DrCRM

In previous articles, we explained fox and porcupine strategy in marketing.

There is a direct correlation between professionalism and focus. A heart surgeon can easily perform general surgeries, but he knows that for keeping his credit as a professional heart surgeon, shouldn’t be satisfied to the lower income from general surgeries, otherwise his personal brand as a professional heart surgeon won’t develop.

If companies would like to be known as the best in their industry, have to avoid providing variety of products and services. Although this decision has lots of advantages, it will increase the environmental risk. Often, huge changes in business is so fast to the extent that you can’t easily notice the changes and it leads you to the point that your product or service doesn’t fit the market and your customers have already found other solutions to meet their needs. Here is the point that if you don’t evolve and get in sync with changes, you are sure destined to fail.

Kodak is a well-known sample of this kind. This American company was the leader of the market since 1888. By late 20^th century its Japanese rival, Foji film entered the market, Kodak was holding 90 percent of the market share of negative in the United State. Despite Foji film was offering its product with a cheaper price, it only managed to increase its market share 7 percent from 10 percent in 1990  to 17 percent in 1997.

Digital camera was first invented in 1975 by Kodad. Since the managers looked at it as a threat to their negatives, decided not to make it commercial. This technology was first used in 1994 for apple products.

While Kodad and Foji were busy with intense competition to bring innovation to their negatives and developing their digital cameras so slowly, suddenly found out that Sony had become the best seller digital camera globally. Canon and Nikon overtook Kodak in no time and left only 7 percent of the market share for Kodak. This was the time that digital industry drove negative and old cameras out of the market.

When Kodak managers realized their strategic mistake, in January 2012, declared bankruptcy so that to be able to apply for a loan of 950 million dollars according to chapter 11. During the time Kodak was busy doing research and development in digital cameras to get their market back with innovation, again failed to take into consideration that smart phone and tablet producers are trying to install high quality cameras on their device to meet customers’ needs for digital cameras on cellphone.

Finally, in 2013 this company sold most of its property to several companies namely Apple, Samsung, HTC, etc. with the value of 525 million dollars and officially announced that had decided to leave digital camera industry and start producing scanner and photo printing machinery.

Iran Communication organization is a successful sample of getting in sync with environmental changes. Around 3 years ago when smartphones were entering to Iran market, there was a good market for applications such as Wechat. Having the capability of sending texts, pictures and voices, these applications encouraged lots of users to buy smartphones in order to decrease their expenses.

Since the invasion of applications posed threat on the income of communication organization and operators, they filtered all these social messengers. Customers’ needs were still there and every single day a new solution was offered. Finally, communication organization drew a conclusion that has to change its income model from short message and voice call to selling data and internet packages and get itself in sync with technology changes.

 Imagine the data capacity related to all the videos and voices that are continuously downloaded and uploaded by fourteen million telegram users. That’s why communication system reacts rapidly as soon as any distortion occurs in telegram, saying that they are not intended to filter telegram and their only red-line is channels that are disruptive to national security.

Written by: Majid Barghi

Written by: Javad Barghi

In previous article we stated that companies in which porcupine strategy is applied, only focus on one product or service and they are the best in the marketplace. Brands, namely Akbar Mashdi, Ameh Leila samanou and Seyed Mehdi halim are the samples of old Iranian brands which are still competing in the market. Theses businesses are still run in traditional fashion and in spite of their poor CRM system, they still have long queues of customers.

In organizational field, famous brands such as Bootan, Absal, Akhavan, Aidin, Kachiran, Hakoupian, Tak Makaron, Glbaft and Parcheh Moghadam have deployed porcupine strategy. These companies, have targeted one specific segment of the market and are among the most well-known ones in their oriented industry.

On the other hand, there are companies with various products and assorted brands, simultaneously active in several segments of the market. For example, Golestan company started its activity with “Golestan tea” and added rice, pistachio, ice-tea, herbal tea, saffron, spices, grains and raisin to its list of products respectively. Currently, this industrial group is developing several brands including Pardis, Twinings, Hoti Kara, Royal and Gol kase.

Golrang company is another example that started its branding with shampoo and after its development turned into an industrial group. By introducing several brands which are Aveh, Active, Saftlan, Famila and Oila had developed its market. If you visit Golrang website, you can easily observe that this group has expanded its business to variety of industries such as packing, drug, training, cellulose, insurance, clothing, construction and electronic.

“Palaz Mooket”, adding wallpaper to its products in 1392(2013) changed its brand name to “Palaz”.

Digikala is one of the most classic samples of turning into variety strategy from focus strategy. This website started with the aim of “selling digital goods” and after getting well-known, decided to re-brand and deploy the strategy of “selling goods digitally”. Currently, in digitakala website, you can see products belong to home appliances, health and beauty, art and culture, entertainment and children subgroups.

The classic international sample of this kind is Pepsi which is heard is going to enter the cellphone market. This company has officially declared that has applied to receive lisences regarding cooperating with Chinese companies to produce cellphone and spare parts. Pepsi has already invested in entertainment industry in China.

The story of fox and porcupine refers back to a poem in Archaic period by Archilochus who has written: “Fox knows many things, but porcupine knows one bigger thing”. Fox is a quick and tricky animal which tries many different ways to hunt porcupine. Every day, it hangs around the porcupine’s den, looking for a golden opportunity to hunt it. On the other hand, porcupine is a small animal which moves slowly and can be easily caught in fox ambush.

While fox employs all his tricks to catch its prey, porcupine acts the same every time. It curls its head and feet into his body and forms a sharp shield of armor with his prickly quills. It is so skillful in its only defensive technique that nobody has ever seen a porcupine to have been hunted by a fox.

The confrontation of fox and porcupine attitudes have always been going on among marketers and business owners. For example, conclusions drawn from the research carried out by writers of the book ” Good to Great” demonstrate the effectiveness of porcupine attitude. This team has done a broad study on companies with the compound profit of 3 times higher than the stock exchange market, and has found that these companies, have applied focus strategy on their work. In other words, they were doing only one thing and they were the best at that.

Gillette is a well-known example of these kind. According to reports which are available on Forbes website, Gillette brand with the value of 20 billion dollars, is the 26^th valuable brand in the world with annual sales of 8 billion dollars. In this report, it is stated that 70% of the razor blade global market belongs to Gillette which is amazingly incredible.

By being impressed by the success of this brand, P&G (Procter & Gamble), owners of Gillette company were tempted to offer some more health and beauty products such as toothbrush to the market under the brand name Gillette.

Marketing analysts of the company stated that Gillette’s success is due to its expertise in shaving segment and if the brand is seen on other products, it will lose its identity in a way that could lead to sharp decrease in the sales of razor blade. Consequently, Gillette purchased Oral-B and developed a new professional brand in that segment.

On the other hand, some marketers and strategists oppose this idea and believe that it is not wise to put all the eggs in one basket. They express that this decision could put the business on high risk and if the brand faces any conceivable problem, the whole business will be seriously endangered.

In next article, by using examples from Iranian brands and businesses, we will investigate these two attitudes from other perspectives.