Is it difficult for you to compete?

Is it difficult for you to compete?

As a business, you might appear as David to some and Goliath to some of your competitors. But to emerge as a winner every time, you need to have adequate tools and armor. So who are you? Are you Goliath or David? And what are the strengths that you are going to use against your competitor?

Business is in many ways is a war where the causalities are time, money and pride. To ensure success in this war, it is more than necessary to have adequate tools to fight.

You might find thousands of competitors emerging from everywhere. With the world becoming a global market, your competitor might be someone in other parts of the world having power to undercut your margin and take away a huge business. There will be no point in blaming the competitors in the later stage as they will be equally hungry for success. The question is what are you going to do about handing the competitors? The answer will not be simple in most of the cases. No war is won with one additional soldier. No war can be won with one additional weapon. When a lot of soldiers and weapons are built over the time, we will become formidable and powerful.

It is these weapons created during the time of peace that will help as handy slings during tough times. They will act as armor and help to sustain the existing market. These weapons created over the time will not only ensure your survival through tough economic times, it will help you emerge as a successful business in the long run.

Are you David or Goliath?

Are you David or Goliath?

Let’s get back in time to a great war between Philistine and Israel army. Let’s get back to the great fight between David and Goliath which will be remembered forever. Goliath, the 9 feet tall and heavily armored giant, mocked and challenged the Israelites to fight. Even Saul the king of Israel was terrified at the sight of Goliath. However a persuasive teenage shepherd boy emerged out of nowhere and challenged Goliath. He eventually destroyed the mighty with a single blow of his sling. It is one of the stories that will be remembered for its great motivational value and belief in god.

As a business, we have a lot to learn from the story. Ponder over this; the same teenage David could have never defeated the mighty Goliath with his fighting skills. It was not the heavy armor that saved him from Goliath. But it was a hidden strength that the enemy totally underestimated from the puny David that decided the victory. Before the fight with Goliath, David had used the same hidden strength many a times on his own battlefield and won.  It was David’s skill in using the sling so precisely that made all the difference.  As a shepherd, David mastered the art of using the sling to protect his herd from the wild animals. It was the same practice and the precision with the sling that helped David to nail Goliath on the head. And for Goliath, in spite of having all the strengths, he was defeated because he underestimated the enemy and failed to use any of his strengths at the right time.

In business, David’s sling is called the core competence of the company. Once developed, it can help to win even the mighty. There has been numerous occasion where a small competitor challenged and killed the big corporate with a small advantage they create. Canon and Nikon developed their competence in the emerging digital field and killed their billion dollar competitors Kodak and Polaroid in the photography field. Apple killed Sony’s Walkman with their mp3 player. There are thousands of examples where competitors have been crushed with the advantages created. However the stories of Apple and Canon are known widely in the world.

As a business owner and Entrepreneur, we should create those advantages that will help us put aside the competitors and win customers. It might not be a great technology. Even small advantages created over a period of time will help in changing small stores like Wal-Mart to billion Dollar empires. If you have the necessary strategy in place to create those advantages and use them effectively, your business can do wonders.

Building a business for you part 2

PART – II

The War – Marketing:

The Roman Empire ruled for six centuries around the Mediterranean covering a vast part of Europe, Africa and Asia. The transition from Roman republic to Roman Empire started with the emergence of the greatest military commander, Julius Caesar, whose political alliance dominated Roman politics for several years. Out of Caesar’s many accomplishments, his conquest of Gaul showed his unmatched strategic skills and granted him ultimate power to lead as dictator.

Roman Empire
Roman Empire

Gaul, the most unstable region, had been the only headache for Rome as Caesar feared the Germanic tribes might migrate closer to Italy soon. Caesar started fighting with the individual tribes and began his expansion for a period of six years. However, the tribes joined together under the leadership of Vercingetorix who managed to create a massive army to resist Rome. Vercingetorix went from strength to strength as more tribes joined him to oppose the atrocities of Rome.

Vercingetorix chose the hill top, Alesia, to rest his huge army of 80,000 warriors after humiliating Roman army in many encounters. Alesia, had several geographic features making a frontal attack impossible and impenetrable. Even Caesar knew the superior advantage gained by Vercingetorix from Alesia. Had Caesar attacked them in the hill, it would be equivalent to a suicide attack.

However Caesar changed his plan and laid siege around the hill. He chose to starve Vercingetorix’s army rather than a direct encounter. His army started building a strong fortification around the hill for a 10 mile distance. Within five weeks, a strengthened fortification was completed with flooded moats, pitfalls, watch towers. Sensing the problem, Vercingetorix managed to send his cavalry for reinforcement. Reinforcement arrived for Vercingetorix after a few weeks. But it was already too late. While the reinforcement and Vercingetorix army were trying to break the barrier, Roman army concentrated on killing as many people as they can. Though the number of Gallic soldiers outweighed four to one, the strategic advantage created by Caesar ensured the victory of the Romans in the Gallic land. With most of the reinforcement killed, the remaining panicked and fled away. Vercingetorix chose surrender to starvation and was eventually executed in Rome. Julius Caesar with his army of trained 50,000 warriors managed to defeat a massive army of 350,000 Gallic forces. Caesar, the supreme strategist, created a base for Rome’s prosperous future.

In business as well, success is not decided by the number alone. Even if companies have a great product or service, the way it is marketed make a lot of difference. If creating a product or service is like creating an army to fight then Marketing is the actual war where we can capture the market from competitors. If the business is not careful enough, huge savings can be easily blown away in advertising. A lot of valuable resources will end up wasted if not adequately supported by a proper plan.  On the other hand, if carefully planned, they can bring back great returns. In this part, the five rules for creating a powerful marketing campaign is discussed briefly.

Rule 1: Know the territory – Understand Customers’ needs:

The biggest problem for the failure of most marketing activities is the failure to understand their customer’s needs. Marketing is all about projecting those needs that are satisfied by our product or service.  It is those needs that will make the customers pay their hard earned money.

But it should be remembered that “Marketing is all about creating a perception that satisfies our customer’s needs”.  For a clear understanding, lets see the watch industry where the cost of watches on the market ranges from a few pounds to millions. So what need does the watch satisfies to its customers? A customer who purchase Rolex wanted the watch to be much more than a piece of instrument that shows the time. Marketing such expensive brand is about creating such perception so that the customer is convinced to pay a huge price.

Similar to that, most of the people will be happy to pay more for Coke though they might get a Tesco cola for very cheap price. Therefore marketing is not just about the product. It is all about the needs of customers and creating a perception in the customer’s mind.

Just because the businesses don’t have the financial capability to spend millions in tv advert, understanding the need of customers should not be lightly taken. From packing of products to the way it is delivered, every aspect is marketing. Business owners should ensure to find their place in the market and satisfy the customers in every possible opportunity.

Rule 2: Understand Your Enemy –Explore their weakness:

Success in war and business relates mostly to the inability or the downside of the enemy. While competing in a war, understanding the weakness of the enemy will ensure an easy victory. Similar to that, understanding the weakness of the competitor will help us to create an easy advantage. Apple used this strategy and blew the problems of Windows Vista to promote their Mac book. Pepsi found a way to point the low taste of coke to capture the market share. Similar to that, if the downside of the competitors is understood, then through Marketing we can brand our business as much better product or service. Customers need a strong reason to choose our product or service and dump the competition. As a business we need to find that reason.  If business owners can’t find a reason to show their product better, then there is no way to convince customers.. By the end of the day, customers should not regret choosing us over the competitor. Our marketing should ensure to satisfy them.

Rule 3: Strategize your Attack:

Out of all rules, strategizing the attack is the most important rule for successful marketing. Three questions should be clearly answered to strategize your attack.

What medium to choose? There are thousand ways to do the marketing. Imagine how many medium we have to market our business? Television, radio, billboard, pamphlet, website, Google advert, social media, email marketing, newsletter, newspaper, magazines, movies, mobile app, and a lot more emerging. So what are the mediums to be chosen and what not to? The answer varies from business to business. But the medium chosen should connect your business to the customers in cost effective ways.

Is is attractive? Customers nowadays  get bombarded with marketing from all sides. But how many of them actually attract our attention? For instance, we get a lot of pamphlets every day in our mail box. But how many pamphlets do we actually read? Most of them go straight to the dustbin. Most marketing emails are marked spam and even customers flip channels during a TV advert. The attention span of customers has gone down so much recently that a boring advert is actually a total waste of money. If the advert is attractive enough, business doesn’t need to spend on marketing at all nowadays. On the other hand, attractive videos go viral and people love to share interesting information.

Finally, How are we going to convince? The beliefs over the advert by the people have gone down a lot over the period of time. Customers have been cheated a lot of adverts in the past and they are now more cautious on what to believe and what not to. They fear to deal with newcomers and therefore it is a challenge to convince them.

 It is impossible to do all the marketing activities by business owners themselves. Therefore they tend to seek for assistance from some of the marketing firms. In most cases, marketing firms do what everyone else does and fail to do justice to the payment they receive. If a business owner doesn’t know what to expect from the marketing firm, then can only sit and pray for the best. Understand what you are going to get  out f marketing so that each and every penny spent can be well utilized.

Rule 4: Identify the free resources:

It cost millions to use Television as a medium. It cost thousands to use radio to market our business. It cost hundreds of pounds if a pamphlet is used as a medium. So business might have some hesitation to choose one and leave the others. But “there are lots of mediums out there that doesn’t cost even a penny to use”. The social media like Facebook and Twitter have increased so much the opportunity of the businesses to market themselves for free. Blogs, websites, some interesting videos on YouTube are all goldmines if properly utilized. Some of the YouTube channels are given millions of pounds in advertising commission and a lot of people are doing it as a full time job. All these new mediums will actually take time to build. As long as the content is good enough to spread, getting into the market for free is never easy as it is now.  If small business owners fail to utilize these free mediums to grow and spend with paid medium, it is equivalent to sitting beside a well and starving for water. The budget should never again be a reason for poor marketing. As long as there is a will, there is a way to prosper for Business owners.

Rule 5: Use Your Reputation:

If there is a way to win a war without shedding a drop of blood, it is through reputation. Great kings use this as a powerful weapon to expand their kingdom. Kings use their reputation to capture the small kingdom around them. Whenever their reputation is used, the effectiveness of growth grows multiple times. Using Reputation works in business as well.  More than 80% items sold in the retail stores are repetitive items. Customers that get used to a brand will most likely stick with it as long as it satisfies all their needs even if they need to pay a little more. Building reputation is very important in survival. Most start up business find it hard to enter the market because of the existing reputation created by the competitor. Breaking such reputation is usually hard and that is the reason initial stages of business are very hard for new Entrepreneurs. But once the reputation is created, business should use every opportunity to reap the potential and grow forward.

Finally:

Usually the difference between success and failure is very thin. Most of the business will be actually thriving in that thin line where they manage just to survive in the tough market. But when the gap between the success and failure is widened, then there will be no looking back. It is easier to say than to be done.

Having a professional assistance especially from a third person will not only help with bringing focus, but will also bring new perspective to the table. If you want such external service, we can work together. Check the link for more detail.

Building a business for you part 1

PART I

The Army:

During the early 13th century, Muhammad, the shah of Khwarizmi, ruled a huge empire after many successful wars. His empire extended west to present day Turkey and south to Afghanistan. He had a massive army of 400,000 warriors at his command which gave him a huge confidence to challenge anyone. He ended up challenging the nomadic tribe leader, Temujin, who was in his initial stages of growth. Little did he know that this seemingly innocuous act would result in his empire’s fastest demise. Little did he know that Temujin, who was also called Genghis khan, was the great strategist history has ever produced.

Though Genghis Khan had relatively a very small army compared to Muhammad, his style of warfare was novel at that time. Compared to the slow army of Muhammad, Genghis khan’s army was very fast (as their soldiers were trained to fight with arrows while riding on horseback) and powerful. More than anything else, Genghis Khan was a great leader and motivator. Wherever he found talented warriors, he embraced them and joined them in his growing army. When Genghis khan’s army attacked Mohammad, they were able to create panic and fear in their enemies. They used Guerrilla warfare and raided the massive army of Muhammad. Eventually within a year, Muhammad was driven away from his homeland and had a miserable death.

Running a successful business is like leading a kingdom. It is hard to sustain especially if the sector is attractive with a lot of profit. Competitors will emerge very fast from all directions to capture the customers. No longer is size the only deciding factor for victory anymore. The strength of a growing business lies in its ability to create products or services that can challenge the competitors. If such a powerful product or service is built, then any big corporation can be challenged and captured. Like Genghis khan, a new empire can be created out of nowhere.

Though the stages of developing such products or services differ from business to business, we will briefly discuss the basic five stages of strategy that are common to all business in this section.

Choose a Path:

A lot of new businesses emerge out everywhere. Some of them succeed starting from the owner’s garage with a few hundred pounds whereas some businesses fail even after millions in investment. If we look closely, the success and failure depend a lot on the path chosen by the business owner or Entrepreneur. It is the first step in creating the strategy. It is “Choosing a direction to lead”.

To understand better, we should see from the customer point of view. Customers now are bombarded with a lot of options. Whatever they want, they always have options. Depending on their taste and purchasing power, they always have a choice. But what makes a customer to choose a particular brand over another? Is it always cost or the style or image? The answer is always different. Choosing path means choosing a reason for the customer to select us. While a lot of retail clothing store closed in the last year alone, two companies went from strength to strength. These companies have revenues in the billions while their competitor filed for bankruptcy. Those billion dollar companies are Primark and Zara. Primark chose cost as their path where they provide the goods at the cheapest price available in the market. Zara chose design and style. They made sure to bring the best product to the customers in the shortest possible time.  Both these companies operate differently with a different set of customers. But, both these companies gave every reason for their customers to choose their product over their competitor.

Every small business should identify such a reason and convert them as their vision of the company. The business should be built over that single primary reason where customers treat you are the leaders. It should be the reason for customer choosing over you and dumping the competition. The reason might be anything. It might be cost, trust, quality, style, elegance, image or just convenience.  Most often small businesses lose their focus on their vision and tend to run the rat race. They start to do what everybody else does. They start imitating the competitors and end up destroying their own identity.

Even as a tribal leader, Genghis Khan had a clear vision to unite the various nomadic clans and build a massive empire. It was this clear vision that enabled him to create an army which was capable of defeating bigger forces. It was the same vision that helped him to create novel warfare tactics that shattered the massive army of Muhammad.

Create the Weapon to lead:

It is very easy to choose any path. But it is very hard to lead the path and defend it from competitors. This stage is all about creating the right tools to fight with the competitors and become as the leader. Any powerful king needs a strong army to defend and expand. Similar to that, leading in a sector will require powerful operation so that competitors find it impossible to compete.

Wal-Mart started as any other convenience store in a small part of US. They too started buying products from manufacturers and started selling to the customers as like their competitor. But they chose to lead the path rather than like any other convenience store. They started finding ways to reduce the cost of the products and passed the benefits to their customers. They improved the way they source the goods and made sure to improve it little by little. Their store’s reputation also improved from time to time and they started expanding from one to many. Now they are as powerful as an empire. They can change the fortune of a small supplier by a single contract. It is not only their sheer size that prevents competitors from fighting with them. It is the tools that they developed over the time with the operations. It is the backbone over which their entire kingdom is built.  There are other equally big stores like K mart in the US which sells similar products. But it is the operations of Wal-Mart that makes them to be the leader in their field.

Let’s get back to small business owners. Where should they start with? They should start within themselves and the key to success is control. Most of the small businesses fail because they don’t have control over their core operation. The problem with the workforce, the problem with the supplier, problem with creditor, debtors are like diseases. Without curing them, it is hard to wage war against competitors. If these kinds of problems persist, it is hard to survive in the long run.

Once the problems are fixed, then businesses should start converting the basic operations into strengths which are hard to compete with. Converting the operations into strengths varies from business to business. Dell found a cost effective way for customers to select the configuration. Ikea found a way to source their furniture at the cheapest price available in the market. Toyota built their factory so that all their products were guaranteed the best quality. All these companies improved their operations and converted them to success.  As long as these kinds of strengths are built, there will be no fear from the competitors and business can thrive all around the world.

Identify your Allies:

The result of wars are not only decided by the size and power of the army, it is also decided by the power of the allies. The result of the war changes just by inclusion of one more additional allies. Similar to that, the success of a business change dramatically by having one more additional business contact. There is a misconception that the larger number of contacts, better it is. Business owners tend to attend a lot of networking meeting to grow the contacts. However the influencing capacity of the created network is more important than number of contacts. Having a few powerful and influential business contacts makes a lot more difference than having a lot of contacts who don’t have any influence on your business.

While extending our network we should remember one important lesson from the war. No allies will come to help if they don’t get a share of the victory. Similar to that, business networking will never work if it is not beneficial to both the parties involved. If the network is built on the mutual benefit and trust, it is easier to grow the network and build your business. If your business have a successful product, big players like Tesco or Argos will love to partner with you so that they can make money as well. If not however powerful the networking skills, they will not bring in any value. In order to be more influential, it is important to build a product or service that will attract other business owners. If we are successful in building such advantage, even big players would love to partner with us and prosper along with us.

To start with

  • First choose a business partner who will ideally take your business forward. They should have the power to take your business to the next level.
  • Second, try to find all the benefits that you can give to those chosen partners so that you appear attractive to them. Partnering with your business should appear so attractive that they should welcome you with the red carpet.

It was the partnership with IBM that made Microsoft the most profitable company. It was the partnership between Google and Samsung that helped them capture most of the market share back from Apple.

Retain the Power:

One of the biggest problems with small businesses is that they find a new competitors emerging out of somewhere and taking a bite of their profit. The new competitors generally undercut the cost and lure the customer to switch over easily. In the worst case, big corporate enters the market and wipe out the small business owners. Small business owners are always in such threats. How to get protected from these kinds of threats?

These kinds of problems happen in the fighting kingdom as well. Powerful empires fight against each other for fertile lands. Once captured, their next biggest problem will be to protect their territory from the enemy. Whether it might be the kingdom or the business, the answer to the problem is same.

The solution is to get connected to the customers or the people. In case of kingdom, once they capture a land, they will try to form a stable government involving the people living in that land. The key to their success is to make the people in the captured land feel as part of the big kingdom. If there is any internal opposition, it is an easy opportunity for the enemy to come back. In case of business, if a relationship is built with the customers, then it is never easy for anyone to get in. The relationship is built over trust, quality and reliability. Big brands guard such relationship as much as possible. It might be Apple or Samsung or Nike or BMW or Toyota, they all have their fans built by creating such relationship. If small businesses start creating such relationship, new competitors will become their least concern.

Don’t Mistake Silence for peace:

Every kingdom will have prosperous times and hard times to face. Similar to that, every business will have easy and hard periods in their growth. Only those kingdoms that took enough action to build its resources during peace will ensure survival during war. Only those businesses that take enough action to build its resources during prosperity will ensure success during tough economic times.

The automobile industry is one of the toughest industries to compete with. As the profit is more, the competition is also huge. Though established car makers might already have a successful model, they should ensure to spend enough on R&D and add features to their existing product. If they mistake their success as permanent, then it is only a matter of time for a competitor to crush them. Brands like Austin, Riley, Rover and Triumph were wiped out of the market because they failed to improve and relied just on the past success. The competition in other sectors might not be as vigorous as in the automobile industry but stagnation will definitely lead  to Failure. Failure to improve is fatal in any business. While your business is successful, enjoy the benefits and also keep an eye on the competitors.

Why do we need a strategy?

Why do we need a strategy?

Strategy is one of the business jargons that scare most of the small business owners and new Entrepreneurs. Actually most small business owners don’t even bother to know about strategy as it sounds like one another textbook terms which don’t work in real time. And some Entrepreneurs believe strategy is only for million dollar luxury brands  having deep pocket to spend on additional departments. But why should scholars and professors of leading educational institutes around the world press so hard on the importance of Strategy? What in reality is strategy? If it is needed for business growth, how are small businesses surviving without them? Dictionary meaning point’s strategy as a plan of action designed to achieve an overall aim. Is Strategy just a business term for planning as pointed in the dictionary?

The answer is a Both YES and NO.

Yes, Strategy is planning. But it is not just one of the common budget plans that corporate firms carry out as part of their operation. It is not any other monthly plans that small business owners and sole traders do to carry out the day to day activities. Strategy is those plans that can help small armies to defeat massive empires. It is those plans that will ensure business sustainability and even prosper during hard economic times. It is those plans that will empower small businesses to fight against mighty corporate. It is those plans that can enable small business owners and Entrepreneurs to emerge as successful corporate empires. And the final question, “Why do every business need strategy?” The reason is very simple. Strategy is like a compass of the ship. If you don’t already have one, it is very important to have not only to reach the destination but also to compete with the competitor. The difference between successful business and a struggling business has been never the number of working hours. It is always the clear planning to succeed which is called Strategy.