Successful small and medium sized businesses are always on the lookout for opportunities, which can be a problem.

All businesses, and especially small ones do not have the operational and management ‘bandwidth’ to take on too many opportunities, they lose focus and end up being mediocre in the market that made them successful in the first place, as they compromise in order to enable the coverage.

In this terrific cartoon and accompanying commentary, Tom Fishburne relates the contrasting stories of the Mini, one of the most successful cars ever designed, and the Pontiac Aztec, voted one of the worst ever, despite being in front of the demand curve at the time and therefore in a great position to be truly successful.

The problem can usually be distilled down to indifference.

People buy things to solve a problem, scratch an itch. Sometimes that is a simple thing associated with what will I eat tonight, and sometimes it is a personal thing associated with self-image. When it is the latter, creating a situation where there is indifference, where the purchase decision is not driven by a strong emotion, you will end up failing.

Strategy is all about making choices. It is not just a matter of determining what you will do, it is also a matter of determining what you will not do. It is this  latter dimension of choice that always causes the most problems in coming to a conclusion, there is always that bit of green on the other side of the fence.

‘Find a niche and own it’ should be the mantra of every business, but particularly every small business. Be very, very good at a few things rather than average at a number of things.

A former client has a dominating position in a niche servicing the underground coal market in Australia. A dying market if ever there was one. There are several strategic options: expanding into underground coal internationally, and/or expanding into adjacent hard rock mining operations leveraging some of their technology that is relevant to the challenges faced. As there are limited funds available, choices need to be made. Not easy.

One of my mates is a baker, a creative and driven bloke who has successfully built a business servicing the ‘high end’ market in a major city. His business partners now want to expand by expanding operational capacity in order to service the ‘medium’ market  where there is indeed far more volume, but also more competitors with spare capacity, so it becomes a question of price.

Over 40 years of marketing, I have never seen a situation where the dilution of the value proposition benefits the marketer. Customers are not silly, they make judgements on a range of rational and emotional considerations, and they do not consider your operational and financial priorities in those judgements.


Cartoon credit”: is again a wonderful Tom Fishburne production