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It Pays to Cooperate with Your Competitors

By Bigg Success Staff
06-26-08

Bigg Success in Business

cooperation 

Business owners are often a very competitive group. They want to stamp out their competition so they can gain market share. They’re always looking for a competitive advantage.

But sometimes you can make more money by working together.

Here’s an example
There are two established car dealers in a small community about thirty minutes away from a large city. Obviously they compete for the business of the people in their immediate community.

But at some point, they both approach the maximum amount of business that they can get from these people. Can they continue to grow?

Yes!

What if they promoted both of their dealerships together to people in the city? Talk about how they’re committed to saving people money to make it worth the drive.

It’s likely that neither one could afford to advertise in the larger market by themselves. But by working together, they can bring a whole new market into their stores.

It seems that you hear about “coopetition” with internet competitors. But it works offline as well.

Has it worked for you?

Hear today's lesson and laugh on The Bigg Success Show. 

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The Iron Man Dad

By Bigg Success Staff
06-10-08

Success Stories

hoyt_logo 

Dick Hoyt’s son, Rick, was born with cerebral palsy. Due to some complications at birth, the doctors told Dick that Rick would never talk or walk. That day, Dick found his passion – to make life for Rick as normal as possible.

Time passed and Rick graduated from high school. He went on college and earned a degree in special education. While there, he helped his school, Boston College, develop a computer system that enables people like him to communicate.

Here’s where the story gets even more interesting …
Rick heard about a fundraiser – a five-mile run to benefit a young man who was paralyzed. Rick told his dad that they had to help. So Dick pushed Rick in a two-wheel running chair.

That wasn’t enough for this dynamic duo!

They moved on to marathons – that’s over 26 miles! Then triathlons. Finally, they signed on for the Iron Man competition.

And Team Hoyt is a tough competitor!

Dick attaches a tow line around his waist and pulls Rick for the 2.4-mile swim. Then, using a specially built bike, Rick sits in a seat in front of Dick for the 112-mile ride. Finally, Dick pushes a three-wheel chair for the marathon portion of each event.

Now, nearly 1,000 races later, would you say Rick has a normal life? It’s extraordinary. Dick Hoyt set out to create a normal life for his son. He accomplished that, and inspired an entire world!

Hear today's lesson and laugh on The Bigg Success Show. 

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(Image from teamhoyt)

fighter jets for the blog post about the OODA Loop concept

Get in the Loop to Gain a Competitive Advantage

fighter jets for the blog post about the OODA Loop concept

A military strategy that can help you get in the loop and give your business a competitive advantage.

We discuss how the OODA Loop on The BIGG Success Show. Here’s a summary…

Planning is certainly important to set your direction. Analysis is necessary, but a lot of people take it too far. At some point, you just have to do it.

United States Air Force Colonel John Boyd developed a concept for the military called OODA Loops. OODA is an acronym for Observe, Orient, Decide, Act.

It’s a useful concept in business as well. Boyd postulated that you gain an advantage if you work through this loop faster than others. This is particularly true in today’s highly competitive, rapidly changing business world.

Start by getting in the loop

Read more

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Are You Good, Fast, or Cheap?

There’s an old saying …

You can be good, fast, or cheap. Pick any two.

So you can be good and fast. You can be good and cheap. Or you can be fast and cheap.

So why can’t you be all three?

 

Because you can’t deliver all three. More specifically, you can’t defend all three. It costs money to be good; it costs money to be fast.

If you’re trying to compete on all three, a competitor can come along who only competes on two. Let’s say they’re good and cheap. Their cheap is cheaper than your cheap because they’re not trying to be fast. So now you’re only competitive on two of the factors – good and fast.

“Good, fast, and cheap” is really just a way of discussing the three components of value:

  • Quality
  • Service
  • Price

6 strategies to beat your competition

Defensive strategies 

#1 – Improve quality, keep price constant
If quality increases but price doesn’t, you increase the value your customers receive. You focus on trying to make your “good” better so you gain business.

#2 – Improve service, hold price constant
If you improve your level of service, while keeping your price the same, your customers will perceive it as a better deal. You focus on making “fast” even faster. This actually applies to anything having to do with customer service, not just speed. 

#3 – Decrease price, keep quality constant

If you can decrease your price without sacrificing quality, you’ll increase the value to your customers. We all love a good deal, right?

#4 – Decrease price, maintain service levels
If price falls without sacrificing service, your customers will realize they’re getting a better deal. More people will buy more!

So here’s the caveat to these four strategies – you have to make a profit to stay in business. These defensive strategies give you a competitive edge, but they all cut into your profit margin.

So what you’re trying to do with these strategies is increase profit by increasing sales enough to compensate for the lower margin. It’s risky! Because if you don’t get it right, you’ll work harder (because you’re selling more) for less money (profit).

Compounding strategies

#5 – Improve quality, increase price
If you can improve your quality, but increase your price, you’ll hold value constant. Your customers are still happy, because they’re getting the same value as before. They’re paying more now, but they’re getting a better product.

#6 – Improve service, increase price
This is the same as #5, only here you’re delivering a higher level of service.

These final two are designed to increase your sales and at least maintain your profit margin. Therefore, your profit should go up. Of course, we’re assuming that you’re able to maintain your customer base, even at the higher price. 

As you consider these strategies, think across your whole business. You may find it valuable to use different strategies for different products or services.

Our bigg quote today is by Michael LeBouf:

“A satisfied customer is the best business strategy of all.”

Create value for your business by delivering what your customers value.

Next time, we’ll answer a question from a member of our community about getting started on a project. Until then, here’s to your bigg success!

 

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