PCWorld don’t sell Pizzas 7 April, 2009
Posted by varoom in Selling.add a comment
Apologies to PCW as I’m sure they could sell Pizzas if they really put their minds to it! This point is related to the importance of choosing the right sales channel for your product based on skills and customer recognition. Two main problems with selecting the wrong sales channel, firstly the channel may not be skilled to sell your product and secondly, much worse, the customers will not recognise the channel as a supplier of products of your kind.
In order to select the right channel, initially you will need to do detailed analysis on buying practises in your targeted market and use this data to drive the development of your channel strategy. How do customers find products like yours, where do they expect to find them, how do they normally purchase these products and how ingrained are these behaviours? Getting customers to change these behaviours can be quite difficult, your sales channel strategy needs to take account of what behaviour change you need.
One sales channel strategy is a partnership with a major player in the supply chain. In one agreement you can avoid creating a new channel and also build credibility with customers by being associated with a known supplier. There will be some effort for the first channel partner to take your product, there is some risk too, so be ready for them to request some exclusivity even for a period of time.
Another mechanism is to adopt a disruptive approach. Enter the market deliberately through a unique channel to cause a breakdown in the existing pipeline and force players to change their approach. To do this you need a disruptive product or service which compels the market to take it seriously. Not all products can do this and you need to consider, carefully, which approach is feasible.
There are many past examples of channel disruptions, EasyJet with it’s internet based solution caused a behaviour change in the buying practices of travellers, Amazon caused a change in buying practices of book and music buyers, other examples being EBay, Google, and Dell.
The success of your product depends on having the best sales channel, gaining behaviour changes in the customer base is difficult unless there is a further disruption that helps your strategy succeed.
When you enter the marketplace not everyone will welcome you but adopting the right market entry strategy can make a big difference to your business.
Grev
37% of strategies fail 15 March, 2009
Posted by varoom in Strategy.1 comment so far
On reading a Harvard Business Review article by Mankins & Steele in 2005 I found it very useful to study the causes for failure in strategy development and implementation. The word strategy has become an overused and misused term in modern business. We attempt to make something more important by attaching the word strategic to it whilst failing to really make things change. Having set long term goals your strategy is a plan on how you will achieve them and this strategy must lead to actions or it is doomed to fail. So in short your goal is what you want to achieve and your strategy is how you will achieve it.
The Mankins & Steele article studies the failures of strategies and a lot of these failures occur during the implementation of the strategy. These failures fall into many categories but can be summarised into;
- Inadequate resources
- Poor communications
- Poor definition of actions
- Unclear accountabilities
- Organisational culture blocking strategy
- Inadequate monitoring
- Inadequate consequences or rewards
- Poor or uncommitted leadership
- Inadequate skills
No matter how much time, effort and research you put into developing your company strategy if the organisation is not engaged or the resources are not available or you do not follow though with strong leadership, your efforts will be wasted.
So in order to be successful in implementing your new strategy you should;
- Develop resource plans, and allocate resources to implement the new strategy
- Define the required organisation structure to deliver on the strategy
- Communicate to convince the organisation to engage with the strategy
- Manage the change(s) within the organisation, avoid distractions
- Monitor, measure, feedback, assess
Make your strategy more successful by ensuring change occurs then communicate the successes resulting from those changes.
Grev
Your investor proposition is like a 3 legged stool 24 July, 2008
Posted by varoom in Business Plans, Investment propositions.add a comment
As I regularly prepare companies for investment readiness I’m asked many times what investors are looking for. This is a tricky question especially in these credit squeeze times. However many significant investment funds were financed before the current crisis and may be in a position to invest if the proposition is right.
So what is the right proposition? The situation varies with each investor, timing of their funding, the mix of their portfolio between risky and conservative, between types of technologies or industry sectors, between companies needing a great deal of management involvement and those with a strong team who are self sufficient.
If we meet the ideal investor with money to invest, a healthy portfolio and management capacity to take on another investment. He’s looking for opportunities where his investment will take the company onto a high growth path at a time where the investment risk is at its lowest.
You just have to make your proposition in terms that maximise the potential for growth and minimise the risk.
Once you have passed this hurdle then you start being judged against many criteria in order for investors to choose between the many proposals they have.
In order to simplify this I’ve conceived an analogy. “Your investment proposition is a 3 legged stool”. If you have a weak leg you risk falling on your Ass.
So I believe the three legs are;
First you must have a market or business opportunity for growth. There needs to be a big enough opportunity, measured in terms of accessible market, market share, market growth or raw business potential.
Second you need to demonstrate that you have already got or will soon build a strong team that can deliver on the potential business opportunity reducing risk.
Thirdly defend your position, in the market, with intellectual property, trade secrets, patents, copyrights, know-how, first mover advantage which prevents other competitors from entry. Reducing risk and increasing value again for the investor.
If you can demonstrate that you have three strong legs to your proposition you may get through to the next round….
Grev
