You will need a well-defined strategy to run a business because a business strategy ensures you can reach your business goals and guides your decision-making process. But creating such a strategy that will be in sync with your company’s vision takes time and effort.
- Toyota: During the seventies, the largest automobile manufacturers in the US held almost 82% of market shares, but things changed when Toyota stepped in. Toyota cars appealed to buyers but the US government imposed hefty taxes to deter Japanese car makers. This tactic failed and the Japanese soon began producing cars in the US itself for much lower rates than the local makers offered. Toyota succeeded because they learnt from their competitors, integrated those with their own methods, and managed to do it better than them.
- Tesla: There are companies that launch a new product free of cost and decide to monetize this eventually when they are sure their customers will be prepared to pay more for it. Tesla however twisted this philosophy and launched a top-of-the-line luxury, fully-featured electric car. They did not come out with a cheap version of their EV to scale the business faster. Instead, Tesla completely took over the supply chain and started investing in factories that would make batteries for its cars and now rules the EV market.
- Airbnb: Airbnb has revolutionized global travels. Incidentally, the first rental was for 3 air mattresses from co-founders Joe and Brian. They launched a website to invite others to place their own stuff for lease. Initially, the response was not encouraging. So, the founders change their business strategy; they started taking pictures of what people were keen to rent. Soon, they began hiring professionals to take free photos of owner listings and started getting more bookings.
- Apple: You will find that all other smartphones pale in comparison to the iPhone because this company waited to come up with something that was bound to turn heads. They could have launched a model earlier when others were doing it but they waited for the technology to grow into something that would be hard-to-resist. It is for someone who has the money to buy it but does not need to be tech-savvy to use it. The biggest takeaway from Apple is that the first mover does not necessarily have an edge over the others. What you need is a proper “follower” strategy which can outdo a first mover strategy.
- HubSpot: This business is worth more than $2 billion USD and they made this possible in an “inbound marketing” industry that they invented themselves. HubSpot came out with a platform in 2004 that allowed businesses to create blogs, social media content and eBooks. The main idea was to attract viewers to read content on a site in the hope that at least some of them would take an interest in what the site was selling too. This was far more effective than interruption marketing which is costly. So, a business like HubSpot launched a new form of marketing to promote their brand and made money through it.
- PayPal: Challenging the banking industry would seem to be a foolish move because for that you will need access to huge capital, regulatory approvals, and credibility amongst customers. Traditional banks have business models that have not changed in centuries but PayPal chose to displace this. The key to their success was an easy-to-use technology even though the company spent less on this than banks. PayPal does not partner with banks; rather with retailers directly. It has emerged as a trusted alternative to traditional payment systems within a few years time.