Are You Brave Enough to Cannibalize Your Business in Order to Save it?

I love it when companies shape a strategy in order to save themselves.  Usually, when companies make drastic changes they usually just downsize(e.g., lay off the receptionist and the file clerk.) This was a common story in 2010. But not for The Atlantic. Gigaom recaps the resurrection of the Atlantic after it had not showed a profit for over a decade.  In 2010, The Atlantic implemented a revolutionary strategy that resulted in a $2 million profit. I will not repeat the article but outline some ideas that you can take to your business.

  1. Be an industry leader, not a follower. (see my previous blog on Looking in the Rear View Mirror).
  2. Make a cash flow budget over the next year, but don’t use that as a strategy.  It should only aid your tactics to stay in business until you execute your new strategy.  If you are a business in the black, make one anyway.  It may help you run more efficiently.
  3. Investigate the concept of shifting some of your operations from a brick and mortar business to a viral business. For example, if you own a restaurant, at first glance, you may not see any opportunity to avoid the brick and motor business because you need a place for your customers to sit.  However, have you thought of packaging meals for web orders?  This strategy may only account for 15% of your business, but it could have a 20% higher net profit return.  There are many options.
  4. Review your target customer.  Are you meeting their real needs, or you just trying to sell them what is most profitable for you?  Do you need to target a new clientele?  A good example of this is the Five Crowns Restaurant in Corona del Mar.  The restaurant was established in 1965 and has catered to an older clientele.  About 2 years ago, they allocated a portion of their restaurant with a seperate entrance called The Side Door. This pub-style, fun-loving division has been popular with the younger crowd.
  5. Adjust your operations to your strategy, not your strategy to your operations.

In these difficult times, there are still opportunities for those who dare to take the initiative.

This entry was posted in Business Finances, Strategic Planning and tagged , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

4 Responses to Are You Brave Enough to Cannibalize Your Business in Order to Save it?

Leave a Reply

Your email address will not be published. Required fields are marked *

*


*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>