On Strategy: Properly Focused
By Jack Mixner 714 449 1040 www.mixnerstrategy.com
"Sacrifice is the essence of corporate strategy," says Al Ries in Focus (Ries, page 130.) In order to dominate a marketplace, a company has to focus its offerings on a tiny sub-set of the market in order to dominate.
Early on, IBM, by focusing on the broad term computers, lost share to other manufacturers who focused on slices of the market. Make an enemy by being against another company, not with one.
Enterprise is the largest car rental agency, bar none. Why? It focuses on locations downtown or in the neighborhood, not near the airport.
Jiffy Lube took the auto repair business and focused on one sliver of the market, folks who wanted their oil changed in minutes with no waiting.
Focus. Dominate.
Strategic Implications
What does this say about diversification? The holding company of a diversified company does one thing well, set goals that divisions and individual companies meet. Staff in a proper holding company is small. Its slice of the market is holding companies. So diversification could be a focus strategy.
Look at your mission statement. Focus on the most profitable areas - and the areas with the potential growth.
And complementary products, where do they fit into the equation? They amplify your focus. Micheln focused eventually on tires from the broader mission of being a rubber manufacturer because of the success of the Micheln Guide. The Guide was complementary to the central products, tires.
References
Ries, Al. Focus The Future of Your Company Depends On It. Harper Business. 1996.