At last we managed to make a break from the countless weeks of painfully decreasing SHV and although the improvement was small, it was a victory I could happily claim. We had finally broken away from being reactive to our competitors and at last being proactive. So although this is not necessarily a current problem, I think this is definitely an issue worth discussing as to see how I can further this improvement especially as the end nears. Our greatest problem was that we were trying to spend around the same as our competitors on marketing although we were not getting much return on our investment. We had fallen into the advertising war. And yet we had convinced ourselves that we had to do this just to fight for our market share, but we kept losing it. And from there on, profit was never gained.
I found Christensen (2010) offered a refreshing perspective on competing in the business industry and not getting lost in it but remember the original reason as to why you began. Although his original reason was to essentially make money to live a good life, I found it was also relatable to maintaining your strategy and not getting caught up in what your competitors are doing. He elaborates how some make money but become hungry for even more and then sacrifice their spare time to work instead of actually enjoying their money. They lost the purpose of working. In the same way, we set off our Mikes Bikes with a strategy to differentiate but somewhere along the line we got caught up in keeping up with everyone else which made us invest where we shouldn't have. We finally realized that this could not could continue and made cuts to our marketing of around 3 million. Despite the drastic cut, the rollover showed the carry on effects as we didn’t seem to lose market share or sales.
In order to further improve, I feel our main weakness is in our products which are either way off the centre of the perceptual map, or are exactly the same as others products by other competitors. This definitely showed we were not successful in our original strategy to differentiate. However at this time it is far too late to update them. We couldn’t do this before as we felt we couldn’t afford to due to our lack of profit.
As of now, I don’t really have a plan of action, however I do know it was right to cut marketing costs. We were aiming far too high where our competitors had already secured a decent portion of the market and therefore could afford to spend more. I think we will have to evaluate every cost and determine the value of it and continue to cut where we can.
Christensen, C. M. (2010). How will you measure your life? Harvard Business Review, 88(7/8), 46-51.