The sure way to make a significant profit.

monopoly

How many monopolies have you seen that do not make a good profit?

Very few I bet.

On the other hand, how many very sensible, responsible, customer focussed businesses in competitive markets have you seen go to the wall?

Which would you rather be?

Our consumer regulator works to achieve as competitive a market as possible, so it must be good, or at least seen as good, but good for whom?

If you take a broad view of what constitutes a monopoly, a situation where there is domination of a niche, you do not necessarily have to be a massive multinational, or legislated infrastructure supplier to be a monopoly. As a kid, there were several milk bars in the suburb I lived in, one of which had a monopoly on milkshakes sold to schoolkids, and as a result all the other stuff the kids in the area bought. They had a monopoly in a niche, and even as a kid, I knew it was good business.

GoPro went from a idea to a billion dollar company by seeing a niche in the camera market, and going for it. There are two in my household, 2 of my three sons, mad as they are, use GoPro’s to document their lives, and there is even now several years later, no alternative.

Perhaps the most common conversation  I have with my client base is about the need for and means of differentiation. What makes you different? Why should people buy from you?

The ultimate differentiation is to have something that nobody else has, that some people want, and it does not have to be a superior milkshake, or innovative piece of camera technology, it can just as easily be a re-engineered supply chain.

The Dollar Shave Club delivers a product you can get in the local supermarket, difference is the way it is delivered. They have created a monopoly in mail order razors, who would have  thought? Certainly not Gillette.

When you figure out what you can do for a customer that nobody else can do, and that customer is not satisfied with an alternative,  you have what is in effect a monopoly.

Seems to me that the objective of differentiation, and a sure way to make a significant profit is to find a way to create a monopoly.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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2 Responses to The sure way to make a significant profit.

  1. Entwisle Tim says:

    I like the idea of a superior milkshake!

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