In late 2015, DuPont and Dow announced plans to merge for better short-term earnings through layoffs. The CEOs will maximize their stock-option income rather than trying to win via traditional innovation. Consolidating mature industry capacity continues!
Since 2009, US firms have increased stock buybacks by 194%. In 2015 alone, American companies spent over $2 trillion on acquisitions.
Then, there is Amazon: just 22 years old and eating many with constant innovation. Jeff Bezos, the founder and CEO, is one of the most effective businessmen of all times. He’s also quite quotable. Google: Bezos + 20 smart things. Contrast Jeff’s competitive beliefs with yours for some competitive insights.
Jeff’s Strategic Guidelines
For a jump-start, here is my distillation of Jeff’s quotes that relate to “strategy”:
- “We have had three big ideas since the beginning: Put the customer first. Invent. And, be patient.
- We innovate by starting with the customer and working backwards.
- Most competitors think about how to get ahead of one another. We’re thinking about how we are going to invent something for the customer.
- If you only do things for which you know the answer in advance (best practice recipes), your company goes away.
- Ten years from now, we know that customers will want: lower prices, fastest delivery and total selection.
- Some companies work to try to charge more and others work to charge less (with more selection and faster delivery). We choose to be the latter.
- Your margin is my opportunity.
- All businesses need to be young forever. If your (reps and) customers age, you’re Woolworth’s.”
Common Distributor Responses I Can Imagine:
- Some of these customer-first ideas won’t be liked by my: reps/employees/suppliers/family shareholders. (Then, you aren’t customer centric!)
- We don’t innovate. Pioneers get arrows in their backs. We like to think we are “fast followers”.
- We have “good” service (which is not focused on or defined by any specific customer niche).
- We strive to sneak up margins while offering the same service.
- Our sales force is aging. Our entire channel is suffering from too few young people.
“Service-Value Innovation Guidelines” (For Distributors)
Do you need some quick, low-risk, high-impact ideas to start innovating? Check out my 19-slide presentation on this challenge. Would you like to be notified about the forthcoming, on-line, video-clip series for each slide? If so, email me directly at Bruce@Merrifield.com.