A visit to the business zoo

The commercial zoo of business executives has its share of complacent hippos content to bask lethargically in the sunshine of past successes rather than waste energy on new ventures.

While they lay there, herds of dynamic, growing businesses are passing them by. Soon they'll be alone in the desert, wondering what went wrong.

The business zoo used to be more forgiving. Product life cycles used to be measured in decades; today they are measured in months. Why? Because markets and consumer needs are changing at light speeds. If your business beasts don't anticipate these changes, your company brood may be in danger of extinction.

A small company can react rapidly. Although speed is a great asset, so is mobility, the ability to change directions fast. Small companies can react like gazelles and run rings around the plodding elephants.

Because all products (and services) have life cycles, you should ascertain where yours are and what changes you should make.

Suppose your company manufactured audio tape players and enjoyed a leadership position in the market; then along came compact disks (CDs), and you saw your competitors becoming extinct as the market for audio tapes shrank. What would YOU do?

Unless you want to stick your head in the sand and ignore reality, you've got several options:

* Become a leader in a smaller market. If you realize that your total market is shrinking, resolve to be the major fish in a smaller pond. Through lower prices, higher quality or unique features, you could corner the lion's share of the remaining market. Learn what your loyal customer base wants, and then give it to them in spades.

For example, if the broadcast industry uses cassette tapes for its syndicated programs, you could provide the highest quality broadcast tapes, with special timing and cue markings.

* Discover and attack niche markets. Look at narrow markets that have a strong, unmet demand. When eight-track tape manufacturers lost out to the cassette tape players, a few visionary eight-track companies saw a lucrative niche in providing systems for radio advertising. Today, many radio stations have all their advertising on high-quality eight-track cassettes that can be utilized easily while on the air.

* Expand outside your present territory. Grow in either geographic markets or with new products. If you sell in the United States, branch into markets abroad (currently, U.S. blockbuster movies make more revenues abroad than they do at home). If you offered music tapes, expand into "how-to" tapes.

A leopard CAN change his spots.

* Adapt your technoloty to new products in new markets. A chameleon can adapt, but it needs to do some research first. Start by looking at your true "core competency" (what you do well). Because your specialty is NOT your product or service but rather meeting your customers' needs, re-define the definition of what it is you do; this breakthrough vision may lead to new products and new customers.

For example, a West Coast firm known for manufacturing top-quality military sonar systems faced great difficulties as a result of the defense drawdown. The true course to success eluded company management until they finally perceived themselves not to be in the sonar business, but rather in the business of manipulating sound. Today, they have lucrative contracts with several movie studios to enhance movie soundtracks.

Don't let shrinking product life cycles catch your business off guard. Just because the old watering hole dries up doesn't mean your business need to wither along with it. Creative companies should break out the drilling equipment and start some strategic drilling for new sources of sustenance.

Scott A. Clark welcomes your comments and contributions. You may send him your ideas for column topics by e-mail at mail

Copyright 1999
Provided by ProQuest Information and Learning Company. All rights Reserved.