SMES: HOW TO MAKE A HOLE IN ONE?

Ben Hogan, one of the best golfers in history, once said about his discipline: "This is a game of misses. The player who misses best, wins."

Although golf is not a popular sport but rather an elite one, it is well known that its objective is to get a ball, with the least number of strokes, into holes distributed over a course. To this end, the player uses one of the clubs in his bag for each type of shot.

Likewise, in terms of business strategy, the owner of an SME should behave like a golfer choosing the best club for his shot. Therefore, this article will try to function as a caddy, assisting the entrepreneur in the management of his firm and the choice of his plans. 

Let's start by saying that the right STRATEGY is the one that fits the strengths of the organization and the sector of the economy to which it belongs. Therefore, the entrepreneur must choose the tactic that will give him a competitive advantage.

A competitive advantage is a characteristic that, among other things, is valued by a specific segment, is difficult for a competitor to imitate, allows access to different markets or allows scaling in different products. 

Although there are an infinite number of strategies to choose from, we will concentrate here on three generic ones: cost leadership, differentiation and focus. 

The first is observed when the prerogative is based on having the most basic costs. To achieve this, overhead costs must be kept to a minimum and an attempt must be made to reflect this decrease in retail prices. However, the goods or services must arouse the perception that their quality is comparable to that offered by their rivals. 

On the other hand, the DIFFERENTIATION STRATEGY attempts to achieve unique and highly valued products. To that end, it is concerned with achieving exceptionally high efficiency of goods, extraordinary service, innovative design, technological capability or positive brand image. 

Finally, the one that is currently most recommended for any SME is the FOCUS STRATEGY. It involves a cost advantage or differentiation, but within a limited niche. This segment must be studied in detail in terms of its habits, desires, perceptions and tastes in a given situation, since no one behaves the same in the court as in church. 

To make the latter more understandable, I will illustrate with a fictitious segment description, which I will call "Silvia". Let's begin: Silvia is a person who likes to take care of her physical appearance and believes that through sports and healthy eating she will do so. Being fit is important to her, because physical activity motivates her and makes her feel better. She is a methodical person, who likes to follow a daily routine. She worries that she will not be able to follow her diet when she goes out to eat with friends or co-workers. Likewise, she does not have time to travel to her favorite restaurant at lunchtime.

Silvia sees that her colleagues who do not do sports are less healthy than she is. The market offer for athletes is wide, in all types of services, except in the gastronomic sector, where restaurants are hardly concerned about the diets of their customers. On the other hand, in her environment, her friends are also concerned about eating well and doing some kind of gymnastics.

Silvia likes to explain what diets and exercises she does and share these experiences on her social networks. It is not easy for her to find a restaurant where she feels comfortable. She is frustrated by having to eat in a hurry on weekdays. She doesn't want to lose her fitness. Silvia is motivated by pushing her limits and often sets herself challenges.

In conclusion, by getting to know Silvia well, we can find out what she needs and is not satisfied by others, so that we can provide it to her.

Returning to competitive strategy, it is worth noting that if an organization is not able to develop a cost or differentiation advantage, it will be STUCK IN THE HALF. This happens when its expenses are too high or its business units do not provide a distinction. So, in order to avoid a bad shot, like a golfer on a green, the entrepreneur has to make a conscious choice in this regard. 

To get a glimpse of the use of this tool, I will comment on the case of a client I recently advised, dedicated to offering a wide variety of ecological personal hygiene products in a downtown location. He wanted to achieve a cost leadership strategy. The problem was that he did not have a reasonable competitive advantage that would allow him to try this path. 

He began by analyzing the profile of the ideal customer for his business and determined that it was one who, among other characteristics, was environmentally conscious. At the same time, it was verified that he was capable of paying any price in order to take care of the environment. Therefore, it was decided to turn to a differentiation strategy focused on this specific segment, concentrating on providing exceptional service and achieving immediate delivery to their homes. Today, this customer has its own online market place and an enviable portfolio of people who come to us through recommendations from other buyers. 

So, dear SME entrepreneur, to quote the prodigious Tiger Woods: "No matter how good you are, you can always get better, and that's the exciting part". I close then the article by inviting you to action, to visualize your company as a bag where, instead of golf clubs, you should opt for the right strategy. Only then will you get a hole in one in your company. 

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