Its The Most Wonderful Time Of The Year Or Everything Old Is New Again
Dec 10, 2009
If you want to listen to the Andy Williams’ classic while reading, here is the link on YouTube http://www.youtube.com/watch?v=gFtb3EtjEic
Having spent a number of years in the toy industry, this time of year was always fun. How could you not smile even when putting in endless hours finalizing budgets? There were talking Alvin and the Chipmunk toys on the bookshelves or the latest edition of Matchbox cars on the desk.
One thing about the toy industry, many toys are not necessarily new ideas. They are an update of an older one. There is nothing wrong with that. People make a lot of money by updating existing ideas. Today, kids use paintball guns. Back in the 80’s and 90’s, they played Laser Tag (the gun emitted a light that set off a sensor on an opponent’s vest). When I was a kid, we used die-cast metal cap guns (there were a lot of arguments about whether you got your opponent or he got you). Even Rubik’s Cube has been updated (an iPhone-like electronic version).
Every so often, a company’s big idea to update or reinvent a product comes up short. New Coke anyone? Even Coca-Cola’s competition isn’t immune. Earlier this year, Pepsi’s Tropicana Orange Juice staged a major re-branding by updating its iconic image to a more contemporary one. Sales promptly dropped 20%. In less than two months they went back to the original image. The problem was that it was harder to find the product on store shelves. It looked like other more generic brands.
Many companies look to reinvent the way they do business. There is one company that comes to mind that has transformed itself a few times. It started as a time recording company, became an office equipment company, then computer hardware. Today it gets the lion’s share of its revenue from technology services. Ever hear of IBM?
Many small business owners find that they must reinvent themselves to compete in today’s world. An acquaintance of mine (an owner of a printing company) feels that in 5-7 years, his company will not be providing traditional print services, but will be more of a marketing design and consulting company. He is laying the foundation now.
The key to making changes in your business is to plan accordingly. The decision comes down to dollars and cents. To put it another way, it is your dollars and does the change make sense? Are the financial rewards sufficient and are you comfortable with the associated risks? Making financial projections and running “what if scenarios” will help in the decision making process. Will this exercise guarantee that you will make the correct decision 100% of the time? No it won’t, but it will help you access the risk associated with a given business strategy. It may not be as sexy as making a decision based on “your gut feel,” but at least you know you’ve considered various options.
If you need help accessing the risks in your business strategy, call Ed Baloga, at 914.474.9547 or via email at firstname.lastname@example.org.