5 SUCCESSFUL BUSINESS STRATEGIES

Strategy by definition means: A plan of action designed to achieve a long term or overall aim.

Every organisation defines there strategy for business and while some fail many succeed at it. So what is the difference? Difference is highlighted in below Quote perfectly:

Above all, Success in business requires two things: a winning competitive strategy & superb organisational execution

Stephen Covey

In this article I will take you through the examples and details of some strategies but first let’s just simplify the Strategy into 5 broad categories:

1. Product based: In  this the Product is the centre of strategy.
2. Customer based: Customer Experience / requirements at the centre.
3. Idea / Concept based: Basically a Gap in Supply – Demand / Demand creation is at the centre of strategy.
4. Demographics based: A certain region / class / age etc. is being focused in this Strategy.
5. Competition: Targeting competition and its products to highlight your products / offerings.

Now lets dive in to details in each of these categories:

PRODUCT BASED:

 This is for both the Product & Service. Here the main focus is on developing the Product or Service that bridges the gap between the demand and supply to make a strong business case.

Let’s talk about IKEA – there moto has been to create a better every day life for masses. They have variety of quality products which are functional, budget priced, stylish. So they managed to find a niche for themselves and developed a product / brand to serve and monetise.

On service front, we all know a lot of apps in this category – food delivery, shared cabs, radio cabs, logo design, etc.

To discuss about an innovative idea is a small company Dunzo. In layman’s language they are the local courier, minus the disadvantage of dropping the package at the courier shop. They found the pain point and provided an end – to – end solution. Pick-up and Drop packages and that too at a reasonable cost. My daughters school book set was delivered by Dunzo during the last phase of lock-down. They not only deliver documents but cakes as well.

In here the Product Idea is in front of every ones eyes, but the main aspect is finding the Gap and then executing the delivery strategy that is most important.

CUSTOMER BASED:

On a regular basis we find companies launching products, competing in markets, beating the competition & winning the sales – this is typical Product based strategy. Another strategy is Customer Based (I call this a copy-cat strategy). You do not need to be innovative, you just need to have money power to buyout or a strong team to replicate the product.

Microsoft has pioneered this game by far, than any other brand. Its simple for them, let some one do the effort of product launch, testing the market, troubleshooting, etc. Once the product is established, MS will either buyout the company / launch a similar product.

Right in the start they bagged a order from IBM for the operating system, then acquired a small company Quick & Dirty Operating Systems (QDOS), modified there OS to make MS-DOS.

Excel was influenced by VisiCalc & Lotus 1-2-3. Word was heavily similar to a popular software Word Perfect. Powerpoint was acquired from a small San-Fransico company.

To dethrone a popular browser – Netscape, they licensed a browser from Spyglass.

X-Box – Sony Playstation / Nintendo.

There are many such examples. Currently they are focusing on Google with MS team sitting right in Bay Area, in backyards of google.

With its base product the Windows ruling the PC market – they have a strong platform for cross selling. Look at MS Team’s a competitive product to Webex, they are offering it with MS Office as a bundle deal.

IDEA / CONCEPT BASED:

Japan has been predominantly as Tea drinking country, in 1970’s Nestle wanted to push coffee to this tea drinking nation. They hired a psychologist Clotaire Rapaille who mentioned that Japan has no connect with coffee and they will not accept the same,  he suggested Nestle to add coffee flavours in there sweets. This made the young Japanese people accept the taste of coffee from a very young age. This brought about an amazing benefit to Nestle.

From nil coffee sales in 1970 – Today Japan is 3^rd Largest Importer of Coffee in the world. In the instant coffee segment Nestle leads the  market.

So the example is self-explanatory on how an idea / concept based strategy is implemented, driven and can create a huge first mover advantage in the target markets.

The key to this strategy is knowing the pulse of the market. Understand the culture, create an emotional bonding for your product / service.

DEMOGRAPHICS BASED:

In India people are very innovative and they can sell any product on the demographic base. Will the comb be different for men & women? Does the soap need to be different? razor / toothpaste / shampoos / cars / etc.

But day in day out we see this happening on our TV. Toothpaste with a Cartoon character – targeted to your kids, with pink, floral design at your wife and regular targeted at you. So a family of 3 buys 3 toothpastes.

Recently you would have seen a health drink Women’s Horlicks,  Different versions of Shampoos are being targeted at Men & Women, even Face wash are being differentiated between Men and Women.

Above may seem and intelligent idea but these are not so good examples.

Let’s again look at Nestle. When they launched the famous Kit Kat in japan they slightly changed the brand name to “Kitto Katto”. This was a runaway success due to  its similarity to the famous phrase “Kitto Katsu” which means “never fail” / “you will win”. So Kit Kat also became a famous gift product.

Another such example is of the ITC’s Engage Pocket Perfume. They absolutely created a market niche with this innovative product packaging – Pocket Perfumes. Engage (ITC Brand) was first to put perfume in a small pocket friendly packaging. They targeted the teenagers, who would always want to be ready and are always on the go. It wasn’t easy to carry heavy bottles of perfume everywhere, so they created this niche and all other players had to follow.

COMPETITION BASED:

We have all seen a lot of Rivalries & competition targeting, Cola Vs Pepsi, Kingfisher Vs Jet, Microsoft Vs Apple. Main motive here in, is always to highlight what rival misses and take a pot shot at competition.

Let’s look at a little know rivalry which went on to edge of the wire. Dunkin Donuts Vs Starbucks in USA.

Dunkin was a regular Donuts & fast food joint until around 2000. Then they decided to enter the coffee market, launched a variety of espresso’s, latte’s & cappuccino’s  in 2003. Around 2006 they started punching above their weight at Starbucks the by far a market leader.

They targeted Starbucks for there menu, lined up with Italian styled names on it. They advertised with customers having difficulty to order there brew. Though Starbucks did not indulge in this verbal battle, they insisted that quality of their coffee beans is way better than a fast food joint coffee seller.

Dunkin then launched a campaign “America runs on Dunkin” & there CEO also highlighted that they are a beverage company.

Today 60+ % of the coffee market in US is dominated by these 2 players. Around 40% by Starbucks and 20% by Dunkin.

What Dunkin did was by targeting a market leader in coffee segment they made a space for themselves. They created a alternate name in customer minds. So a coffee drinker searches for Starbucks / Dunkin.

So to conclude: It solely depends on organisations and there managements on which strategy they want to play in the markets. its also possible that at one time – multiple strategies could be played in for same products / different products.

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