Category Archives: strategy

Retail is dead

Hah! They said that about the horse & buggy industry.

shoppersWe’ve been saying it about retail for over fifteen years.  E-commerce is coming, catch the wave or be drowned by it. Soon there will be nobody left but Amazon, eBay, and Alibaba.

Maybe this Christmas shopping season will be the final slide into oblivion for traditional real-world retailers. Or maybe not?

They’re not all losing to online. This week’s shopping excursion did expose the disturbing site of Sear’s liquidation sales at one end of the mall, but BestBuy and the Hudson’s Bay seemed busy and full of real shoppers.

Survival of the fittest still applies. The laggards at the back of the pack will get picked off by the predators. You can’t hide, but you don’t have to roll over and die, either. Evolution and survival requires adaptation.

Pay attention. Learn from new competitors and their business models, online or otherwise. Copy what seems to be working and can be used to attract and retain your customers too.

The latest versions of the new economy may include robots and artificial intelligence, drones and resource-sharing, but some old rules still apply:

  • Do your homework before trying to implement new technology.
  • Focus on your business objectives, not on what’s cool, or hot, or trendy.
  • Do not stubbornly fail to fix what is clearly broken.
  • Flip the old WWW on its head and remember MMM – Manage, Monitor and Measure.
  • Too many new initiatives are driven by fear or greed. Be smarter than that.

Be better. Do better.

Your Uncle Ralph, Del Chatterson

Visit LearningEntrepreneurship.com or contact DirectTech Solutions at www.DirectTech.ca for assistance on your strategic business issues, growth and profit improvement plans or your exit strategies.

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Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.  

Breakfast Strategies

More than 2 scrambled eggs, bacon, coffee, toast & jam.

bacon & eggs (2)I have been working to establish a new family tradition of big boys’ breakfast on Sundays for grandpa, sons and grandsons. The variety of breakfast spots has been a useful lesson in strategic positioning.

The specialty breakfast restaurant is a well-established concept, especially in Montréal, starting with Chez Cora, and is now a very competitive market with lots of attractive choices. How do they all survive?

Here’s what we’ve learned, so far.

First: Accept the business model where it’s clearly working. Breakfast and lunch only, located in a high traffic area for large volume and fast turnover in a few working hours. Appeal to the most likely prospects, business people and professionals, retirees, dining alone or using the spot for business, meetings and social groups.

Second: Be distinctive. Make choices on the menu, pricing, quality and quantity, design and décor, staffing, uniforms, style and personality. Be consistent in all of those choices to reinforce the strategic positioning.

Choose from the MacDonald’s and Tim Horton’s style of limited low-budget choices, fast and cheap. Or consider more variety, larger selections, larger portions, more creative menu items, gourmand versus gourmet, extravagant versus exotic, home-style versus chic. Ensure high quality food and friendly, efficient service.

It’s seems to be a simple formula for success: make good strategic choices and be consistent in execution of the strategy. It works for more than restaurants.

The research continues.

Be better. Do better.

Your Uncle Ralph, Del Chatterson

Visit LearningEntrepreneurship.com or contact DirectTech Solutions at www.DirectTech.ca for assistance on your strategic business issues, growth and profit improvement plans or your exit strategies.

Join our mailing list at LearningEntrepreneurship.com for ideas, information and inspiration for entrepreneurs.

Read more articles at:Learning Entrepreneurship Blogs. 

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Chasing the big deal

Many small deals may be a better idea

big dealWhen you know that increasing sales will solve your problems, it is tempting to chase the one big deal that will get solve them all quickly. It could be a mistake. Maybe it’s better to say, “No thanks, for now.”

It can be great for your ego and your brand if you win a big deal and make the headlines. But it may be only a short-term win based on a small price difference, product improvement or service innovation. You may simply be a temporary negotiating tactic between the customer and their regular supplier. Don’t get too comfortable. The big guys will not leave you alone for long and they will not make it easier the second time.

Wining that big deal can solve some problems, but it may introduce new ones. Do you have the resources, suppliers and financing to deliver as promised? Will you now be too dependent on one big customer? Will your other customers be concerned, disappointed or feel neglected and start to leave? Have all the risks been considered?

Before even making a presentation or proposal on that tempting big deal, be sure to check that it fits with your strategic plan. Are you matching your competitive strengths to a clear long-term opportunity? Or are you “swinging and hoping”? Will you be able to build on this success or are you making an all-or-nothing bet?

Building your business slowly but continuously one customer at a time and one deal at a time will make you a stronger competitor and more likely to become the next big guy doing the next big deal.

Be better. Do better.

Your Uncle Ralph, Del Chatterson

Contact DirectTech Solutions at www.DirectTech.ca for consulting assistance on your strategic business issues, growth and profit improvement plans or your exit strategies.

Join our mailing list at LearningEntrepreneurship.com for ideas, information and inspiration for entrepreneurs.

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Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

Strategic choices: Porsche or Pick-up truck?

Focus and forget pleasing everybody.

Porsche-Boxster-S-front

Whatever business issue or challenge you are facing, I believe you should always start from a strategic perspective. Step back, way back, and ask yourself if the solution you are considering is consistent with your strategic plan and will move you toward your long-term objectives.

 Have you made explicit strategic choices and communicated them effectively to your employees and your customers? Or are you too busy with operational issues and management challenges to think strategically. Often the strategy has just evolved organically, as you respond to changes in the business environment, the competition and customer preferences. Perhaps it’s time to assess where you are strategically and decide if that’s where you want to be.

In order to clarify a company’s strategic positioning, branding and corporate personality, my colleague Lp Camozzi and I used to ask clients the question, “If your business were an automobile, what would it be?”

Confusion and contradiction were often evident. And even more revealing was to compare the owner’s answer to the automobile suggested by managers, sales staff and customers. Owner thinks Porsche and customers think pick-up truck? We have a problem.

For better strategic focus and improved results in the market, clarity and consistency are important. First determine the characteristics, features, and performance of the automobile you would prefer for your corporate role model. Then maintain that strategic focus and ensure consistent communication of the key elements in all your internal and external messaging.

And forget about being first with a Porsche-Pickup that is sporty, luxurious and has good cargo carrying capacity.

Remember that the camel started out as a race horse, designed by a committee to please everybody and failed miserably (unless you need to travel long distances in the desert).

Your Uncle Ralph, Del Chatterson

Read more at:Learning Entrepreneurship Blogs. 

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Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Choosing your response 

Strategic or Operational?

Question-Exec-SummaryEntrepreneurs are by nature action-oriented and they trust their instincts. So they are quick to assess any new challenge and decide on a response immediately. But before leaping into action, it is important to ask yourself an important initial question: It is a strategic issue or operational issue?

The answer will help you make better decisions about both the immediate response and the long-term action required.

Consider this example: You’re about to complete your month-end reports when suddenly your system freezes then crashes and you cannot access the files again. Sounds like a crisis that needs urgent action, right? But before you launch into the operational solutions and call tech support, run the back-up, or install a software patch, ask if there is a strategic issue to be resolved here. Especially if this has happened before.

Have you outgrown the software? Is your hardware sufficiently robust and reliable? Are the staff adequately trained? These are long-term issues that may need to be addressed. The problem may need to be fixed now, but how can we prevent it happening again? What needs to change?

And most importantly, what have we learned that we can apply in response to future challenges.

Keep learning, to be better and do better.

Your Uncle Ralph, Del Chatterson

Read more at: Learning Entrepreneurship Blogs

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Qualifying Questions

Is it Strategic or Operational?

Before leaping into action, it is important to ask yourself some qualifying questions and make better decisions about both the immediate and the long-term action required.

Entrepreneurs are inclined to act instinctively and “just do it” when they are presented with a new challenge, opportunity or problem. No time wasted. Let’s not make it complicated. Generally, that’s an important trait for making progress quickly. But often, a quick assessment of the strategic and operational issues will lead you to better long-term results.

Think about it. Your wagon was rolling smoothly down the track, but on the last curve it suddenly flew off the rails. It happens, right? Well, before you yank it out of the ditch, set it back on the rails and push it down the track, ask yourself some qualifying questions. First operational, then strategic.

Is there a flaw in the track or something broken on the wagon? Does it need to be fixed now? How can we prevent it happening again?

Then, are we on the right track? With the right wagon?

What needs to change?

And most importantly, what have we learned that we can apply to future challenges. Keep learning, to be better and do better.

Your Uncle Ralph, Del Chatterson

Read more at: Learning Entrepreneurship Blogs

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Demonstrated by the street vendors in Rome

umbrellaWhat entrepreneurs do best is identify an opportunity and respond to it. They observe the market, test customer response, and then deliver what works at the right time and place.

In Rome this week, I noticed that the street vendors had almost all decided that the thousands of meandering tourists were most in need of either bottled water or a selfie-stick. Those were apparently the best-selling impulse items and they were offered everywhere. I did appreciate the water bottles during long tours of the ancient ruins in the hot sun, but was already hating the forest of selfie-sticks that were invading all my carefully composed souvenir photos and did not want to join in the contest of who could get their cell phone out in front of everyone else.

The street vendors’ sales strategy was simple and effective. A quick assessment of the passing prospects, a polite query then a quick decision to sell or move on to the next prospect. No time wasted on harassment or an obnoxious sales pitch. Pricing was competitive, one Euro for a bottle of water where the vendor was one of many and had a large stockpile and two Euros if he was alone in a remote corner with limited stock.  The vendors also knew they were competing with free refills from available public drinking fountains, so they all sold branded, sealed bottled water that was ice cold.

But most impressive was their response to an unexpected thunderstorm and downpour chasing all the tourists under cover.  Like magic, suddenly all the street vendors were offering small collapsible umbrellas and cheap plastic rain ponchos!  Quality and price were not an issue, we needed them here and now, so sales were brisk for those that had them.

All good tactics for successful entrepreneurs. Whether you are a street vendor, a technology guru or a small business owner.

Be ready to respond to your market, rain or shine.

Your Uncle Ralph, Del Chatterson

Read more at:Learning Entrepreneurship Blogs. 

 

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

 

Business is Like Golf

Easy to get into trouble and hard to get the results you want.

golf drivingIt is the season again to get out and enjoy a round of golf. (Unless you’re one of those people who would rather eat sand than try to hit a golf ball straight for 400 yards and then roll it into a 4-inch cup.)

It is a very simple and enjoyable game, or it’s a terrifyingly frustrating challenge that can drive you crazy. Again very much like business, you can love it and enjoy it or hate it and avoid it like a bad case of food poisoning.

You might think you are sufficiently smart and talented to succeed, but you may fail miserably in your attempts at both. There is value, therefore, in recognizing that you can learn from golf how to do better at business.

Have a strategic plan, master the fundamentals, and focus on execution

The first step is setting goals and having reasonable expectations. If your objective is to be a world class competitor, you will have to start early and work hard to develop the skills, knowledge and experience to win. In golf, that means swinging a club by age six, practising every day until you make the college team, then dropping all distractions, like a social life or a day job, and dedicating every effort to perfecting the skills and mental attitude to win against the best in the world.

If it’s already too late for that or you are not motivated to that degree, then adjust your expectations. Maybe you will be satisfied with occasionally breaking 100, or making par on the odd hole or even a rare birdie might be enough to keep you going.

As you play the game and watch the pros more often, you will also notice that it is important to have a strategy for each round and for each hole. Like in business, choosing a strategy is the same process of matching your strengths and competitive advantage to the opportunities that are presented, while avoiding the risks associated with your weaknesses.

Achieving good results requires having the right strategy, making good decisions, mastering the skills to deliver according to your plan, and then focusing on execution in spite of the stresses and distractions presented by the environment and the competition.

Sound familiar? Business is like golf and golf is like business. Don’t you agree?

But please remember to enjoy the golf, especially if your intent is to take a break from the challenges of your business. You do not need more stress created by unreasonable expectations. Arnold Palmer has been quoted as advising an angry amateur he was playing with, “You’re not good enough to get that upset by a bad shot.” Another good lesson from the world of golf.

Have a good day, occasionally hitting one long and straight.

Your Uncle Ralph, Del Chatterson9781496932259_COVER.indd

Read more articles like this one at: Business is Like Golf Blog

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Check outUncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Responding to Challenge #1:

Strategic Leadership & Management Effectiveness

Keep your Balance

balanceIt is easy for owner-managers to get pre-occupied by the daily demands for attention – chasing opportunities, resolving customer complaints, managing employee performance, satisfying business partners, governments and the bank.  Stepping back to look at the big picture and assessing performance against the original strategic plan is easily neglected.

That remains the entrepreneur’s No.1 Challenge: balancing the need for strategic leadership with the demands for operational effectiveness.

Too busy fighting fires to work on fire prevention?

To succeed in building a long-term sustainable business, it is essential that owner-managers find the appropriate balance in applying time, effort and resources to both strategic leadership and operations management.

Two issues, three steps to success

My approach to managing that balance is to apply the same three steps to each issue.

Strategic Leadership

1. Assess performance

Continuously assess market conditions, customer feedback and the competitive landscape. Check that your intended strategic positioning, branding and corporate culture are in line with current customer and employee perceptions.  Confirm that you are correctly matching your strategic and competitive advantage to market opportunities

2. Revise the plan

Review and revise, if necessary, your strategy, concept and business model.  Update your Business Plan and marketing communications strategy.

3. Make improvements

Launch the new plan internally and provide strategic direction and support to the management team. Prepare new marketing communications and sales tools and take them to market.

Management Effectiveness

1. Assess performance

 Regularly assess operating and financial performance by monitoring key indicators against your plan, industry averages and the best performers in your business.Survey employees and customers for satisfaction levels and feedback on areas for improvement.  Maintain current and effective employee performance reviews for management and staff.

2. Revise the plan

Identify deficiencies and set new objectives for performance improvements. Update the Business Plan and internal performance objectives for management and staff.

3. Make improvements

Define and develop improvement projects and provide necessary management support and resources to achieve the objectives.

A simple process, but not easy. Achieving balance in managing business strategy and effective operations is still a challenge.

But worth continuous attention.

Your Uncle Ralph, Del Chatterson

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9781496932259_COVER.inddThis article is from Chapter 4 of Uncle Ralph’s, “Don’t Do It the Hard Way”.  Read the book.

Challenge #1: Strategic Leadership + Management Effectiveness

Start with a plan.

 As we started our e2eForum on a bright sunny spring morning, this was on the flipchart:

The Entrepreneur’s Challenge:

Strategic Leadership + Management Effectiveness

It is my favourite theme and I had been asked to decide on today’s discussion topic, so there it was. Some around the table had heard me rant on this subject before, so I was trying to approach it a little differently.

“Today I’m going to start by admitting to you my own biggest mistake as an entrepreneur – failing to continually think strategically. I was too often pre-occupied with operating issues and short-term problem solving. Stuck in the old dilemma of too busy fighting fires to ever work on fire prevention.”

“This was especially true in my first business, computer products distribution. There was so much detail to keep on top of – markets and technologies, customer service issues, managing employees and learning everything I had to know as a new entrepreneur about the running a business – from accounting systems and freight rates to lines of credit and payroll deductions.”

“I had all the usual excuses for being drawn into the daily crises and never getting back to the drawing board to review the original strategic plan and see if we were still on track. To be honest, our original plan was not very strategic and never looked past the first two or three years. It was only focused on making our numbers, not on strategic positioning and managing our important business relationships. We made good short-term decisions to maintain profitability and win our share of competitive battles, but did not effectively protect ourselves from conflicts with our major suppliers and were not prepared for the rapid decline in profit margins as competitors flooded the market.”

“We started business in the mid ‘80’s when IBM personal computers and the clones and compatibles were first landing on desktops everywhere – in offices, schools and homes. With our one primary product, computer monitors, we were initially competing with only about six major brand names and four other regional distributors.”

“Our customers were primarily the local computer stores that were on every second street corner and in every shopping centre. We were selling a few hundred monitors a month and average profit margins were at 12% to 14%; pretty healthy we thought. But high profits and fast growth brought a lot of competitors into the market. By the mid ‘90’s we had over forty competing brand names and at least twenty competing distributors. Profit margins in distribution slid to about 4%; no longer healthy. Our volume was up to ten times over our second or third year, but net profit was the same and we now had huge risks in inventory and receivables.”

“That’s when I made the decision to enter into the merger which would have helped us to diversify our product mix and customer portfolio and reduce the risks. Unfortunately, the merger didn’t work so we wound it down and I subsequently left the computer hardware industry about two years later. Very quickly after that consolidation eliminated most of the players in the personal computer market – only a few major brand names, three large multinational distributors and three or four national retail chains remained by the year 2000.”

“Any survivors from that era had to be very good at re-positioning their businesses to keep up with the rapid evolution of the computer business.”

“Your own business may not see rapid change like the computer industry, but I’m sure that whatever business you are in, technology and the Internet continuously affect how you do business. You have to adapt to keep up with changing competition and new customer expectations.”

“Don’t make the mistake I did of getting lost in the operating details and neglecting to raise the periscope and scan the horizon for oncoming threats or opportunities. Be prepared to respond.”

Keep your head up

“I do try to keep aware of what’s on the horizon,” said Dave, “but sometimes I have very limited choices available for my response. We expect our manufacturers to keep up with the technology and the competition and our bike dealers to do a good job of attracting customers and making the sale. As the national distributor, we provide the pipeline to market, but we need the people at both ends to work with us.”

“And it is true,” he added, “even if we’re in ‘old economy’ traditional businesses, we all have to keep up with technology – both to remain competitive and to rise to new customer expectations. The devices and applications all keep getting cheaper, easier to use and more effective at delivering the results. We simply cannot afford to stand still – the competition will beat us and the customers will leave us if we don’t keep sharpening our tools.”

Looking around the table it seemed we all agreed with Dave. Strategic vision and leadership need to be constantly applied to daily decision making.

Lack of strategic direction, in my opinion, may be the biggest mistake for entrepreneurs and can be fatal to the business.

Your Uncle Ralph, Del Chatterson

Read more Learning Entrepreneurship Blogs. 

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Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.