Imagine waking up every day and taking on the might of a $500+ billion retailer like Walmart.
Have you ever wondered how some businesses manage to compete with such a juggernaut? The contrast has been stark – big box vs local retailers. Some observers would have you believe that big box is out to dominate and crush the independent, but that’s not the case.
Both Walmart and Fred’s Bike Shop sell bikes. But, it would be a mistake to judge the two places by the products they sell, instead of the value proposition they offer their customers.
Walmart caters to low price shoppers. They feature roll backs. They have built a very successful business on mastering relations with suppliers, being the best in class on logistics and perfecting their supply chain and inventory management. They can leverage their scale in any market. The result is exceptionally low prices on a wide range of goods.
Walmart is focused on Best Value.
On the other hand, Fred’s Bike Shop caters to those who are serious about biking. The staff is very knowledgeable about bikes and riding. When you visit, they will seek to understand what you want out of your bike and how you plan to use the bike. You will likely get on and off of multiple bikes as they look for the right fit for you. You will leave that shop with the absolute perfect bike for you and your intended use.
Fred’s Bike Shop is focused on Best Solution.
On the surface they both sell bikes. But that’s not what they’re actually selling.
At Walmart, you’re buying the comfort and peace of mind of knowing you paid the lowest price on that bike.
At Fred’s, you’re buying the knowledge that, without question, you’re on the best bike for you.
Both Walmart and Fred’s are perfectly viable businesses. The middle ground is not.
What does your business sell in your marketplace – Best Solution or Best Value? You can’t be both – it’s a critical mistake trying to be all things to all people.
Answering this, is the first step to growing a truly profitable business.
We can help.