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What business are you?
Although, the famous article entitled Marketing Myopia was written by Theodore Levitt in 1975, I think the concept proposed in the article is still very relevant. In fact, I think the understanding of the concept will become increasingly important for survival in the changing global business environment.
So what is the concept behind the above article? In the article, Levitt has suggested that most companies fail because they define the business you are in the famous article called Marketing Myopia. In short, companies are defining what business narrowly in terms of product rather than the benefits of the product or service offers to the customer.
He has used the example of the railroad industry U.S. to explain what you mean. Railroads were the backbone of the U.S. economy. However, slowly and steadily, the railway companies U.S. began to go red. This happened despite the fact that the U.S. economy was growing rapidly. More and more people traveling and more and more Goods are transported throughout the U.S.. To justify their sad performance, each railway company was pointing to the poor condition of the rail industry in whole. Levitt suggests that the poor condition of the rail industry was because the railway company is defined as "railroads" and as such, only thought other railway companies to their competitors. Whereas, Levitt suggests that the rail industry should have defined their business as "transportation of persons and goods. "This would help with the railway companies to identify who your competitors are real and that it was taking away their business. Knowledge who their real competitors have made the railway companies realize that the airlines, the trucking industry and industry cars were taking customers away. They also have realized that they now had to compete with them and not only railroad companies of others.
While teaching the importance of competition to target = "_blank" title = "management seminars" to students management> I always ask: "Suppose you are the CEO of Maruti Suzuki, a leading Automobile Company in India. Now tell us What business are you? "The answers they give are usually are mostly the obvious, ie, cars, wheels and cars. And when I ask a follow-up question of who their competitors, who named all the car manufacturers. According to Levitt, it's that strict definition of what you are in business that leads to destruction of a large number of companies. Levitt theory taking into account, Maruti is in the business of "transporting people." The benefit that customers receive the use of cars that can be transported to a destination of your choice. As such, Maruti should be considered to be a part of the industry transport, not only as a part of the automotive industry.
Now they are its competitors? Well, everyone in the business of transporting persons, and even some that do not belong to this industry.
We will discuss this point. First, it is obvious that all car manufacturers are your competitors. This of course not need further explanation. Here are some motorcycle manufacturers are also its competitors. Surprised? Well no. It is clear that as the difference Price between vehicles and motorcycles decreases, there is a strong likelihood that some people who were thinking of motorcycle can buy a car, and vice versa. In fact, Maruti is trying to attract users of motorcycles, keeping the price low Maruti800 model. Motorcycle manufacturers have to keep it prices Maruti800 into account the marketing of their products. Another example is the Nano car, expected to exert competitive pressure on the motorcycle and tricycle industry.
Who else carries people? What about the airlines, bus and train service? Let's see if these industries are also competitors of Maruti? There was a time when there were only three viable options and convenient to travel from Delhi to Chandigarh, ie by car, bus or by air. Each of these competing with each other and were all viable options for travel. It was the railroad that changed the competitive scenario of 180 degrees with the introduction of Shatabdi Express. Now, most people travel by train to Chandigarh negative consequences for the automotive and airline industry.
Impressed? No se. More Maruti's competitors, but not the obvious choice. Let me explain what I mean with the help of an example of JC Penny, a chain of more than 100 department stores U.S.. Each fall and winter, JC Penny employees travel to these 100 stores to implement the new store. Obviously, people travel to its 100 stores mostly in car and air. Even employees who were traveling by air, had to use cars to get to the airport and rent a car to get to your destination. It is obvious that JC Penny this activity not only created a demand for various industries, including automobiles, hotel rooms, restaurants, gas stations and airlines. Guess What does JC Penny now every fall and winter. It binds to all its stores with video conferencing changed its distribution plan of the store without even a single person leaving his home. So what do you think about the demand for cars? It goes down. Now, who is a competitor of the automobile producers The Maruti? Videoconferencing equipment manufacturers.
At the beginning of this article, has stated that the concept proposed by Levitt in 1975 is not only relevant today day and will become increasingly important in the future. We are all aware that technology changes rapidly change is discontinuous, ie change that has no connection to the past. As such, in the future in the competition will not know. The emails made fax machines obsolete. The mobile phones are becoming obsolete. You can watch movies on demand on your TV or mobile phone. When the technology will take us, I do not know. As such, I think it will become increasingly more important to define your business in a comprehensive manner based on the benefit that their products of services provided to final consumer. Exactly what Levitt suggested in 1975.
So before you sit down to develop any strategy, first set "How what business are you? "And" Who are your competitors? "Remember, it is necessary to define what business is located in a large Based on the "benefit" that provides the target = "_blank" title = "Customer"> client and not strictly according to the type of products "."
About the Author
Avinash Narula is a passionate management trainer and motivational speaker par excellence. His highly interactive and engaging style of conducting training and seminars is incomparable. With a perfect blend of theory and practice, he makes management concepts easy to understand. He also makes extensive use of real life examples to keep the participants interested right till the end. With a friendly presentation style, it is just fun and interesting to listen to him.
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