Chapter 7 Chapter 6 Standing on a Strong Niche

Let's first explain a concept - niche, according to Philip Kotkin's definition in "Marketing Management", a niche is "to determine certain groups more narrowly", this is a small market, and its needs have not been determined Good service, or "the basis for obtaining benefits" (this kind of favorable market position is called "Niche" in the West, and it is usually translated as "Niche" overseas).After identifying a niche market, enterprises often use more specialized operations to obtain maximum benefits, thus seeking their own way out in the cracks of a strong market.If a company can stand on a solid niche, it will not worry about not being able to make a profit.

The United States "Fortune" magazine and "Forbes" interviewed Bill Gates, who has been the richest man in the world for eleven consecutive years, and asked: "Bill, you are the richest man in the world. How did you become the richest man in the world? Because only you can tell The secret of our becoming the richest man in the world." Bill Gates said: "In fact, the reason why I really became the richest man in the world, apart from knowledge, connections, and Microsoft's good marketing, there is a premise that most people have not discovered. The key is to have a good eye."

If you ask Sun Zhengyi, the richest man in Asia, this question, I believe he will answer this way. When he decided to start a business at the age of 24, he studied 40 industries to find out which industry was the most profitable. Finally, he chose to join the IT (information technology) industry and became the first batch of Internet investors. There is an old Chinese saying: Men are afraid of choosing the wrong career, women are afraid of marrying the wrong man!Times have changed, but the principle still holds true.When we decide to start a business, we must first evaluate the industry and see if it is suitable for us, so as not to enter the wrong line.

Broken Boss Dream Zhao Xin from Changchun City started his own business in 1999 after buying out his seniority at his former unit, the Industrial and Commercial Bank of China.At that time, he saw that the IT industry was good, so he rented a 50-square-meter place in Eurasia Science and Technology City, and became the general agent of Tsinghua Tongfang's MP3, mobile hard disk, U disk and other products in Jilin Province.He thought that he could make money after paying the agency fee, but the manufacturer told him that he had not completed the task in the first month, and told him that he had not completed the task in the second month, and when the manufacturer wanted to withdraw his agency right in the fourth month, he did not Knowing that you can't make money just by selling goods, you must develop channels.So he started to hire salesmen to run the market and prepare for terminal meetings.It cost a lot, but in the end only two dealers were recruited.Before the Spring Festival, due to the lack of a good sales plan, sales in the peak season were low.When Zhao Xin settled at the end of the year, he was surprised to find that he had lost 100,000 yuan, just because he chose an industry that he had never dabbled in, and because he did not understand the market rules and operating strategies of this industry.When Zhao Xin recalled what happened at the beginning of his business, he said helplessly: Although he spent money to buy lessons, it was not worth it. After walking such a long and wronged road, no amount of money can buy it back.

Compared with Zhao Xin, who had suffered a lot in the business, Han Xuyang, who joined the fast food chain, not only lost a lot of money, but was also scarred by being cheated.Han Xuyang from Ningbo made some money in the handicraft wholesale business a few years ago, and has always wanted to invest in the catering industry.Because he knew that he didn't understand this business, he wanted to join the franchise chain, which was less risky. In June 2003, he was attracted by the slogan of "Wantu Suli" - "It only costs 20,000 yuan to join the exquisite fast food restaurant, and it is easy to be the boss".He then called to consult, and the business manager of the other party said: "Joining this project is very promising. The company can provide a series of services ranging from technology, service, planning, to small location selection, employee training, etc." Han Xuyang was accepted by the other business manager. It was tempting to say that, and finally spent 20,000 yuan to sign an agreement to open a franchise store in Hangzhou.Unexpectedly, not long after it opened, it was left in the cold, and it has been losing money.Later, he found many similar franchise stores in Hangzhou, Shanghai and other places, and their business conditions were the same as his.So he proposed to Mr. Zhang of Hangzhou Wantu Suli Co., Ltd. to hold a franchisee meeting every six months or a year, so that everyone can communicate with each other and discuss how to make the brand bigger. Mr. Zhang just smiled lightly. In July 2005, when the scam of "Wantu Suli Franchise Chain" was exposed by the media, Han Xuyang suddenly realized that his "boss dream" had burst like a soap bubble.

Entrepreneurs who fail like them abound.Although the direct reasons for everyone's failure are different, the root cause is often that they chose the wrong industry at the beginning.The reason why choosing the right industry is very important is that most small entrepreneurs do not have enough surplus funds to make a reserve fund, and it is difficult to turn back once they fail.If you choose the right industry, if the product sells well and the profit margin is large, you will pay back your cost and make a profit in a very short time.However, when we lack the vision, way of thinking and aggressive attitude of being a real boss, it is easy for us to choose the wrong industry.

Therefore, entrepreneurs with small investments must be cautious, not to be instigated by the vanity of being a big boss and the mentality of making a lot of money, and make wrong decisions under the control of irrational thinking.In fact, it is not the most terrible thing to get involved in an unfamiliar industry, but blindness and ignorance.When entering any industry, you must fully communicate with people in the industry in advance, understand the operation process of this industry in the most detail, and grasp some of the little-known business intelligence most truly.If conditions permit, it is best to go to work with your peers in person for a period of time. This is also a way to change from an outsider to an insider.Only in this way can we not take the wrong way and spend money wrongly, but take shortcuts to make quick money.

The Boston Matrix Company divides enterprise products into four types: thin dogs, problems, stars, and golden bulls.Taurus refers to products that dominate in the mature market stage and can provide a lot of cash, so they are also called cash cows.According to the Western orthodox financial principles and the teachings of management schools: cash cows are the most precious business, and the strategy that companies should adopt is to harvest. The greatest dream of any entrepreneur is to achieve continuous long-term growth.Using the Boston management matrix to analyze, if an enterprise wants to achieve such a goal, it must have its own cash cow business (excellent business that is providing a large amount of cash support for the enterprise), star business (broad prospects and development potential, but failed to give Enterprises will immediately bring a large amount of cash support) and problematic businesses (businesses with uncertain development prospects, but once recognized by the market, they will have great development potential).

For the companies that have survived, the correct approach is to have cash cow business, star business and problem business at the same time, and strive to turn star business into cash cow business and problem business into star business.If such a business balance can be achieved, the company will continue to have new cash cow businesses, ensuring that the company's cash flow is stable and even continuously expanding in the long run.However, for entrepreneurs, the first thing you have to do is to find the "cash cow" in your own business. Intel on the hunt for a cash cow "Don't be encumbered by history, do something wonderful (don't be fettered by history, let go to create gorgeous)".These are the passionate words of Intel co-founder Noyce.Today, this famous saying has led Intel through a rough and brilliant 40 years.This figure is a miracle even in Silicon Valley, where star companies gather.

Intel's technological development starts with the famous 4004 processor.But in the early days of entrepreneurship, Intel's main development direction was actually semiconductor memory.Before the adoption of semiconductor memory, computers were installed with magnetic core memory. The manufacturing process of this kind of file memory is time-consuming and laborious. The product is bulky and the access speed is also very slow.The development of new memory was an urgent requirement of the industry at that time. Intel jumped at the opportunity to replace magnetic core memory. In 1969, when Intel decided to launch an impact on memory technology, six American companies were already making efforts to do so.These seven companies jointly participated in the bidding for the same project.At the time, semiconductor technology had advanced to the point where more transistors could be packed on a silicon chip, resulting in low cost and high performance, but options for making memory chips were still being explored.In front of Intel, there are three technical paths: silicon gate MOS technology, multi-chip memory module and Schottky bipolar technology. Intel chose to try these three routes at the same time, and finally selected a manufacturing process that can be mass-produced.

Bipolar technology sees results for the first time.At that time, Intel launched its first product, the 3101 bipolar random access memory (RAM), ahead of its competitors, which also took the first step for its future development.The silicon gate MOS technology researched by another group also launched the practical result 1101 static memory in the same year, and Intel successfully entered the memory semiconductor market.Within a few years, Intel introduced two new products: Erasable Programmable Read-Only Memory (EPROM) and Static Memory (SRAM). At the end of the 1970s, high-tech companies such as Ulyson Corporation and Advanced Memory Systems, which competed with Intel, were hard to come by. Intel has two magic weapons, memory technology and silicon gate technology, and has become an absolute synonym for memory technology and the market. . Intel, which created the memory industry, has become the absolute leader in this field.It can be said that Intel is equal to memory, and memory means Intel.No one can imagine an Intel without memory.It can be said that memory is Intel's cash cow. However, when the strategic turning point of the semiconductor industry came in 1985, Intel made a decisive decision: to completely withdraw from the memory business and turn to a completely different microprocessor business.Then came the new positioning of "Intel Microprocessor Corporation."It also presents the famous Moore's Law: microprocessor speed will double every 18 months.The three-year strategic shift helped Intel cross the valley of death and take the express train of the microprocessor, leaving other semiconductor companies far behind. Intel also found a new cash cow. Intel's success lies in the fact that it found its own cash cow in the beginning-memory, and immediately set out to create this industry.But it is not limited to this. With the development of the times, they dare to take the initiative to attack the cash cows and find new cash cows.For example, it withdrew from the memory market created by itself and devoted all its efforts to developing the microprocessor business; when the 386 microprocessor was still in full swing in the market, it replaced the 386 with the 486; when the 486 was still in the harvest stage, it replaced the 486 with the Pentium chip; As soon as it was ready to switch to Pentium chips, it immediately launched the next generation of Pentium chips.It is this excellent decision-making of constantly looking for new cash cows that has created Intel's dominance for nearly 20 years. Why is it so important for entrepreneurs to choose an industry?Specifically, it involves three reasons: The first reason is that the profit margins of different industries are very different. For example, the industry profit margin of the retail industry is only 6% to 8%, while the industry profit margin of the consulting industry is as high as 150%.In other words, the best-performing retailer may not have the same profit margins as the worst-performing consulting firm.The pursuit of profit is the first behavioral attribute of an enterprise.Based on this, companies must choose industries in order to maximize their profits. The second reason is that different industries have different thresholds. Taking the retail industry and the consulting industry as examples, the average registered capital of retail companies is about 10 million yuan, while the average registered capital of consulting companies is about 300,000 yuan. .In addition to capital thresholds, different industries also have different technical thresholds, policy thresholds, and scale thresholds.If an enterprise cannot mobilize sufficient resources to cross these thresholds of the industry, no matter how lucrative the industry is and how promising it is, it will be nothing but a spectacle for the enterprise. The third reason is the issue of business-to-industry controllability.Just because a company has enough resources to enter an industry does not mean that the company can operate well, nor does it mean that it is the best way for the company to control resources.In the case of poor operation, the enterprise may have to pay far more than the average cost of the industry in order to obtain the income of the industry average level.This is obviously uneconomical. How to balance these three factors, find the most suitable industry for investment, and find your own niche is the primary problem that every entrepreneur must face. Find your own niche market John Wall, president of Wall/Goldfinger.The company was founded in 1971 as a rural woodworker in Vermont, making rolltop desks and four-poster beds.Today, his company manufactures furniture for many prestigious companies in the United States. Fortune 500 companies, major financial and insurance companies, nationally recognized law firms, and countless universities are Wall/Goldfinger clients.Over the years, the company has carved out a niche of its own in the manufacture of lecterns, sideboards, reception desks for churches and its specialty - elegant high-tech furniture for company conference rooms. .In 2001, Wall/Goldfinger also received a government award for excellence in the prevention of environmental pollution.Why?Hazardous waste was reduced by 20% because company employees redesigned the company's processing equipment.Also, new ventilators and furnaces were installed that reduce air pollution and lower fuel usage, creating a cleaner environment for employees and producing better products for customers. Have you ever been on a tourist boat where you can see fish and other interesting creatures that live under the water?Many of these semi-submersible boats are built by SubSea Systems in Sacramento, California.When the company's founders, Jim Mayfield, Patrick, and Michael Stafford, decided to build these boats for the tourism industry, they actually took a gamble.However, the creative development was not smooth at all.Although they made the first semi-submersible boat, they mortgaged the house to repay the design cost.But they also face the elusive task of obtaining approval from the US Coast Guard for the ship's design details.This process alone took 18 months.However, all difficulties have passed.Today, SubSea Systems is the largest supplier of this particular vessel in the United States.The company is world-renowned for its quality of craftsmanship, attention to detail and engineering, and these three young creatives have found their niche in the travel industry. Woodworking factories and tourism, both traditional industries in our mind, seem to have no gaps to avoid competition with many competitors.But John Wall and SubSea Systems tell you that's not the case.It is precisely because they are able to choose a small market where competitors have little profit or weak strength or even ignore it as their special service object, and fully satisfy the various actual needs of the market, they have achieved the goal of firmly occupying the market. . In short, what the niche marketer obtains is "high marginal income", while the intensive marketer only obtains "high total income".Niche marketing is very suitable for small and medium-sized enterprises, and its focus is on selecting and establishing a niche market.The main significance of implementing a niche strategy is that companies with a relatively low share in the overall market can achieve high profits by nimbly and skillfully picking up the loopholes.If you start a business with small capital, you must remember that your niche is your only one, so that you can survive and develop faster and better. Entrepreneurs, in the final analysis, are people who pursue dreams and make them come true.How to make your business grow rapidly is a homework that every entrepreneur has to think about every day.Lucky businesses are alike, but troubled businesses each have their own troubles.Successful entrepreneurs are different from lucky upstarts in that "surviving with troubles" is their normal state.How to make the enterprise grow rapidly is impossible to have "a universal solution".In the face of different competitors, if you want to leave them behind, you can only formulate different solutions for specific situations. Become a far-leading industry standard He Zhenan is a native of Wangdu, Hebei Province. He started his business by selling chili in 1988. He established a chili processing factory in 1991. After several expansions, he has grown into the largest chili company in the local area and has become the chili supplier for instant noodle giants such as Master Kong, Uni-President and Hualong. business. There's nothing amazing about his start-up. In 1988, he began to trade chili peppers.After two years of business, he had some savings, so he began to think about how to expand the business, and finally thought of pepper processing.He began to observe the market trend consciously. Only then did he realize that there is so much knowledge in the seemingly ordinary market.It is also in the chili business, and different people do it in very different ways.If you don't use your brain and just do it blindly, you can only gnaw at the bones left by others. At the beginning, he mainly processed chili powder, but soon he discovered that chili powder is also profitable.So, he began to prepare for the processing of chili noodles.He ran around the country and found out that the cheapest machine cost more than 30,000 yuan.This was unbearable for He Zhenan at the time.But he was smart enough to design such a machine by himself. After the trial production of the machine was successful, it used to require 6 people to work, but now it only needs 2 people.Later, he bought a dryer on credit to solve the moisture problem; he designed a dry cleaning machine himself to solve the ash problem; , Excessive magnetic content and other issues. With the advancement of technology, He Zhenan's enterprise began to develop from the original workshop-style production to a preliminary modern enterprise, and workers also began to get rid of manual work.Consciously or unintentionally, he owns the "industry standard" of local chili production, and every technological advancement strengthens his company's local leadership.The chili peppers produced by the company have also begun to gain fame, and gradually changed from popular products to products with a certain brand awareness. For He Zhenan, technology is obviously not the goal.The real effect of technology is to allow He Zhenan to become the rule maker in the chili industry, so that competitors who were originally on the same starting line are in a position of passive adaptation, while he is on the platform built by himself.The third-rate competition is a price war, the second-rate competition is a marketing war, and the first-rate competition is a standard war.Only the standard finally has the magic power to "clear the field" in the market. The rapid growth of He Zhenan's business is largely due to its possession of the "industrial standard" of the chili industry in this seemingly inconspicuous industry.When those partners who started selling peppers with him were only thinking about how to lower the price of pepper farmers, he had already introduced production equipment, got rid of his identity as a pepper seller, and became a producer of pepper products.When those chili product manufacturers only regard technology as a means of improving production efficiency and saving costs, he has begun to realize that the use of machines is by no means limited to increasing production and reducing costs.Otherwise, he would not spend all his money to buy dryers and devote himself to developing a chili dry cleaning machine.With these machines, he took the lead in occupying the "standard" of chili products.It is with this "standard" that his company was able to grow rapidly while the original competitors were eliminated. When He Zhenan looked back at these quietly occurring changes, he realized that running an enterprise is not just about focusing on the enterprise. A regulated ecology—this is the secret of his business leaving competitors behind along the way. Being able to become an industry standard was not formulated by He Zhenan's whim.Customer needs are the source of "standards".He was able to set standards without his peers realizing it, because of his sensitivity to customer needs and his "executive power" to turn these needs into standards.There is no moment when his enterprise soars to the sky, but by learning and responding to business opportunities one after another, and resolving troubles that arise at any time, he leaves his peers behind one by one. Standards have objectively created "legal monopoly" and "take-all".In fact, the possession of standards is the basic strategy for enterprises to grow rapidly, especially in a market where entry barriers are not high and the industry is already at a low level of competition.The reason why many enterprises have become "little old trees" that never grow up is that they are standard slaves rather than masters. Money cannot withstand the loss of time. The same 1 yuan may be worth 0.9 times of today's value in one year, 0.8 times of today's value in two years' time, and only 0.7 times of today's value in three years' time.Therefore, indecision is a taboo in the business world. Entrepreneurs must be good at capturing business opportunities and make up their minds decisively.In fact, the ability to seize business opportunities depends to a large extent on whether the decision-making is decisive.When many people find an opportunity at the same time, you must make a decision before others, so that it is possible to seize it. Many successful people are not very educated, knowledgeable, or even illiterate.But what they have in common is courage and determination.When others are still looking forward and backward, they have bravely jumped down and traveled in the business world. Spot the opportunity and dare to do it Oil magnate Armand Hammer is a person who is good at discovering good opportunities and dares to think and do.When Hammer was 16 years old, he took a fancy to an old two-seater convertible car that was being auctioned, but the price was as high as $185. This figure was astonishing for the impoverished Hammer.Still, he jumped at the chance and bought the car on a loan from his older brother Harry, who sold at the pharmacy, and used it to deliver candy for a store.Two weeks later, Hamer not only paid off his brother's money in full and on time, but also had a car left.Hamer's first deal was nothing compared to what it would later be, but it was a "huge deal" for him at the time, in which Hamer examined his ability to compete and create a way to make money on his own ability. In August 1921, Armand Hammer arrived in Moscow after a long journey.During his investigation in the Soviet Union, Hamer found that this country is vast and rich in resources, but people are hungry. Why not export various mineral products in exchange for food?Hammer directly made a suggestion to Lenin, and soon got a positive answer from Lenin, so Hammer obtained a license to mine asbestos in Siberia, thus becoming the first foreigner to obtain mining rights in the Bolshevik Soviet Union. The barter trade among them also started.Hammer connected more than 30 American companies to do business with the Soviet Union through the American Consolidated Company he later established in Moscow. An accidental discovery gave Hamer the idea of ​​setting up a pencil factory in the Soviet Union.One day he stopped by a stationery store to buy a pencil, but there were only German ones at 26 cents each, and the stock was limited.Hammer knew full well that the same pencils cost only 3 cents in the United States.So he took a pencil to see Krasin, the People's Commissar in charge of industry in the Soviet Union, and said: "Your government has formulated a policy requiring every citizen to be able to read and write, but what if there is no pencil? I want to obtain a license to produce pencils. Krasin complied with his request. Therefore, he hired technicians from Germany with a high salary, introduced machinery and equipment from the Netherlands, and set up a pencil factory in Moscow.By 1926, the pencils he produced not only met the needs of the entire Soviet Union, but also exported to more than a dozen countries including Turkey, the United Kingdom, and China, from which Hammer earned more than one million dollars in profits. Hammer has a pair of eyes that are good at discovering opportunities, and more importantly, he has the courage to act daringly.For every opportunity, he will never let it go, no matter how difficult it is and how many risks there are, he dares to realize it.Because of this, he was so successful and eventually became a world-renowned oil magnate. The common problem of losers is indecision, looking left and right, and having no opinion.Everyone has their own laundry list of opinions to back up their withdrawal.If the will is not firm when making decisions and is always disturbed by others, then no matter what this person does, there will be no good results.We certainly do not deny that when making a decision, you need to listen to the opinions of all parties and collect various information, but what we emphasize is that next, it should be your own work. information to make decisive decisions.Make a move when it's time to make a move, and stop when it's time to stop. This is the essential quality of a successful entrepreneur.