During a kick off meeting with a new client we were discussing how best to accelerate beyond his local trading area. We talked about geography, product lines and market segments. When I suggested he focus on a very specific offering for a unique demographic his comment was – “Geez – that market is way too small”. He was confusing small for narrow; let me explain ...
This particular client manufactures custom home furnishings and, whether he likes it or not, is competing with just about everybody in the world. Ikea dominates the category; and Costco, Wal-Mart and a host of other players are all active in his segment too. So if he remains un-focussed, eventually, someone will eat his lunch.
No mater what business you are in, there are hundred’s of companies around the world doing the same thing. It’s only a matter of time before someone else like Ingvar Kamprad expands beyond Scandinavia and opens an Ikea your backyard. Most businesses start locally and continue to think locally. And, because they only sell locally, they need to provide a wide range of products or services to remain profitable. However, in a hyper-connected world, this is neither defendable or sustainable.
As business leaders we need to constantly adjust our focus. As we tighten our focus we can increase our reach to compete on a global stage. (Remember those “Mini-Maglites” that were so popular a while back where you could go from wide beam to narrow beam – just like that?) Our most successful clients have doubled down, and focused in, on a subsection of their original markets and are now growing like crazy.
So, at what can you be the world’s best? We're not talking the best for everyone, but best for that perfect market segment which youknow how best to serve with products and services designed uniquely for them.
How do you determine where and how to play? It is an iterative process based on market insights, competitive offerings, competitive abilities, your strengths, weaknesses and aspirations. But once you’ve nailed it – you can take on the world! It also usually involves a lot of this.
So, as I said to our furniture client - we are not looking for small markets, no – we are looking for a narrow global market that we can penetrate deeply; that is sustainable, defendable and, above all, profitable.
Take a look at your current product/service offerings and determine which one, with the right effort and support, has the potential to go global. And by global, I mean a narrow slice of the world market - a niche or segment that you alone are best able to address with your ‘ best in the world' offering.
Send me an email and let me know what you plan to sell and the global niche to which you plan to sell it.
Don’t think small Think narrow !