Successful business owners know they must take into account their market and their competition in determining the right business strategy to implement in their business.
Ignoring these two factors and taking the stance of, if I build it they will come, will lead to business failure.
Strategy
In a market where the business owner has little wiggle room when it comes to pricing their products and services it's necessary to find another method to gain a competitive advantage, which equals happy customers and lots of them.
Recently at a local business meeting I "mentioned" the higher local prices to a business owner. This owner proceeded to explain to me that he didn't want to compete on price alone but on Service. He wanted to be thought of as the "Nordstrom" in his industry.
Now I'm a long time dyed in the wool Nordstrom shopper, so when he said, "be the Nordstrom of his industry and compete on Service not price" - I got it.
I decided long ago it was cheaper in the long run for me to pay Nordstrom prices because if I bought and then decided I didn't like the item for any reason I Never had any problems returning it, unlike other department stores who insisted on a No Return Policy. In addition Nordstrom's customer service is excellent with their sales force willing and happy to help you whether you're buying or returning. I am a loyal customer for this reason and since Nordstrom continues to grow and profit I can only assume that many feel the same as I.
Now this local business owner knows he can't compete with larger stores who offer the same products at a lower price so he determined to be competitive by using Service as his competing business strategy. Once I understood the "Nordstrom" service mind set behind his products I became his willing happy customer.
This business owner did 2 important things with me: (a) by mentioning a well known company, Nordstrom, and aligning his store with their name, he made his store philosophy immediately recognizable, likable and sellable (b) next rather than be offended at my questioning he took the time and effort to explain what his business strategy was and why.
Today the small business owner competes with bigger stores who can buy in more volume and charge lower prices. You can also shop over the internet from the comfort of your own home and have it the next day. The Internet has become a bigger threat to the small business than the store down the road.
So then what does a small business owner do? Give up and close its doors? I suppose that's one strategy but if instead you want to run a business and a profitable business with happy customers then "Service" might well be your competitive advantage. I believe most people want to shop in their local areas and they want to touch, feel and see what they buy. Running a business, big or small has always been about finding your competitive advantage and finding the business strategies that work for your business. Service will always be a deciding competitive advantage and like Nordstrom has proven, will bring you happy customers.
Business Strategy - Using A "Nordstrom" Business Strategy Might Be The Key To Your Success
Jean Starling holds an MBA in International Business and is an Author, Business Strategist and Executive Coach. Go to [http://www.leaderstakingthereins.com] to get your Free Leadership Home Study Course and learn how to be the leader that people want to follow. Contact Jean at mailto:jean@leaderstakingthereins.com