Saturday, March 24, 2007

Differentiate or Die


Years ago, my company was hired by Kmart to revive their stalled housewares division. We suggested they hire an emerging star named Martha Stewart. No, we didn't charge enough for that idea.

Yet, despite the billions in Martha profits, Kmart filed bankruptcy in 2002. Why? Their brand positioning got stuck in the middle. The middle is quicksand, yet the middle is where so many clients try to go.

Walmart is always low prices. Target is cheap chic. Kmart tried to be as low cost as Walmart and as chic as Target. They were neither. Besides Martha, they had little to offer. And Walmart had computer system investments that makes their supply chain the envy of the world. Most importantly, the consumer can't label you if your stuck in the middle.

Despite the financial ruin that sits in the middle, so many businesses say, "Our solution is to offer X of this competitor and Y of this other competitor. We'll be unstoppable." In actuality, you won't capture the mindshare of either X or Y. And that may leave you RIP. You'll end up as Kmart.

Decide who you really are (cost leader, quality leader, thought leader, service leader) and be that. Avoid the middle. Dante reserves the lowest place in hell for the fence sitters.