To formulate a strategy, you need the courage to be hated

Strategy means giving up, and giving up means being "hated". A brand must have the courage to be "hated". In order to win some customers, it may even deliberately offend other customers. I hope this article can bring you some inspiration and I recommend it to my friends in brand operations.

Strategy means giving up, and giving up means being "hated".

But to formulate a strategy, you must have the courage to be disliked. If you are not disliked by some people, you will not be liked by others. If you want to be liked by everyone, no one will like you.

In order to win over some customers, you may even deliberately offend others, because establishing a common enemy is a prerequisite for building a sense of identity.

1. Volvo limits the maximum speed

In May 2022, Swedish car manufacturer Volvo announced that in the future, the maximum speed of all Volvo cars will be limited to 180 km/h.

As we all know, Volvo's positioning is "safety". For the sake of safe driving, Volvo not only gave up the first design principle of aesthetics in appearance design, but also gave up the first design principle of "driving pleasure" in driving experience.

If the speed is limited, the driving pleasure will definitely be lost. Customers who pursue the driving feeling will hate Volvo and may even laugh at Volvo owners as elderly people without adventurous spirit.

But Volvo must do this if it wants to stick to its strategic positioning of "safety".

BMW, on the other hand, does not need such a design, because its positioning is "driving". In order to give customers the best driving pleasure, it even has to shorten the body, because a body that is too long will affect the driving experience and it will be inconvenient to overtake on a curve.

Even a shorter car body will endanger driving safety, because a long enough car body can provide enough cushioning when a collision occurs. A shorter car body will also affect the car's sense of dignity, because a long enough car body can leave enough space for the back seat to make the passengers feel comfortable.

But BMW did not do so, because "safety" and "prestige" are not its own strategic positioning. The former belongs to Volvo and the latter belongs to Mercedes-Benz.

It is a well-known fact that BMW's rear seat riding experience is poor. What would happen if it listened to the feedback from some customers and made the rear seat space larger and the body longer?

The result is that it is pursuing the "exclusive feeling of riding experience", and this field belongs to Mercedes-Benz. If customers choose BMW because of the good riding experience, then why don't they choose Mercedes-Benz?

When competition reaches its extreme, this situation will occur: you can only have one feature. Customers who like this feature will like you very much, and customers who hate this feature will hate you very much. You need to have the "courage to be hated."

But many people don't have the courage to do so. For example, in the automotive industry, some people want to build a car with good driving performance, high safety, and a noble experience. Such products are difficult to win the choice of customers, and can only rely on "cost-effectiveness" to fight price wars and survive on low prices.

Because it doesn't want to offend anyone, it won't win anyone over.

2. Jitu Express’ 17% lost package rate

In the express delivery industry, a 3% lost package rate is very high. However, Jitu's lost package rate can reach 17%, and it is still growing rapidly. Because it pursues low prices, the company behind Jitu is Pinduoduo. In order to achieve the lowest prices, a high lost package rate is acceptable.

Military strategist and strategist Manstein said that pursuing multiple goals and then exhausting resources is the most fatal mistake. In order to achieve decisive goals, unimportant goals must be sacrificed.

Back to Pinduoduo, its agricultural products are very poor, and many of the fruits it sells are rotten, but customers don't mind because it's cheap. Its computer and mobile phone peripherals are very poor, and you can smell the smell of low-quality plastic when you unpack the express delivery, but customers don't mind because it's cheap. Not to mention the clothing, shoes and hats it sells, which are likely to shrink and fade after one wash, but customers don't mind.

Because it's cheap.

So even though many customers hate the poor quality of Pinduoduo's products, it does not prevent it from becoming the most popular e-commerce company of this era.

Fast, good and cheap. You can only choose one. If you want to save money, you have to go to Pinduoduo. If you want fast delivery, you have to go to JD.com. If you want a wide selection, you have to go to Taobao. If you want good quality, you have to go to Tmall.

If you want fast delivery, you have to run your own e-commerce and build your own logistics, which will be costly and you won’t be able to offer the lowest price. If you want the lowest price, you have to choose the lowest price and put quality aside. If you want to have a wide range of products, you have to allow all manufacturers to enter, and it will be impossible to eliminate fakes on the platform. You can’t deliver goods quickly either.

Fast, good, cheap. If you choose one, you have to put the other three in a secondary position. You have to have the "courage to be hated" to offend some people, only in this way can you win your customers.

JD.com's strategic positioning is to build its own logistics and deliver goods quickly. It has also used this advantage to attack Taobao, emphasizing that low price + fast delivery is what customers really need, and guiding more customers to shop at JD.com.

The guy who ordered a razor had his beard grow to his chest before the razor arrived. The girl who ordered sunscreen had her skin tanned before the sunscreen arrived. Such exaggerated performance makes people worry about Taobao's logistics and delivery capabilities.

It’s not just about low prices, it’s also about speed. Taobao has been criticized for its large volume of shipments and untimely logistics. This is an inevitable flaw of platform-based shopping malls: there are a large number of merchants on the platform, and as a platform, the mall is happy to see more merchants settle in, but the logistics and delivery capabilities lag behind.

JD.com has its own e-commerce business, self-built logistics and fast delivery. This is JD.com's advantage. JD.com uses its own advantages to attack its opponent's weaknesses. This move is impressive.

Can Taobao fight back against JD.com in this regard? No, because its advantage is "many", and if it wants to have a wide range of products, it cannot deliver quickly.

Some people say, why don’t I just create an e-commerce platform that is fast, efficient and economical? In fact, customers have various needs and you can’t satisfy them all. Competitors also have their own strengths and you can’t defeat them all.

The word strategy itself contains the connotation of giving up. You must determine which customer interest point is your advantage, and then focus resources to capture this interest point. If you want to spread out in all directions, you will be defeated by multiple competitors on multiple hills.

3. Strategy requires focus, and focus requires abandonment

In 2006, the Jiaduobao Group cut off its black tea and green tea production lines and focused its resources on herbal tea. At that time, the annual sales of black tea and green tea were 40 to 50 million, far exceeding herbal tea.

If we look at it now in 2006, this choice is not wise. Black tea and green tea are selling well, so why cut them off? Why not do it together with the herbal tea business?

Since the black tea and green tea categories have two major brands, Master Kong and Uni-President, which have already formed a top-two pattern, it is impossible for the Jiaduobao Group to achieve anything big in these two categories. However, herbal tea is a category that many giants have ignored. If Jiaduobao focuses on resource operations, it is possible to become the category champion.

In 2006, Jiaduobao was still able to make black tea and green tea because Uni-President and Master Kong had not yet listed it as a competitor, so Jiaduobao had some market space. If this business developed to a certain limit and affected the core interests of Uni-President and Master Kong, Jiaduobao would be squeezed out of the market.

Therefore, considering the future competitive landscape, it is better to give up early and focus resources on expanding the core business.

Drucker said in "Management for Results": Being big does not mean being ahead.

In many industries, the largest company is by no means the most profitable, because it has to maintain a few product lines, market offerings, and general technologies in which it cannot be differentiated, let alone unique. In contrast, the second or even third-ranked companies are usually more advantageous because they are more focused on a market segment, a class of customers, or a technology application in which they are truly leading.

Many companies believe they can (or should) be the best in every aspect of their markets and industries, but they don't realize that this idea is the main obstacle to achieving their goals.

However, if a company wants to achieve economic results, it must have something that is leading and can bring real value to certain types of customers and markets.

It may exist in a narrow but critical aspect of the company's product line; it may exist in a service of the company; it may exist in a distribution link of the company; it may also exist in a certain ability of the company, which can quickly and cost-effectively transform ideas into marketable products. Only leadership can bring profits, otherwise it will only fall into internal friction of homogeneity. You may even pursue absolute leadership and far leadership, and invest unnecessary costs to ensure your advantageous position.

This view should also be the source of General Electric's "number one or number two" strategy.

When Jack Welch took over GE, he consulted with Drucker. Drucker gave him a simple question: If you were an investor, what businesses would you want to buy in GE? At that time, GE had more than 100 business units, most of which were profitable (just like the black tea and green tea businesses of the Jiaduobao Group in 2006). But Welch made a famous decision: every business under GE must become a market leader, "either first or second, or exit the market." Because if it is not one of the best businesses, it will not have a leading advantage and will not have excess profits. Moreover, in the foreseeable future, these businesses will be squeezed out of the market by the best leaders. The reason why they are still profitable now is that competition has not yet developed to the extreme state.

Clausewitz said that the decisive battle at the main location will determine the fate of the secondary location, and all losses will be compensated in the main decisive battle.

To win the big battle, you have to sacrifice other unimportant goals. Positioning consulting firms often give entrepreneurs the same advice: cut non-core businesses.

In 2006, the Jiaduobao Group cut its profitable black tea and green tea businesses; in 2015, Feihe Milk Powder cut its low-end product Feihui with annual sales of 500 million yuan; Great Wall Motors cut its family car business with an investment of 3 billion yuan and focused on economical SUVs; Fotile Electric Appliances cut its mid- and low-end kitchen appliance business and its water heater business with annual sales of 200 million yuan.

The price of Dong'e Ejiao has increased from 70 yuan per kilogram to 3,000 yuan per kilogram. Every price increase means giving up the original market. This is accompanied by the loss of distributors and the reconstruction of the marketing team. This pain must be borne by the decision maker. He must have enough courage to be hated.

In short, strategy means focus, and focus means giving up, which means sacrificing unimportant goals to win the decisive battle. After the decisive battle is won, all losses will be compensated.

For example, after BMW won the battle of "driving pleasure", it can also launch a luxury car similar to Mercedes-Benz with comfortable ride. For example, after Nongfu Spring won the battle of "natural water", it can also launch pure water in green bottles.

But you have to remember that Nongfu Spring does not make excess profits by selling purified water. Its profits come from winning the decisive battle.

Author: Zhang Zhiyu

Source: WeChat public account: "Zhang Zhiyu (ID: zhiyu2307)"