Today, we’d like to share the story of one small business owner. He served an underserved market.
None of his large competitors wanted any part of this market. Actually, they were happy to serve the customers that made up that market but they really didn’t make it easy for them.
A supply problem for his customers
It was difficult for these customers to purchase the products offered by this business owner’s large competitors. It took a lot of time. It cost them more money than it should have.
But the large competitors didn’t care. They had plenty of other customers.
So the small business owner thrived. He was able to serve more and more customers. He grew rapidly year after year.
A supply problem for him
He had a problem, though. The suppliers that served his industry didn’t make it easy for him to buy from them. They made it much simpler for his large competitors.
The main reason was that the infrastructure of these suppliers wasn’t set up to accommodate companies like his. He could only think of one solution – he would build his own infrastructure.
So he did. And something amazing happened. This infrastructure became the source of his competitive advantage.
From problems to profits
Over time, this small business owner became a billionaire. He was even the world’s richest person at one point. His business became the world’s largest retailer. Yes, this is the true story of Sam Walton and Wal-Mart.
Wal-Mart is the source of much ill will from a number of people. However, we believe Sam Walton’s story is one of the great success stories of all time.
Here are two BIGG challenges that he overcame:
Challenge #1 was his customer’s challenge.
They had to spend precious time and money driving to major metropolitan areas to buy basic goods. It was worth it because the stores in the large cities had a bigger selection and better prices. But it was still a pain.
Sam Walton put stores in the small towns where these people lived. He brought them great selection and low prices.
The first challenge for every entrepreneur to solve is your customer’s. Find a way to serve the underserved and you’ll reach BIGG success.
Challenge #2 was a structural challenge.
The distribution network in his industry was equipped to serve the stores in the large cities. Sam Walton’s stores didn’t fit the model.
He overcame that challenge by building his own distribution system. To run it efficiently, he relied on technology more than their competitors.
Just another example of a company, that isn’t a technology company, but still makes a lot of money, thanks to technology!
In this process, power shifted away from manufacturers to retailers who were closer to the customer. Today’s challenge may be tomorrow’s competitive advantage. It may lead you to BIGG success!
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(Image in today's post by babette1)