Once you have started to look at (and keep on looking at) the broad array of internal and external things that we have discussed, you can start to see things that you should do – where there are opportunities and strengths – and things that you should not do – where there are threats and weaknesses.
We will visit in our next post about “Grand Strategies,” which are pretty specific, and for today we will talk about “Generic Strategies,” which are general in nature, but can bring great results nonetheless.
There are several Generic Strategies that can contain the core idea or central truth(s) that you will build your Grand Strategy upon. The ones that we will discuss are Low-Cost Leadership, Differentiation, Focus, and Speed.
Low-Cost Leadership – while having lower prices for your customer is generally an outgrowth of this strategy, that isn’t what we are talking about here. We are talking about having an ability to maintain lower costs than others in the market. You may pass this on via lower retails or you may simply choose to be more profitable. This strategy is employable if you are efficient, have good economies of scale, strong cost controls, lower fixed costs and overhead, etc.
Differentiation – here is where you focus on meeting a need in the market that your customers are wanting better than your competition. It generally means that you have a higher quality product or image (or both) and can generate great customer loyalty. Many vitamin companies have seen this strategy paying off in our marketplace. They have differentiated themselves by doing a number of things – only selling to independent, natural stores, using only natural ingredients, not using fillers and dyes, possibly using Veg-Caps ®, providing first-rate product training and education, etc. Executing this strategy well has given many brands strong sales and loyalty in the marketplace and make them quite popular with both their retailers and the end consumers.
Focus – this is a strategy that I refer to mostly as a “sub-strategy.” It is taking some of the thought process for Differentiation and dialing it down to focus on “totally” serving a niche market. To stay with a vitamin company analogy, it would be coming out with a “doctor’s” line with therapeutic strengths and ingredient combinations that are exclusive to doctors and health practitioners. The market that you are focused on might be rather small, but if you are the major brand serving that market, your payoff’s can be strong!
Speed – The last generic strategy that we are going to look at is Speed. Here we are referring to quick response to customer requests or changes in the marketplace. In many markets, the ol’ “quick or deal” law is in place - if you aren’t quick, you are doing to be dead! I recall in the 90’s when Melatonin got hot overnight. It got some great press and sales increased exponentially! I was calling every reputable manufacturer that I knew to try to get some. Those that were quick got a lot of orders and did quite well. Others…..well, some folks were calling me a year later to tell me that they now had Melatonin. The product was doing well, but I had no need of additional supply.
From these four Generic Strategies, some much more specific Grand Strategies can be built. We’ll be getting into those in our next post.