Becoming a unique competitive force. Part 1


Over the weekend I attended a Thomas Plummer & Associates seminar and heard some shocking advice. It should not have shocked owners who have been looking at their clubs in the light of sound strategic planning, but I saw a lot of jaws drop, and questions from the audience revealed initial disbelief.

Thom was talking about profit centers for clubs in the small to medium size range (which he says are the most likely to be profitable in a variety of markets). When he said, “Don’t do child care,” some jaws dropped. When he said, “Aerobics classes are a profit center of the past,” there were murmurs and more questions from the crowd.

To be successful in your market, you do not need to do everything your competition does. In fact you may be considerably more successful by doing less, if you clearly aim what you do at the part of the market you want to serve. You cannot be all things to all people (although there are local market conditions that allow some clubs to be more things to more people than clubs in typical market areas).

What Thom was saying resonated with what I had been reading from Professor Michael E. Porter of the Harvard Business School. Porter believes it is a lack of a unique, preservable competitive position that has caused declining profit rates in a number of industries over the past decade or so. His article, “What Is Strategy” (Harvard Business Review, Nov./Dec. 1996), points out that, “As managers push to improve on all fronts, they move farther away from viable competitive positions.”

What happens is that an initial company starts up and launches an industry. Competitors enter the field and add value features in order to compete. The original company feels the need to copy the new features, as do all the other companies that come along. Eventually, “strategies converge and competition becomes a series of races down identical paths that no one can win,” wrote Porter.

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