I am a Fellow at the Paige Center for Entrepreneurial Studies, Miami University Business School in Oxford, Ohio. Each semester I work with students in a capstone course concentrating on writing business plans. Passage of this course is a requirement for graduation.
The students are typically engaged, bright, concerned for their future, and keen to graduate with the best possible grade point average. At the beginning of each semester, I give them a lecture attempting to assist and guide the students in choosing a business concept, service or product to use as the basis for their teams business plan submission. I always ask the same rhetorical question. They always provide the same wrong answer.
My question is this: Take any product category, let’s choose consumable beverages. Do you want your product to have to compete with Coke, Pepsi, Mountain Dew, 7-Up or Dr. Pepper for shelf space, promotion, end cap display or distribution? The answer I receive, almost always in unison, is no.
The right answer is yes.
The large, seemingly invincible and impregnable, multi-national beverage companies are like all massive enterprises. They are slow, become sclerotic in creativity, management and systems, and are surprisingly susceptible to more energetic, nimble entrepreneurs. We see this same behavior in all mature industries. Automobiles, retail, communications, media, cosmetics, foods, hardware, technology, transportation and clothing are only a few examples of categories constantly churned by failure, improvisation and novelty.
Explaining the beverage industry opportunity for entrepreneurs, in this case my students, is an important example of identifying market niches. Each year new drink capstone project writing service online products fill unanswered niches as entrepreneurs identify opportunities to address consumer preferences with drinks offering new features and benefits. Arizona Iced Tea, Monster, Red Bull, Vitamin Waters, Gatorade, Snapple and dozens of styles of bottled waters and teas are only a few examples of successfully penetrating a mature, very crowded category.
The Coke’s and Pepsi’s have seen their market shares stagnate in recent years. They have become very acquisitive, purchasing many of these start-ups and adding them to their lineups. It is now widely recognized that it is cheaper to buy innovation than to nurture it internally in most cases.
Chrysler and General Motors were venerable business franchises that enjoyed worldwide success and admiration until recently. They have fallen, far and hard. Lack of vision, management flaccidity, labor union corpulence, a reputation for poor quality and lack of styling and value have doomed their enterprise value. Meanwhile, foreign auto manufacturers from China and Korea have evolved to snatch market share and fill voids vacated by the Chrysler and General Motors. The same type of industry evolution is happening in every product category.
In retail, Steve and Barry’s, Bombay Company, Linens and Things and Circuit City are only a few examples of formerly powerhouse national chains that have disappeared. H&M, Zara, Aeropostiale and Sephora, on the other hand, have crafted new merchandising options that excite consumers and propel their continued growth.
This creative destruction and turnover presents an excellent opportunity for businesses, individual inventors and entrepreneurs with truly novel concepts, services and new products. Do not let the appearance of gigantism disable the instinct to compete with big brand houses. “The bigger the harder they fall”, goes the old maxim. It has never been truer.
Identify a niche in a mature industry. Engineer a product or opportunity to fill the identified niche with a better mousetrap, one that provides consumer features and/or benefits that will interest consumers. This is the surest path to commercial success and trumps sheer size in every sales channel.
Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.
After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.