Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/a26f9f83/public_html/articles/includes/config.php on line 159
Changing Strategy Without Losing Your Customers - Three Vital Steps to Refining Your Strategy > NetSparsh - Viral Content you Love & Share

Changing Strategy Without Losing Your Customers - Three Vital Steps to Refining Your Strategy

American Eagle Outfitters and Wet Seal Stores have issued statements about company turnarounds needed to cut sales loses. This kind of story occurs far too often: a business disconnects from their customers because the company either wants to sell to a larger customer base or they want to upgrade to a more prestigious look.

The Strategy:

The strategy may seem initially correct. Here are some examples:

==> Three years ago American Eagle decided to shift from its targeted customer, the high school teen, to the college student body by offering more sophisticated styles. Their intent was to grow up with their customers.

==> Wet Seal felt they had to react when competitor Forever 21 started to offer more trendy items. Wet Seal decided to distinguish itself by upgrading the quality of the products.

==> In an attempt to end a downturn in market share, McDonald's decided to upgrade their menu selections. They introduced higher priced specialties, super sizes, and upped prices on their traditional favorites.

==> Remember when Farmer Jack closed their stores for several days to go to everyday low pricing? It was their attempt to recapture the value-minded customers they had lost to Wal-Mart and Meijer. At the same time, Kroger, which was always positioned on quality and variety, was upscaling to compete with Whole Foods Market and other specialty chains.

==> Unlike Wal-Mart where Sam Walton and his company leaders understood the low-price business, Kmart executives moved into the posh suburbs of Detroit. While Sam continued to relate to his customers, even driving his own ancient pick-up truck, Kmart's CEO had a driver behind the wheel of his luxury car. It is no wonder he became uncomfortable running a discount store chain and wanted to impress his upper-class friends by upscaling the stores.

The Mistakes:

Each of the these five organizations made a fundamental mistake in changing their strategy.

==> American Eagle overlooked the fact that as youth grow into adulthood, they want to leave behind the things of youth. Although a favorite among adolescents, the college customer wants to move from high school and show they have grown up. American Eagle is one of those things they want to leave behind. American Eagle needed to concentrate on building their high school business.

==> Wet Seal was disconnected from their customer. When they differentiated from Forever 21 with higher quality and prices, they forgot that their customer base was more disposable. They wanted new swimsuits through the season, not one suit that will last a couple of years, especially because the trend cycle is shorter.

==> McDonald's decision to upscale ignored their marketposition as a low-cost fast food retailer. They struggled until they developed the dollar menu, which has brought back their base customer. Keeping the upscale menu items, the chain is able to address the desires of a changing national diet while retaining the customers that made them strong.

==> Although Farmer Jack's move was probably the right thing to do, the corporate executives at parent A&P did not understand the margin structure for everyday low pricing, raising prices to the previous high-low strategy. By abandoning ELP, Farmer Jack returned to poor results, sealing the death of the chain. However the Kroger strategy worked because it did not change the customer base.

==> Kmart's move was a disaster at the check-out. To further kill the company, the executive was replaced by a new CEO. This CEO was from an exclusive suburb of New York City and owned upscale "The Museum Company". Although financially astute, there was no chance he would relate to the Kmart base customer that craved Big Red chewing gum instead of Altoids. The company entered a downward spiral that would end in bankruptcy.

Underlying Principle

Let's shift for a moment to corporate culture. The number one problem with changing a corporate culture is that the current corporate leaders see the culture as a comfort zone. The existing culture is what made them successful, therefore it works (at least in their minds). The idea of changing a corporate culture, even for improved productivity or bottom-line results, takes the executives out of their comfort zone - therefore they do not embrace a changed culture. In fact, most will undermine or be outright hostile to a change in corporate culture.

To prove the point, how many executives do you know that have taken their company to casual attire yet still wear a tie? If you know of even one you know too many. Although they may make great sounding excuses as to why they need to wear the tie, the reality is that they have not bought into the changed culture.

The Core Problem

Back to the idea of knowing your company roots, these same "culture-change-fearing" executives will quickly embrace an upscale strategy that ignores the existing customer base. Why? The new strategy is in some way close to their comfort zone. The customer perspective becomes unimportant as the comfort-zone factor kicks in.

This is what the unsuccessful companies above did. In one form or another, they tried to change their customer base. Executives will make this product or service change because these high-paid executives are attempting to take their customers to a place more in line with their own shopping desires or where their acquaintances will give them the most admiration.

Three Vital Steps to Refining Your Strategy

There are three vital steps to take if you want to successfully change your stategy to add more value to your customer. To receive these steps, request the FREE PDF file at www.getmaximpact.com/RequestArticle-Strategy.html.

Rick Weaver is President of Max Impact, a national leadership and organization development company based in Rochester Hills, Michigan. Rick is an accomplished business executive with experience in retail, market analysis, supply chain and project management, team building, and process improvement. He has worked with hundreds of companies to improve sales, processes, and bottom-line results. MaxImpact offers leadership and organizational development services along with employee assessments and background checks. Contact Rick at 248-802-6138 or via email, rick@getmaximpact.com. MaxImpact is on the web at http://www.getmaximpact.com

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Government Technology

With New Strategic Plan, Baltimore Begins Comprehensive IT Modernization
Government Technology
Having received “unbelievably supportive” public comment earlier this year, the city of Baltimore has moved into the execution phase on its first-ever strategic plan — 2018-2023 Inclusive Digital Transformation Strategic Plan — and is in the ...


Belleville News-Democrat

Highland School District looks to the community for help with strategic planning
Belleville News-Democrat
During last month's Highland School Board meeting, Superintendent Mike Sutton announced that on direction from the board, the district will be moving forward with a new strategic planning phase. “The strategic plan should assist in making decisions ...

and more »

WCRP's New Strategic Plan for Climate Research Highlights the Importance of HPC
HPCwire
As climate modeling increasingly leverages exascale computing and researchers warn of an impending computing gap in climate research, the World Climate Research Programme (WCRP) is developing its new Strategic Plan – and high-performance ...


Spend Matters

Strategic Technology Planning: A New Imperative for Contingent Workforce and Services Procurement (Part 2) [Plus+]
Spend Matters
In Part 1 of this series, we provided a context and rationale for the adoption of strategic technology planning for contingent workforce and services (CW/S) procurement. We also began the discussion of what strategic technology planning explicitly ...


Automotive Buy Sell Report (blog)

Prepare for the future with strategic planning
Automotive Buy Sell Report (blog)
The one thing with change is that it is constant. Knowing this, are you prepared for the future and what change is going to occur? A rhetorical question, but one that begs us to consider the importance of strategic planning, as it can prepare you for ...


LETTER TO THE EDITOR: Strategic planning needed in Nanaimo school district
Nanaimo News Bulletin
If we really want to look after the students, our board of education needs to consider the impacts of its decisions beyond the current term, and put more resources and emphasis into long-range planning and strategic thinking. Perhaps it is time to ...


Starkville Daily News

SOCSD Board OKs strategic plan
Starkville Daily News
Starkville-Oktibbeha Consolidated School District Board of Trustees members Debra Prince, left, and Sumner Davis work during the school board meeting Tuesday night. The board approved the district's new five-year strategic plan. (Photo by Charlie ...


Communique

UCCS kicks off 2030 strategic planning process
Communique
UCCS will utilize the experience and services of JERA Partnerships in facilitating and developing the 2030 strategic plan in collaboration with the many university stakeholders. Diane Zile, JERA CEO and founder, and her team engaged the Chancellor's ...


Forbes

How To Avoid Strategic Timing Mistakes Like Exxon's
Forbes
Strategic planning begins with the aspirational destination that is drawn from the vision and mission. Analyze the current reality by using the 5Cs approach and complete a SWOT. Create strategy options to guide actions, overcome barriers, and bridge gaps.


Forbes

The Impact Of Talent On Strategic Planning
Forbes
Is your organization planning its current and future talent needs with the same level of energy devoted to its strategic plan? Your human capital plan must fit hand-in-glove with your strategic plan. A disciplined approach to your talent planning is a ...

Google News

Innovate Today for Great Leaps Forward Tomorrow

How often does your company make a quantum leap forward?... Read More

Becoming Wise - Wild & Free - Writing A Successful Business Plan - Part 2 - Do It In Steps

So you've decided to write your own business plan because... Read More

TQM Total Quality Management, the book

Every decade we seem to come up with a buzz-word... Read More

Planning For The Slow Season Of Your Business To Increase Sales

Every business experiences slower periods. For some, they sell more... Read More

The Impact of Price Popularity on Profits

The goal of almost every business owner is to generate... Read More

The Power of Strategic Thinking: Creating Meaningful Success

Too much goal setting and strategic planning can leave you... Read More

How to Write a Business Plan Market Analysis

Writing a business plan is an essential part of the... Read More

Who is Responsible?

While writing an article recently on effective ways to bridge... Read More

5 Strategies That Will Boost Your Business Productivity Today! - Part 2

Growing your own small business can be one of the... Read More

A Backup To The Internet Is Vital & Now Cost Effective

It doesn't take a Terrorist Act, Tsunami or Earthquake to... Read More

Planning for Success

Business planning is widely acknowledged as one of the keys... Read More

Completing the Annual Planning Process

Imagine an office without a desk, or lights, a computer,... Read More

Under Construction During the Storm ? A Hurricane Guide for Businesses that are Under Construction

As a business owner, you've likely created a hurricane plan... Read More

Getting Started with Succession Planning: Part I

GETTING STARTED WITH SUCCESSION PLANNING: PART IA survey of 4,300... Read More

Do You Have A Customer Identity Crisis?

The trick is to determine what uniquely identifies your best... Read More

Parking Business, the Details on Increasing Lot Revenue

If you are in the parking business and own or... Read More

Content Management: Wise Investment for Business Prosperity

The time when a website was just a simple set... Read More

For Business Owners Only - You Can?t Be Fired But Neither Can You Quit

The decision to sell, or not to sell your business... Read More

Microsoft Great Plains Implementation: Pharmaceutical Corporation Specifics ? overview

Microsoft Business Solutions Great Plains serves mid-size and large clients... Read More

Secrets Of Effective Brainstorming

Have you been in a "brainstorming" session where each person... Read More

Business Plan 101 How to Write a Table of Contents

No matter what business you plan to start in your... Read More

Vendor Relations Strategies Sample Outline

One of the quintessential parts to any business is your... Read More

More Uses for Your Business Plan

You have invested a lot of time and energy on... Read More

The Top Five Reasons Strategic Plans Fail

"Most great plans aren't. They are just nice, high-level ideas."That's... Read More

Strategy Without Tactics is Futile

From time to time there seems to be a flurry... Read More