Innovate or Die

5 August 2009 | by Ryan Battles | Posted in Small Business  

A Little Caesar's pizza just moved in down the street.  They offer $5 pizzas at a moment's notice, just walk in.  This is both the cheapest and quickest pizza available in town.  The taste isn't bad either, not great, but not bad.  Two doors down from Little Caesar's, in the same plaza,  is a family-owned carry-out pizza shop.  They charge $11-$18 per pizza, and business is dropping for them.  People are heading to Little Caesar's instead of stopping by their store.  People are even abandoning their orders when they pull in to the plaza because they can just walk into Little Caesar's instead and save money.  The taste of this family-owned pizza store pizza is good, perhaps even great, but perhaps not enough to justify the extra expense. 

A different family-owned business sells exotic birds and supplies.  In the downturned economy, people aren't purchasing expensive birds at the same rate as they used to.  The store is losing money, and business is not picking up.

What would you do in these situations?  Both store owners have their families' livelihoods at stake, so both take drastic action.  However, only one ends up successful.

The pizza shop has decided to offer on-demand pizza pickup.  They even hired a teen to stand outside the store holding a sign that says "xxxfini's Fresh Pizza Ready Now, Come In".  Ironically, this teen stands right next to another teen with a similar sign that says "Little Caesars: $5 Hot and Ready".  The marketing strategy of the family-owned pizza store was to mimic Little Caesars, but for over twice the price.  Business is still dropping. 

The bird and supply store dreamed up a new idea, creating a "Jungle Room" that can be rented for parties, is dawned with various tropical plants, and the owner's birds will do tricks for the audience during a short show.  Even in a down economy, people still splurge a little on celebrations, so the Jungle Room is a hit.  Business is surviving for this bird shop (http://www.kookshop.com). 

Whether it is new competition, the economony, or a variety of other factors, the landscape of our businesses change constantly.  It is not enough to copy our competition, because the risks are too great that they just might do it better, faster, or cheaper.  Of course, you may be the one offering something that is better, faster, or cheaper, but then it is only a matter of time before someone else comes along to steal that market.  Constant innovation is the only way to stay ahead of the game.