Hedgehog Concept As a Basis For Tactics & Strategy
This post is based partially on "Bottom-Up Marketing" by Al Ries & Jack Trout and "Good to Great Why Some Companies Make the Leap and Others Don't" by Jim Collins.
I don't have space to do complete reviews. To get fuller explanations, please read the books or summaries.
Often you can get more value from a book by combining it with another. I'm adding insights from other sources.
Pick an Action & Make a Plan
Choose an available tactic (action) nobody uses in your local business category. Use a strategy (plan) to make the tactic effective.
For manufacturers, tactics are making & marketing products for specific purposes. For retailers, optimal tactics are stocking & marketing products for people in specific conditions.
Strategic details should include choosing advertising media to reach people with offers based on where they are.
Successful strategies are focused on general factors like -
Which specific benefits do we offer? Who will buy those benefits? Why & how will they buy those benefits?
A few more specific factors are -
From whom, do they prefer to buy those benefits? Where do they want to buy those benefits? How often will they buy those benefits?
Tactics should be refined based on strategic insights.
Ultimate Success Requires Specialization
Jim Collins emphasized using a Stop Doing List because people should do what's most important. In his main analogy, a fox knows many small things & a hedgehog knows one big thing, which works in many conditions.
A fox should use a Stop Doing List to narrow its focus. A hedgehog protects itself with one effective tactic, so it's already focused.
Some criteria for forming a tactic are the 3 Circles of the Hedgehog Concept.
1- In your local business category, what can you do best? Among those abilities, what can you consistently do better than everybody else?
2- When you consider things you can do best, what do you feel passionately compelled to do?
3- Now you need an economic engine. When you've chosen what you can do best & feel compelled to do, determine how to it professionally.
Collins advises doing what you're genetically encoded to do. He emphasizes focusing on natural abilities because excellence is more likely.
You might create superior value with your natural, tactical abilities.
You should offer what people won't get from others. When your business is based on unique natural abilities, your offers can be unique.
You need to determine which personal & professional resources will make your economic engine effective & efficient.
You don't need a perfect engine because you'll need to make adjustments as you test methods.
A Strategy Makes A Tactic Effective.
What's your strategic plan? Which methods will you use? What will you do & not do?
If you offer a service, will you do it at your location or customers' homes & offices? You could pick up machines & deliver them after your service.
If you offer a product, will you sell from a permanent store, a truck or in customers' homes & offices?
How will you get needed resources? What kind of equipment will you use?
Which skills are necessary? How will you develop your skills? How will you find people who have necessary skills?
How will you incentivize skilled people to join & stay on your team? Which opportunities will you offer?
Team members are employees, plus product & service suppliers.
Jim Collins advises finding people before determining what to do. Collins used an analogy of getting the right people on your "bus". His case studies were established businesses, so in effect, they had buses already.
New businesses have different needs. Business owners should build a "hedgehog vehicle" for a particular purpose.
When you establish a general direction & purpose for your hedgehog vehicle, you can determine who can contribute what you need.
When you decide what to offer, you'll know which skills your team needs. Each skill contributes to building & operating your vehicle, so you can reach your destination.
Your economic engine is your ability to sell. You need to work on other things even when they don't lead directly to sales.
If you focus too much on your economic engine, you might neglect other functions. Working on each skill is like maintaining your whole vehicle.
If you try to do too much by yourself, you might not have each necessary skill.
Big competitors have necessary skills to defeat you. You need multiple skills for simultaneous driving, navigating & maintenance during a non-stop race.
As you build your hedgehog vehicle, you should check your conditions. How will your vehicle endure economic & competitive forces?
As you assemble a team & gather resources, you'll test methods & track consumers' responses. You can change your To Do List & Stop Doing List based on their responses.
You should also decide what to do more & what to do less.
You & your team might adjust your roles. When roles change, you might need different team members. Each change can lead to other opportunities.
As you test methods & monitor competitors, you can make adjustments. You might avoid big, expensive detours if you test & adjust regularly.
You'll need to adjust your vehicle, so it should be built for a variable competitive terrain.
You can protect your business with defensive adjustments as you monitor conditions.
As competitors test methods & change inventories, you can track their results & effects on your business.
You need to make your main tactic & strategy consistent, yet flexible. You need your business to be flexible enough to bend, so it doesn't break as the terrain changes.
When you set up methods, you need to decide why some methods will be similar to or different than competitors' methods.
Example - Big box stores cut labor costs by pushing self-service. You can make different aspects of your store self-service. You can have information kiosks & charts, so people can find answers. While some customers serve themselves, you can help others with more complex tasks.
If you do it, you'll offer more information than some big stores, plus you'll provide more service. You could include a statement on your kiosks & charts to explain how you can serve people better while others find information.
Retail Connections
Big box stores push products, you should promote solutions.
You can increase your trade skill by listening to customers & offering solutions. Improving your trade skill will make you a stronger competitor.
As you listen & learn, you can adjust your offers.
Stores can be more than places for people to buy products. Retailers can connect people to better conditions.
Some people know what they need to achieve better conditions. Others feel a gap, but they don't know how to fill it. They can't solve problems with vague product knowledge.
High tech products are often crammed with features & potential benefits. You can help people convert features to solutions in their conditions.
You can guide people from current conditions to their desired conditions.
Your tactic & strategy can include guiding people. Matching products with people's needs can be part of your Hedgehog Concept.
Needs can be expressed as gaps. People's conditions can be expressed as puzzles.
You could offer pieces that fit gaps better than competitors' pieces. Your Hedgehog Concept could include putting pieces in place better than anybody else.
You can adjust your business according to what's currently important to your niche.
What are more important now could be product factors like functionality, reliability, durability & convenience.
You might need to adjust aspects of your business like location & business hours, plus wide &/or deep selection of primary products & accessories.
Copyright 2017 Dennis S. Vogel All rights reserved.
When you compete against big businesses with big budgets you need powerful marketing strategies and tactics. You'll find them here-
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