service at one of these chains, chances are it’s down to the hot, witty, kind or sexy person who serves you and you find some natural attraction or appealing trait. When that person leaves, your service experience will return to the dull, black and white, ordinary variety you know so well.

Coles and Woolworths were starting to look the same

Let’s have a look at supermarkets in Australia , for example. when you attend a supermarket, you’re likely to have some expectations already. Traditionally you would expect to have access to a trolley or basket, printed price tickets, products organised and sorted by isle and category, service staff to scan items, accept payment, pack your bags and in some cases carry groceries to your car. Thanks to some of the local IGA’s, who still do this for elderly folk!

Aldi had a new business strategy

Then, Aldi entered the market with a business strategy, to become a new type of discount retailer. sure, items were organised, but many of the shelves were swapped out for pallets. Bags were optional and there was a self -serve station where you could pack your own bags or boxes. Shoppers had to rummage through their pockets for a gold coin to unlock a trolley or they had to juggle as many items as they could with folded arms, as they made their way to the checkout.

What do you think happened here? Do you think Aussies decided they wanted less convenience? No. Of course not. But everyday Australians had to decide which features of the shopping experience were most important to them and which they were willing to sacrifice to save money.

Aldi makes their move for a piece of the pie

Indeed they did and Aldi was quickly able to position themselves as an economical option in what was almost a duopoly between Coles and Woolworths, capturing 11 percent share of the market.

Designing your product or service features

Early in the design of your product or service it pays to give serious thought to the some features common to your industry and which ones in particular consumers weigh up to decide among their available options. This is the obvious starting point for almost any business strategy.

Add, eliminate, reduce or increase?

Following are a few ideas for how to approach your product or service design. Some of these are adapted from other ideas, such as Blue Ocean Strategy. Start thinking about this early in your business, if possible:

  • List the features common for the core products or services in your industry, or the industry you wish to enter.
  • Which features do consumers consider salient (or most important) when deciding between products or services in your industry?
  • On a scale of 1 to 10, where do your competitors sit on each of these features? How does your business rate?
  • Is there an opportunity for your business to stand out or be known as the clear leader for one of these important features?
  • Can you identify any features, which might be outdated, redundant or unimportant for consumers to make a decision?
  • Could you eliminate or reduce these features to save time or money , without hurting sales?
  • Can you see an opportunity to create or introduce new features?
  • Would it help you to bring back features , which may once again be relevant in today’s circumstances?
  • Could modifying product or service features lead to the creation of a new category or subcategory in your industry?

As you ask these questions in your mind , you may already be giving thought to how this relates to your own business strategy.

Subtraction is a product and service design secret

Indeed the book, “Simplify”, addresses the question of whether great product design is about adding more features. I suggest subtracting features is more often what produces a winning design in the marketplace. Apple’s original iPod shuffle is one of the great examples they introduce in this book to illustrate their point.

What is Blue Ocean Strategy?

Similarly, “Blue Ocean Strategy” is executed with a deep exploration of product or service features. The authors introduce readers to a business strategy framework to help decide which features to create, which to eliminate, which to increase and which to decrease. I run the risk of oversimplifying these strategies here, however, my aim is not to provide detailed explanation. My aim is to demonstrate that probing into features will give you a solid foundation to create a unique product or service.

Same, same but different

If you are the same as every other business, you will never stand out. Unless you can find something that makes your business unique and indeed better in the eyes of consumers, you will struggle. In the words of Seth Godin, find something that makes your business remarkable.

Business Strategy: Seth Godin speaks about what it means to have a remarkable business

Business strategy is not complex

In a world of seemlingly endless possibilities, it is tempting to want to add complexity to a product or service in the hopes it will win new customers or clients. More often than not, excellent design, is about finding what non-essential features can be removed. What features are redundant or no longer serve the purpose for which they were designed in your industry? Could you reduce or remove those features for some payoff, like reduced cost or added convenience?

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