3 Strategies – Good, Fast or Cheap

When I first saw this picture a couple of weeks ago, I had a really good chuckle.Good, fast or cheap - which strategy will you choose to grow your business?

Then I realized – it illustrated the key aspects of both strategy development and execution far more effectively than all of the books and articles ever written.

You’re a business owner, the company’s done well, but you know there’s room to grow and you know where you want your company to be in 3 years’ time.

To get there, you will have to do a number of things.

One of the most important is you’ll have to make choices.

You can be a low-cost provider, the cheapest supplier in town, low margins offset by high turnover.

To prevent those skinny margins disappearing, you will have to keep 2 things low:

•  The cost of making or buying your product or service. That will affect quality.
•  Your overhead – which means you won’t be offering the best delivery or support around.

So being cheap is OK but your service won’t be perceived as good or fast and you’ll be continually fighting to protect, or expand, your market share on price alone.

OR

You can differentiate your products/services by providing good quality, fast service or both. Lower turnover is offset by greatly improved margins.

•  Your cost of making, or developing, your product or service will be higher because you’ll use the best materials and skilled labour.
•  Your overhead will be higher too. Fast delivery requires competent people and good infrastructure; maintaining a reputation for quality requires research and development and innovation.

So you can be good, fast, or both but you’ll be well up the price range. Perhaps even in the wonderful world of premium pricing.

But you won’t be cheap.

OR

You can focus on a specific market, segment of a market, or niche and build the reputation for specialized knowledge and expertise.

In this case, you shouldn’t have to be cheap since your expertise should create the perception that you’re good.

If you’re really good, you can, to at least some extent, choose how fast you want to be. Why? – Because people will wait for the best specialist to fix their problem.

To wrap up, let me return to the point I made about the picture earlier – it’s taken me almost 300 words to say what it said in 26! And I’m sure I haven’t made you laugh once.

 

If you enjoyed this post you’ll also enjoy Want Your Company To Grow? Here Are 3 Words To Live By

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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Tags: business owner, good fast or cheap, growth, Jim Stewart, Leadership, low-cost provider, markets, Planning, products/services, ProfitPATH

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