Dr. Sundar ParthasarathyGuest Author

Greatness not from size, but from niche

By | Dr. Sundar Parthasarathy | Helping you with insights and actions for success

A well-defined niche, the strategy that fits it, and the well thought-out execution can make a business stand out in more ways than one.

I am sharing with you the link to a recent article – I call it the “Aldi success story.” It will keep you engrossed if you like #retailing or #businessstrategy.

Here it is: https://www.theguardian.com/business/2019/mar/05/long-read-aldi-discount-supermarket-changed-britain-shopping

My key takeaways from the Aldi success story:

1) Finding a niche (i.e., narrow and sharp focus) and staying the course to domination, can also be a strategy for the long term.

2) Just finding a niche is nothing much, unless it is backed by stellar execution (Just as true with any strategy!). The way Aldi executes mirrors the ‘Blue Ocean Strategy’ [‘Eliminating’ the unnecessary which does not create/deliver value; ‘Reducing’ that which retards/slows down/creates inefficiencies; ‘Raising’ the value delivered; ‘Creating’ value that is unique in the business model].

3) Businesses that vigourously pursue growth often run the risk of entering the “valley of death.” Companies then find their way out or die or settle for a zombie-like existence. Stick to your knitting. That will ensure that scale-up is sustainable.

4) Invest in technology wisely. Look for leverage. Differentiate between technology for the routine versus technology for strategic impact. The former may be necessary, but it may help just meeting ‘hygiene requirements.’ Missing the understanding about the latter could result in ‘me too’ investments with poor RoI, due to lack of leverage.

5) The litmus test. You know your strategy is working when there’s profitable growth over the medium to long term. The other indicators from the Aldi story are: (i) what is offered may be priced attractively, yet the “low price” is not the only appeal, and there are other value propositions that customers see, (ii) the improved market position, (iii) Aldi’s “smallness” is not hampering their ability to deal with some suppliers who could be bigger in stature; and (vi) Aldi has even made some ‘rules of the game,’ that even and the ‘big boys’ cannot ignore and, (v) the rivals who were above Aldi in the pecking order, entered the Aldi niche! 

Anyway, read the Aldi story. A long one! But surely a story that has richness for takeaways.

Hoping to hear from you what you took away. Of course, it will also be interesting to read what your views are on this post or any comments that others may put here.

So, join in!

Republished with permission and originally published at Dr. Sundar Parthasarathy’s LinkedIn

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