Keys to Innovation

A STEP AHEAD

There are countless recent examples of industries and businesses waiting for the tipping point to evolve before formulating and implementing strategic business development initiatives.

Awaiting the tipping point did not accord newsagents any advantage or momentum once Woolworths took control of Caltex Service Stations and Coles did similar with the Shell national network. Both began selling newspapers from their service station centred convenience stores.

Independent liquor stores have been on the back foot for some time following the arrival of the tipping point in which Coles and Woolworths now operate over 50 percent of retail liquor outlets and record greater than 60 percent of national retail liquor sales.

The recent announcement by the Ford Motor Company that the sales of six-cylinder Ford Falcon sedans has continued to decline, that the manufacturer of six-cylinder engines in Australia will soon cease and that greater emphasis will be placed on the sales and importing of the four-cylinder Ford Focus range of vehicles, along with their smaller engines, reflects another case study of an entity waiting the arrival of ‘the tipping point’.

The underlying message is simple and direct: don’t await the arrival of the tipping point, at which time major decisions are inevitable and options are limited. Proactively seek out ways to make your products and services stand out from the crowd.

As with the agricultural sector, every endeavour should be made by all entities to avoid ‘commoditisation’. An inability to differentiate products and services ultimately leads to rampant and widespread price discounting.

And just identifying huge and growing market potential, complemented with world best practice and cutting edge efficiency is no assurance for success.

Care, attention and resources should be allocated to the establishment, operation and maintenance of an integrated, short supply chain. It must necessarily ensure continuity of supply, responsiveness, face-to-face interaction with growers, manufacturers, suppliers, distributors, associates and retailers (in real time) and above all, the capacity to change and innovate.

This should involve collaboration with and the involvement of select strategic alliance partners.

One key essential for market advantage in the increasingly globalised marketplace is a distinctive, recognisable and well-promoted brand name. Inherent in the branding is the need for creative packaging of the products, the services, the company and its people. Good quality products and services are now a prerequisite for market entry, not an imperative for success. Improvements in quality and price competitiveness currently effect enhancements which are marginally incremental, rather then quantum in nature.

The greatest returns from investment at present come from training and education. Moreover, the greatest impact of training is being achieved from studies in the more general disciplines of psychology, sociology, marketing and management.

Developing insights as well as the capacity to investigate and better understand differing markets, cultures, industries and individuals minimises risks, broadens scope, enhances prospects and contributes to achieving greater momentum.

Education develops improved self-confidence, which is a catalyst for individuals to seek greater knowledge, typically beyond the narrow parameters of many professional disciplines, like engineering, accounting, law and agronomy.

A sole focus on productivity, efficiency, costs and quality will often result in seemingly incomprehensible suboptimal performance in sales, profits and market penetration. Output is not sufficient to achieve and sustain success.

Instead I would suggest you need to focus on impact, and that will be best attained from supply chain management, branding, target marketing and a commitment to innovation and education.

* Barry Urquhart is managing director of Marketing Focus, Perth (www.marketingfocus.net.au). A keynote speaker, author and facilitator of management and staff development workshops, he recently delivered the closing address to a major Agribusiness Conference.