January 29, 2013
Jeff Carr’s Entrepreneurial marketing or to coin a phrase: How to prepare for battle, is an interesting and relevant topic for me as currently our agency is in growth and the challenge we have is in implementing new structures to the business while at the same time maintaining the flexibility of a start up. In doing so we also need to ensure the work we are doing continues at the same levels of quality and output as it is now. A number of aspects brought up in Jeff’s course touch on things that currently we do not do enough of. These are checking in on where we sit in terms of our market share vs our competitors. Particularly in areas of market innovation that we have previously established.
Some interesting learnings:
What is the Cost of Market share
Of particular interest is the cost of market share in that it is directly affected by company investments in product development, sales efforts, price discounts, and communication activities. However we were not give us any indication on what weighting each of these activities has and what balance we should be expending on these activities which would have been valuable input. Businesses naturally invest in these activities but more commonly in lower profit areas of the business trying to increase profitability to balance out expenditure. This approach however is flawed and the area a company should be investing it’s profits in are the profitable ares of the business to maintain and increase profitability. Another interesting point which some would say is common sense is that increased risk is not directly connected to higher rewards however human instinct does tend to get us thinking that the Higher the risk the higher the reward!
Knowing that the cost of Market share is effected directly by the quality and quantity of company investments as well as effected by the quality and quantity of competitors investments in these areas it shows we need to further analyse our competitors and decide to act and invest as necessary to maintain our market share or not as is decided.T
Kenichi Ohmae’s Model of 3 C’s
The 3C’s Model is a strategical look at the factors needed for success. It was developed by Kenichi Ohmae, a business and corporate strategist. The 3C’s model points out that a strategist should focus on three key factors for success.In the construction of a business strategy, three main players must be taken into account:
1. The Corporation
2. The Customer
3. The Competitors
Only by integrating these three C’s (Corporation, Customer,Competitors) in a strategic triangle, a sustained competitiveadvantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle.
A favorite phrase of Japanese business planners is hito-kanemono, standing for people, money and things (fixed assets). They believe that streamlined corporate management is
achieved when these three critical resources are in balance
without surplus or waste.
For example: Cash over and beyond what competent people can intelligently expend is wasted. Of the three critical resources, funds should be allocated last. The corporation should firstly allocate management talent, based on the available mono (things): plant, machinery, technology, process know-how and functional strength. Once these hito (people) have developed creative and imaginative ideas to capture the business’s upward potential, the kane (money) should be given to the specific ideas and programs generated by the individual managers.
In synopsis planning is indispensible when considering entrepreneurial ventures and in reviewing existing core services, a thorough business plan and contingency plans need to be in place for all eventualities. I leave you with the words of General Eisenhower and a some further insight I gleaned from a TED talk by Ernesto Sirolli:-
“In preparing for battle I have always found that plans are useless, but planning is indispensible”
– General Dwight D. Eisenhower
“There is only one thing that all the most successful companies in the world have in common: None of them was started by one person” – Ernesto Sirolli