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Asking yourself the question ‘what business am I really in’ is well worth doing periodically – the answer might just help you to discover hidden opportunities or an angle for business development that you otherwise wouldn’t have considered.
Take cinemas as an example.
When I was a child I remember outings to the cinema would often start off with a visit to the shops to buy nibbles and sweets. We’d then walk over to the cinema, buy our tickets and go into the auditorium to watch the film while munching away on the foods we’d bought.
Fast forward to today when a visit to the cinema is a different experience.
What’s happened? Well somewhere along the line cinemas began to look at their business in a different way. They asked themselves this question of what business they are really in, and instead of defining it as the film viewing business, they realised they’re as much in the food and beverage business, as they are in the film business.
When they regarded themselves as being purely about film watching, that was pretty much all you got when you went to the cinema. Perhaps a lady with a tray around her shoulders would sell an ice cream during the interval but that was about it.
Now that cinemas have understood that they’re also in the hospitality industry, every cinema invariably serves up an array of food and drinks for customers to purchase before they go into the cinema. It’s no longer necessary to visit other shops to buy foods before a trip to the cinema.
Indeed, some cinemas, such as the Screen on the Green in Islington, or Kino-Teatr in St Leonards on Sea at Hastings have gone even further. They’ve transformed the experience inside the cinema too. There is a bar area as you enter the auditorium, and instead of the traditional rows of uncomfortable seats, you get roomy armchair type seating and even a little table or holders on the armchairs for your drinks. The experience is more like a bar restaurant.
By enhancing the customer experience inside the cinema, and carefully choosing the food and beverages to serve up, these cinemas have created revenue streams that did not previously exist, and in fact, far exceed the amount they receive from ticket sales.
The classic example that is given when people are talking about this topic of what business are you really in is the railroads. When Ford invented the car, the railroads saw themselves as being in the railway business. So, they didn’t respond or react. Had they perceived themselves as being in the transportation business they might have dealt with the competition that cars presented in different ways. Perhaps they may have purchased some or all the cars Ford had produced and become a major player in the emerging automotive industry.
Clearly, it makes sense to ask yourself the question ‘what business am I really in’. This is the way to ensure you adapt to the changing world and stay relevant to what customers are really wanting when they buy your products and services.
The businesses that best understand the customer and create solutions that the customer wants to buy are the ones that ultimately win.
Failing to understand the customer’s needs and wants in order to respond appropriately might sometimes mean a business is acting like the frog that gets boiled to death when it’s sitting in a pan of cold water that’s gradually heated up. That same frog would have leaped out if you had put it into a pan of boiling water.
In part two of this piece, I’m going to look at what could happen if you fail to pay attention to this question and act like a frog sitting in a pan of water that’s gradually heating up.
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