3 min read
Where's the Power in Your Buying Model?
By: Kristin McLane on March 26, 2020 at 10:00 AM
We’ve been talking about business strategy this week. While everyone else is dealing with crisis, some of us need to be dealing with strategy. We need to “rise from the ashes” when all is said and done, stronger and faster than before. Where there is crisis, there is opportunity.
Clarity of Vision. Have a strong vision for what you want or need to do and stay the course.
Certainty of Intent. Push forward in a meaningful direction on that vision every day. Make it your priority.
Live by Your Values. Know what your core values are and work towards and within them every day.
For Warren, this time is no different than any other time on these three critical points. He lives them every day, in good times and in bad, in growing and shrinking economies. These are the foundation that make everything possible in terms of growth, both for you and for your company.
How do you get that clear vision for what’s next? It’s not an easy question and perhaps what resonated with me the most yesterday was how these two models intersect. The industry model that we’ve been talking about links well with the idea of Clarity of Vision. In order to carve a distinct space for you to live in, where no one else does, you need that vision clearly defined.
We’ve already talked about how difficult it is to break into the business that you’re in. We do that to determine how many competitors are out there – currently and into the future. If there are too many or they are too strong, it may not be the right space for you to live in. Determining the strength of a competitor is not made by guessing. This is a data-driven conversation. Really determine how strong they are.
When a person or a company buys a product or service like the one you sell, how much power does the buyer have over the transaction? Think about how much pressure they can apply on your pricing model. This can be driven by either too much or too little competition. When there’s too much competition, it is almost obvious that the industry can become very commoditized. What about when there’s too little?
Here, the answer is not as obvious. It could be that there is little competition because you’ve created just the right space for your products and services. However, don’t ignore the opposite side of that coin. If you are not constantly growing, is it a sign that there just is not much demand for what you sell? This moves the advantage from you, being in an industry segment that is not crowded and sitting in a seat of bargaining power, to a completely different arena, driven by lackluster need for what you provide and putting the purchaser directly in the driver’s seat. Collect some real data and find out where it is for you and your company’s products and services.
Next time, we’ll talk about transactional strength and substitution. It’s another way that the opportunity for your products and services could either grow or shrink rapidly based on some key choices that you make.
In 2020, we are rolling out meaningful tools for manufacturers that are affordable, on-target and competitive. We are also expanding our educational offerings.
We believe in the critical importance of manufacturing right here in North America and we work hard to keep you working. Ask us questions; you will find that we are far more reachable than other software providers you may partner with. We are here to help you find the right tools and use them, whether it's a Google doc, an Excel sheet or a Production Control system. To learn more about meeting your targets for 2020 or just getting a question answered, visit us at www.cimx.com.