As a business owner, anytime you are faced with an unexpected failure or begin to see unexpected events, call for more study and analysis to ascertain whether there is an opportunity for your company to thrive that is lurking around.
MacDonald was established because one of the founders, Ray Kroc, paid attention to the unexpected success of one of his customers.
At that time, Kroc was selling milkshake machines to hamburger joints. He noticed that one of his customers, a small hamburger stand in a remote California town, bought several times the number of milkshake machines its location and size could justify.
He investigated and found an old man who had in effect, reinvented that fast-food business by systematizing it. Kroc bought his outfit and built it into a billion-dollar business based on the original owner’s unexpected success.
Your customers can actually become your source for new business opportunities in your industry. That is why you should have solid relationship with your customers. If your customers see you as their friend, they can easily walk up to you and show you an opportunity you may not have paid attention to.
Peter Drucker shared this wonderful story. “I had my first experience with an unexpected failure at the very beginning of my working life. My first job was a trainee in an old export firm, which for more than a century had been selling hardware to British India.
Its best seller for years had been a cheap padlock, of which it exported whole ship loads every month. The padlock was flimsy; a pin easily opened the lock.
As incomes in India went up during the 1920s, padlock sales, instead of going up, began to decline quite sharply. My employer thereupon did the obvious: he redesigned the padlock to give it a sturdier lock, that is, to make it better quality.
The added cost was minimal and the improvement in quality substantial. But the improved padlock turned out to be unsalable. Four years later, the firm went into liquidation, the decline of its Indian padlock business a major factor in its demise.
A very small competitor of this firm in the Indian export business- no more than a tenth of the size of my employer and until then barely able to survive, realized that this unexpected failure was a symptom of basic change.
For the bulk of Indians, the peasants in the villages, the padlock was a magical symbol; no thief would have dared open a padlock. The key was never used, and usually disappeared. To get a padlock that could not easily be opened without a key- the improved padlock my employer had worked so hard to perfect without additional cost was thus not a boom but a
A rapidly growing middle-class minority in the cities, however, needed a real lock. That it was not sturdy enough for their needs was the main reason why the old lock had begun to lose sales and market. But for them the redesigned product was still inadequate.
My employer’s competitor broke down the padlock in two separate products: one without lock and key, with only a simple trigger release, and selling for one-third less than the old padlock but with twice its profit margin; and the other with a good sturdy lock and three keys, selling at twice the price of the old product and also with a substantially larger profit margin.
Both lines immediately began to sell. Within two years, the competitor had become the largest European hardware exporter to India.”
This story shows that when an unexpected failure is staring you in the face, don’t panic. Rather, try to find out the opportunity that it presents. That was exactly what that second company did.
To grow your business you must take research and development serious. Your ability to find out what is about to happen in your industry before your competitors will give an edge over them.
It may cost some money to get a consulting firm like ours (King’s Uncommon Wisdom Limited) to help you to conduct a thorough research to ascertain where your industry is headed, but you will definitely make the money many folds later.
If you want to find out why sales is down, why your competitors are having an edge over you and what to do about it, the direction your industry is heading and how to prepare for it, kindly call us on 07032681154. Please, it is strictly for those who are ready to pay for the services.
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