Search

Your Startup Guru

Helping you launch and grow your business

Tag

competitive advantage

Product/Service life cycle

I was asked by a student for help on their franchise business plan assignment.  One of the elements of the assignment was determining where on the product/service life cycle curve the franchise sits.  It is always helpful in any Industry and Market Analysis to get a macro view of where the product/service is in its life cycle.  What is the product/service life cycle?  Glad you asked!

It is the birth, growth, progression and ultimate passing of any product/service.  For example a CD came into the market around the early 90s.  This is the birth/introduction stage.  It gained popularity and was one of the most preferred method of data transfer until recently.  So for the next 10 years it was in the growth and in the early 2010s entered the maturity phase.  Now in the second half of the 2010s it is in the decline phase.  Last week I purchased a new laptop and installed Microsoft Office via online.  No more CDs.

Of course, not all products/services will die out.  They may die out eventually, but will make one or two more resurgences.  Take for example, baking soda (sodium bicarbonate).  The earliest use of naturally forming sodium bicarbonate was used by ancient Egyptians as a component of the paints they used in hieroglyphics.  Sodium bicarbonate was also used in the 1800s in commercial fishing to prevent freshly caught fish from spoiling.  Baking soda continues its long life cycle in many many uses including cleaning, cooking, neutralization of acids and bases, not to mention the elementary school volcano science experiment, and more.

revenue_time_curve

Maybe there’ll be a new use for CDs that will revive the CD but without major modification (which will essentially change the actual product and will actually create a new/different product) it will be unlikely.  Wherever your product/service is in its life cycle, with enough investigation, a new spin could be created to find a niche demand (market segment).

Competitive advantage and coffee

screenshot2013-03-14at5-03-11pm

When you are asked what is your “competitive advantage” what do you think?  Processes?  Patents/Intellectual property?  Cutting-edge algorithms and data-analytics?

Those are all valid ways to have a leg-up on your competition.  However, not all competitive advantages are high-tech and modern.  Some are old-school.  Tried-and-true methods for (in this case) building customer loyalty/satisfaction/based and making the sale.  There are many areas in which a company can improve effectiveness, but that is for another post.

One of 7-Eleven’s competitive advantages allows one location to sell over 2,500 cups of coffee a day.  2,500 cups. A. Day.  This location sells the most coffee out of any other 7-Eleven location in the world.  Think of every single 7-Eleven you’ve ever driven by in your life.  This 7-Eleven sells more coffee than that one.

How?

Store manager Delores Bisagni.  Delores, who is on kidney dialysis, has been working at her location in Shirley, NY 7-Eleven for 18 years.  Delores’s secret is knowing virtually every single customer’s name.  That’s it.  You go there, she greets you (by name if you’re a regular) sometimes with a hug, you get your coffee and get on your way.  If you’re new, she greets you asks your name.  Overtime, she’ll remember you, make you feel welcome for coming to her store, and causes you to come back.  That is it!!!  That is how she sells 2,500 cups of coffee a day!  No traffic flow algorithm, CRM software, etc.

Delores might have profound name memorization skills and whatnot.  However, I believe it’s more that she cares about her customers.  “Care for our customers” is a slogan most businesses don’t understand and/or believe in.  However, if you can truly understand and apply that concept, I think it will help you.  Maybe not make you the #1 seller in your field, but will help you nonetheless. That is why I offer my services at a deep discount, give free editing for the life of your business, often give free advice, will work with clients that can’t pay right away, and follow-up on how your start-up is doing.  So far it’s been working very well!

Powered by WordPress.com.

Up ↑