With an uncertain economy, do we try to be a “jack of all trades” serving any kind of customer we can get or do find a special niche to serve? Is the phrase we coined, “find your niche and scratch it,” still relevant? A recent book by three consultants, Fritz Kroeger, Andrej Vizjak, and Mike Moriarty, with the A.T. Kearney Company, provides a clear answer. Analyzing more than 600,000 companies – 9 out of 10 of today’s businesses from the approximate 3,000 recognized industry sectors – they found only three or four companies in each industry are garnering the markets, are capturing as much as 70% of market share.
They predict as many as 90% of today’s businesses will be forced out of business in the next 20 years, but they propose nine strategies small and mid-size businesses can survive by winning in niches. Here are several ways they suggest to pursue the 30% of the market that hasn’t been gobbled up by major corporations:
- Narrow in on particular customers. Even in today’s economy, some occupations are expected to do well, i.e. registered nurses, dental hygienists, computer software engineers, computer application engineers, veterinarians, medical assistants, network and system administrators, and others in health and technical fields. Targeting your services or products to their needs can be a path to a steady customer base.
- Focus on local markets where there are customers whose tastes and preferences vary from the standardized offerings of franchises and national chains that duplicate what they sell and how they sell it. By customizing what you do, when you do it, you can reach those with special needs and preferences.
Cooperate with other businesses in a “business consortium.” A group of companies or independent individuals who join together to collectively do such things as marketing and purchasing. Such consortiums can be small or even international like Ace Hardware where small hardware stores pool their purchasing power. This model can work for the creative and technical fields as well for producing products and services. You’ll find these and other strategies in Beating The Global Consolidation Endgame: Nine Strategies For Winning in Niches, published by McGraw Hill. So, yes, it seems it’s still possible to find your niche and scratch it.
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Adapted from our Costco Connection column from April, 2009
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