September 17, 2010

Compete with the Big Guys!

You find yourself in a market with a giant and want to grow your business - go in another direction. It sounds obvious to take action in areas that the larger competitor is not involved but your focus should be on specific limited and precise areas of your own dominance.
There are examples in the food world of the largest getting beat by smaller companies and their success lessons could lead to your next win.
Take Walmart, the most successful retail chain in the world. The average Walmart store in the United States stocks some 150,000 items and does $72 million in annual sales. The average Costco unit stocks some 4,000 items.
The full line or the narrow line? Which is the better strategy?
They're both equally valid. What doesn't work is trying to stay somewhere in the average middle. Nor does a narrow line necessarily mean lower sales. The average Costco unit last year did $129 million in annual sales, almost 80% more than the average Walmart.
Similar situation in burgers, McDonald's has 81 food items on its menus. In-N-Out Burger has just four: hamburger, cheeseburger, double-double and French fries.
You might think the average McDonald's would greatly outsell the average In-N-Out Burger unit, but it doesn't. Last year the average In-N-Out Burger unit did $2,252,300 in sales vs. $2,140,000.
Too many companies emulate the leader and try to be better, when they should avoid the leader and try to be different. I took this video on a recent trip to an In-N-Out Burger.
What actions are you taking to grow your business? Follow me on Twitter . I want to hear about your success!
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