Peter Drucker said "the purpose of any organization is to create a customer." In essence, what Mr. Drucker is saying is that all companies should consider the needs of their customers when crafting their product or service.
Small business owners need to step back and think about what business they are REALLY in. • Do you sell houses, or do you sell a safe community where kids are free to play outside? • Do you sell ice cream, or do you sell happy taste buds all year round? • Do you sell orthodontics, or do you sell self confidence with a new smile? When small businesses focus more on their products or services, rather than the customer's needs, they are entering into "market myopia" and missing out on a tremendous amount of opportunity. At Scopo, our focus is on Mercer County, NJ small businesses and the local communities they serve. We don't sell "strategy," rather we sell "helping small businesses achieve success!" When a local small business goes out of business, we are truly heartbroken and wish that the owners had contacted us before deciding to close their doors. Because when small businesses fail, everyone in our local communities fail. • No more safe neighborhoods where our kids are free to play outside. • No more happy taste buds all year round. • No more self confidence with new smiles. So we ask ALL small business owners to take the time to step back for a moment and think about what type of business they are REALLY in. If you always keep the customer's needs at the heart of your thought process, your small business will shine brighter and longer than ever before! Regardless of which type of strategy a small business pursues, it is essential to know what customers value - both its own and its competitors customers. A "customer value analysis" determines what the underlying NEEDS of the customer are, on two levels:
1) Distribution channel - when there is an intermediary channel between the small business and the end user (ex: business-to-business), and 2) End user - when there is no intermediary channel between the small business and the end user (ex: business-to-consumer) These two types of customers have different benefits and costs so it is important to know the underlying NEEDS of both to determine the customer value analysis equation, which will eventually unfold into what type a strategy a small business will pursue. What is strategy? How does strategy work?
These are the two questions we get asked the most at Scopo. Here are the answers. Strategy is "aligning" decisions to uniquely "position" your company/division/product/service to create a "sustainable advantage" and "maximum value" as compared to the competition. OK, so what the heck does this mean?!?!? Let's simplify. Developing a strategy requires you to have a goal in mind and make the best decisions to achieve the goal. Let's say your goal is to be the regional leader as a low-cost package delivery service. OK, how do you do this? There are many questions you must answer such as what resources and capabilities are needed, how best to market your service, and what type of management systems and structures are required to achieve your goal? A strategy will NOT ONLY identify what resources and capabilities are needed such as cash and skilled labor, NOT ONLY identify how best to market your service such as with a strong advertising campaign, and NOT ONLY identify what type of management systems and structures are needed such as IT software programs and a knowledgeable sales force....... But a strategy will allow you to decide the BEST way to utilize your cash and skilled labor, allow you to decide the BEST way to advertise your service, and allow you to decide the BEST type of IT software and salesperson training programs are needed. Here's the kicker... • A strategy will "align" all of your decisions toward the goal in mind. This saves you a tremendous amount of time, energy and money! • A strategy uniquely "positions" your service - meaning you will know exactly which customers you will pursue, and your customers will know what real value you will provide them • And a strategy will create a "sustainable advantage" because you will know how to stay two steps ahead of your competition, and create "maximum value" for your company as compared to the competition because you will know exactly how to reallocate all of that saved time, energy and money into your service so that your company can grow to its maximum potential over and over and over again. This is what is meant by TAKING OFF! And in the end, this is exactly what Scopo wants to do for your small business - TAKE OFF! When small businesses TAKE OFF our entire community TAKES OFF with new jobs and cash that gets reinvested back into the community over and over and over again! Every company/division/product/service are unique in their own special way with their own unique resources and capabilities. So a strategy will be unique too so that it identifies how best to "align" and "position" these resources and capabilities to create a "sustainable advantage" and "maximum value." A winning strategy determines the goals and objectives of a small business, and creates a plan to turn inputs into outputs - or, turn resources into something customers are willing to purchase. At Scopo, we understand what it takes to create maximum value for our local small businesses.
There is a common denominator when it comes to "why" a small business operates: the desire, and the need, to create value. Value is the monetary worth of a product or asset. Therefore, we say the "purpose" of a small business is to first, create value for its customers and, second, to appropriate some of that customer value in the form of profit, thereby creating value for the firm.
Value can be created in two ways: by production and by commerce. Production creates value by physically transforming products that are less valued by consumers into products that are more valued by consumers. Commerce creates value not by physically transforming products, but by repositioning products through arbitrage across time and space. Consumers demand for value is calculated by price elasticity, which in part is representative through their responsiveness to changes in price or incomes. Small businesses can attract more customers if the value added to customer demand is greater than the purchase price paid by the consumer. But how do small businesses know what price can be charged to create maximum value for the firm? At Scopo, we work with small business owners to help them achieve their goals and add value to their organization. We have the expertise and capabilities to develop winning strategies for our clients that can't be matched! Contact Scopo today to discuss your ideas and learn why "Your Scopo is Our Scopo!" Maya Angelou was quoted as saying "You may not control all the events that happen to you, but you can decide not to be reduced by them."
At Scopo, we promote better decision making through comprehensive data analysis tools. In doing so, our clients are in a better strategic position that enables them to overcome unforeseen events that may otherwise deter them from accomplishing their goals. At Scopo, we help small businesses make better decisions and get on a direct path to achieve their goals. Here is one example how:
• Use data analytic tools to define target market • Once target market is identified, align resources and capabilities to attract and capture target market • Do not waste resources and capabilities on activities not aligned with attracting and capturing target market • Set out on a clear path to achieve these goals Sounds simple, and it is. But only after going through a strategic analysis with Scopo. We create focused, structured, and innovative strategic plans for Mercer County, NJ small businesses! The types of better decision making to achieve your goals quicker and more efficiently include: • Financial and investment decisions • Marketing decisions • Legal decisions • Inventory decisions • Staffing level decisions • Employee training decisions • Social responsibility decisions • Philanthropic and charity decisions • And much, much more! Focused, structured, and innovative! Contact Scopo today to discuss your ideas and find out why "Your Scopo is Our Scopo!" At Scopo, we believe the key to a successful small business is to align its "capabilities" with "customers' needs" in such a way that competitor offerings can't. Certain factors "enable or prevent" small businesses from success such as technology, demographics, regulation, a skilled labor market, and so on.
At Scopo, we help small businesses to find that strategic "sweet spot." Contact Scopo today to discuss how strategic planning can achieve valuable results for you small business and learn why "Your Scopo is Our Scopo!" 50 billion devices will be connected to the internet by 2020, communicating with each other and changing the way we do business. Do you have a Scopo Strategy to take advantage of this disruptive innovation? Contact us to find out how we can align your small business's resources and capabilities with IoT technologies to grow and add value to your company.
Scopo conducts research on economic factors and consumer trends that affect Mercer County, NJ, and has developed sophisticated algorithms to analyze the impacts which these conditions are having on local small businesses.
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AuthorJoe Immordino, MBA Archives
April 2017
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