Leave out the frills, please!

Here is a key message for today. When you seek to offer a product or service, don’t seek to offer what your competition does. Copying them does not make you a leader. It only increases your costs. Let me provide you with an example that everyone can relate to. My father in law decided to buy a high chair for this grandchildren for when they visit. He went to all the big box stores, and found deluxe high chairs that all had similar finishes and features. But he did not want all those features. He wanted a basic high chair to help feed his grandchildren. So, he went searching for a low cost solution. He ended up buying a basic, plastic high chair that was half the price of other chairs. It suited his needs well. He purchased the high chair and has never looked back.

So what is the point of this? Businesses often over engineer their products when the customer does not want, and does not need the additional features. Offer what the customer needs, without the frills and you will attract a market.

Innovation in six easy steps

Did you know Canadians Invented canola oil? How about alkaline batteries? Snow mobiles? The telephone? Canada needs to innovate more but we need to understand what innovation is and how we as Canadians in small businesses create innovation ourselves in local markets.

Here’s an except about the invention of Canola oil. The reference refers to simple beginnings to overcoming challenges. No one said innovation was easy!

“From simple beginnings in the 1940s, Canada’s canola industry has faced and overcome many challenges. Alternative markets were developed, nutritional studies were implemented, and extensive plant breeding to modify the nutritional make-up of rapeseed was undertaken”.

Let’s now fast forward in time to see how demand for Canola oil has grown:

“1979: Over 3.4 million hectares (8.4 million acres) were seeded to canola. During the 1978-79 crop year, Japanese imports of canola seed exceeded one million tonnes for the first time”.

What an amazing story considering Canola’s humble beginnings! If you are interested in reading more, I will provide you with a link at the bottom of my post.

Innovation is becoming a key tool and strategic driver for organizations to succeed. Innovation, I think in the business world is an overused word. The word Innovation sounds exciting. However, what does innovation mean to your organization? Does innovation mean different things to people within your business? Your department? Innovation drives operational effectiveness once the item you are innovating is implemented.

Here’s a quick look at what trends are emerging in the area of innovation:

1. Creating consensus on what Innovation means to your organization. This means getting together a cross functional team to help define what innovation is. Agreeing through consensus is the first step. The second is to execute innovation strategies to enable your organization to be successful.

2. Planning. You have consensus. Now you need a plan to deliver. You also need all staff know in the organization so they can support the execution. This helps create the right culture. To get the creation of innovation, you need staff buy in at all levels.

3. Grow your innovation culture. You need to also frame your innovation culture around your customer’s needs and areas where you see you can fulfill their need.

4. Make strategic investments over the long term. Cost cutting is short term to meet short term targets. Longer term goals need time allocated to discuss and track. Growth occurs when you stick to your long term plans.

5. Process, Process, Process. There are processes and procedures in every other area of your business. Why can’t you also create processes that will move innovation forward? Innovation does not just happen. You need to make it happen.

6. Include everyone. Innovation does not happen in the C-suite. It happens with the everyday person. if you are the sole proprietor in your small business, network with similar businesses or at your local chamber of commerce to help facilitate your ideas amongst your peers. Your never alone!

If you have succeeded in an innovation, don’t forget to patent it!

www.canolainfo.org/canola/index.php?page=5

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Differentiation AND Low Cost Leadership

So I am at the kitchen counter this morning. Pondering what I should share with you this morning before I start my day. Here’s another strategic tidbit that you may find useful.

Thought I would bring up an interesting strategy that seems to be prevailing these days. In numerous strategy texts I have read over the years, if the differentiation strategy was chosen, it meant that you were aiming for a high end product with high fixed and variable costs.

Now, it seems I’ve discovered new material that seems to combine low cost leadership combined with a low cost strategy. The key in using this strategic approach to create value for your customers, drive down your costs, and create economies of scale. I will write more about what companies are performing this approach successfully in the next coming days.

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Bradford Cares surpasses the 10,000 view mark!

Bradford Cares surpasses the 10,000 view mark!

Thank you all for making this blog one of the most read blogs in the local area!!

It wasn’t too long ago to be honest, where I almost decided to delete this blog and tell no one about it. I’ve had a busy year – starting a new position, and the addition of my daughter into the mix has taken away the vast majority of the time. I have not posted in months, yet you the loyal readers just kept on visiting. And for visiting time and time again, thank you!

With that said, there will be some changes here. I’m still pondering my next moves, but it will be very likely that I will be renaming the blog to focus more on the target market I wish to obtain. The target market is the small to medium business owner on local and on a Provincial, National, and perhaps on an international level as well. This doesn’t mean I will be abandoning my local focus, it just means that I seek to cater to more of my readership that is beyond Bradford’s borders. Bradford has seen a lot of my comments over the past couple of years, but now it’s time to open this blog to the world. More details will be coming in the days ahead.

Once again, thank you all for being loyal readers ! I hope that I can continue to engage you in the months ahead!

If you have any comments or suggestions, please comment!

Thanks again everyone!

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Black Friday deals

I was walking down the aisles of a large discount retailer here in my local town yesterday. I was watching for Black Friday deals that I could potentially purchase for my family. To my amazement, there were no real deals to be had. Yet, I heard on 680 News that over 7 million Canadians participated in purchases south of the border.

There’s an opportunity to keep Canadian dollars where they belong. Here. Locally. Your challenge as small businesses is figuring out how to compete.

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Imitation is flattering but not easy to accomplish

To add to my discussions with you about creating your own path, and doing that means you don’t copy what your competitors are doing by playing what I call a zero sum game.

Once you create a winning formula, because you have your own strategy, you are putting in place a barrier to imitation. Porter describes this as the following:

“barriers to imitation: The hurdles facing a rival within an industry who tries to move from one positioning to another in order to copy another company’s strategy. Barriers to imitation slow the process of competitive convergence.”

Competitors will find it difficult to copy your strategy because it will often have economic consequences for them. Offering extra services for example, you need resources and skills. This takes time to build. And money. And it could also conflict with the competitors own strategy.

Excerpt From: Joan, Magretta. “Understanding Michael Porter.” Perseus Books Group, 2011-11-21T14:00:00+00:00.

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Confusing OE with Strategy

To continue the discussion about Porter’s strategy as it relates to business, I thought I would provide a quotation directly from him to illustrate that beating your competition by setting to acquire the same customer base is in fact a zero sum game. Here is Porter’s quote:

“The granddaddy of all mistakes is competing to be the best, going down the same path as everybody else and thinking that somehow you can achieve better results. This is a hard race to win. So many managers confuse operational effectiveness with strategy.”

Porter then continues later to day that strategy can be affected by pressure by managers to create shareholder value, to obtain and create shareholder value in the short term. Here is more of what Porter had to say:

“The whole emphasis on shareholder value over the past couple of decades has focused managers on the wrong thing when they should really be focusing on creating economic value sustainably over the long term. The capital markets are better at driving OE, better at keeping pressure on companies to improve efficiency and profitability and to use capital better—these are positive influences. But I have no doubt that the markets damage strategy, even if the impact is subtle and mostly unrecognized.”

What I learned about Porter’s response here is that mangers often confuse operational effectiveness with strategy. They are definitely not the same thing. Business schools teach us that the basic principals of starting a business is to state what your mission, vision and values are. Why then are capital markets placing undue pressure to undermine the business?

Since this blog is based in a small town and we offer advice to small businesses, there are pressures as well to be efficient. Small businesses are equally concerned about getting a return on their invested capital, and profits from operating the business. Many small businesses generate incomes for individuals to provide for their families. This to me is the same pressure that is being applied by the capital markets to generate shareholder value.

Any thoughts?

Excerpt From: Joan, Magretta. “Understanding Michael Porter.” Perseus Books Group, 2011-11-21T14:00:00+00:00. iBooks.

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Don’t play a zero sum game

Today’s tip is to offer some advice from world renounced strategist Michael Porter. If you think what i am about to write is complicated , it isn’t. I’m going to make it really simple so that everyone can understand, even for those who know nothing about business. Porter states that in order to be a winner, you must focus on profits, and not getting the most customers. Another way to say it is by not about getting more customers, it’s about more money you keep as a profit. So small businesses.. You may be asking.. How do I do this? You do it by creating your own value to your customers. In other words, create your business that improves upon itself every day. And not to focus on beating your competition by copying them or getting into a price war. No one wins this way..it’s a zero sum game!! Business owners and consumers alike.. Please feel free to share your thoughts! Sent from my iPad
Sent from my iPad

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Advice to use to help your small business

Since this is that has many readers who offer business services and products, I would like to share some insight on how a world renounced strategist sees competition. The purpose of me sharing this is so you can apply to your businesses. Michael Porter explains the concept of a perfect competition and those who want to be unique. Those who offer perfect competition means that companies compete against one another based on serving the same need. This often leads to competition based on similar products and features, and then competing against price. What Porter suggests, is for your company to be unique, and to focus in achieving higher profit, and not market share or the highest amount of customers. The goal is just to to be just big enough in order to capture on economies of scale. I’m offering this knowledge for your use to apply to your own businesses. As a business owner,can you think of ways to make yourselves unique and innovative? . Sent from my iPad

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Local Transit starts next week

I just wanted to wish everyone a fantastic weekend! I noticed a post on a local Facebook group about Bradford transit commencing next week. The question I am wondering is how many users will actually ride the system within the next month?

Perhaps there will be some users who will take a ride on the system route just for a thrill. There will be core users as well, who will utilize the system for there needs.
Only time will tell if transit locally will be used. I hope it will.