readers not be too concentrated in where
they invest their money.
With such a well-documented financial
performance it’s easy to see where the bulk
of the revenue is coming from. Their play
book shows that they are concentrated
with the bulk of their portfolio’s holding,
and they have managed their risk.
They do their homework, have their
rules for investing, and when they find
something that matches their criteria,
they go all-in.
While preaching the eggs in one basket
narrative, they have gained success by
developing a model that works for them,
measured against a focused success factor
- heritage, strategy, skill, marketing; and
that is what they use to make investment
decisions.
You and I would buy stocks, real estate,
bank cash in the money market. When
asked why, you would say to diversify
my portfolio and prospect. Against what
risks I may ask? The looming property
bubble and rise in dollar rate. Why those
investment channels though? Because
you read about them in the newspaper
and watched an expert on TV. What do
you know about the strategy, skill and
marketing of the company? --- Nothing.
Diversification is what we are repeatedly
told to do. And we do it the best way we
can understand.
Most successful companies display
more concentration and focus than
diversification. How then do we scale
businesses? Two offers. Two channels.
Much as there are many aspects to scale,
by the time you are in a business you
definitely understand what you want to
scale. The best method would be research
and study companies you wish to emulate.
The more obvious examples are Apple,
which gets up to 70% of its revenue from
the sale of the iPhone. They sell via retail
channels and not a direct-to-consumer
model.
KFC sells chicken, in all forms, aspects
and sizes. And it comes with a soft drink,
not tea, not coffee. Be it winter, summer,
spring or autumn. Focused business, but
selling a range of ‘diversified’ chicken:
fried, in a burger, nuggets, crispy, not
crispy, spicy, not spicy. Coca-Cola’s anchor
product is Coke. There is Fanta, Sprite,
Krest but these others will never over rule
the anchor product. When health became
an issue, coke zero was introduced. It’s
still a coke. Focus. Being focused on the business isn’t just
about giving the requisite time, effort
and mindshare. It is also about putting
the time, money and resources into the
highest leverage and growing scalable
opportunities.
The secret with these businesses is that
they found success, and went hard after it.
They have leaned into success even when
other channels and offers have not been as
popular. When exploiting an opportunity,
another area may have to suffer. Giving
disproportionate attention to various
parts of the business is important even
when critics and advisors may tell you that
you are missing out on opportunities in
the market. Back to the insurance scenario, Yes, I
can get a one stop insurer for all my
insurance needs, but will they offer me a
soft landing when I really need it, or will
parts of my landing be smooth and other
parts be rough?
As a business owner or marketer, you may
be the only one who will understand the
level of investment that may be required
to silence the critics. As long as you are
scaling a product, service or the overall
business, then the criticism is good. It
helps you focus on getting the job done,
winning customers to prove the naysayers
wrong.
Truth is that in our minds, we have come
to associate different brands to meet
our different needs. If the marketers at
these companies asked their clients what
they know them for and took a step
back to scale in that area, then another
and another, instead of running all the
portfolios as a parallel, would it make a
difference?
Perhaps just two offers and two channels
would
provide
the
much-needed
concentration and focus in this age of
diversification and changing business
landscapes.
Maybe if we stopped trying to find the
hard words and the how-to’s in Warren
Buffet’s books we would begin to see and
understand what he is really saying and
apply it in the context of marketing: "As
long as you are ‘invested appropriately’ for
your goals, stay away from your investment
portfolio…. If you're trying to buy and sell
stocks, and worry when they go down a
little bit … and think you should maybe
sell them when they go up, they're not
going to have very good results." - Warren
Buffet, Source: CNBC.
Diana Obath is a seasoned Public
Relations and Communications
Specialist. You can commune with her
on this or related issues via mail on:
[email protected].
ltd
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MAL29/19 ISSUE