In every industry, there are a variety of factors that influence customer demand. Today, many or most of the customers in the various markets base their choice of product or service on several key factors. In order to compete effectively, your organization is already at least average in these key factors. Therefore, there is a very important implication. The factor that an organization will pick to excel with is often one that is not a key factor today, but has the potential to become a key factor. This is a factor that may be important to less than 10% of your current market, but will be the number one factor to a much greater percentage of the market in the future.
When you analyze the importance of various factors to existing customers, such a factor barely shows up on a chart. Goldratt describes it as a tail on a distribution curve showing the relative importance. However, as Goldratt claims, "where there is a tail, there is usually a dog!"*
For example, surveys conducted in the 1970s on the importance of quality to automobile buyers found that it was in the top ten, but not close to number one for the majority of buyers. The Japanese changed the paradigm by doing an order of magnitude improvement in quality. Another example relates to watches in the 1960s. At that time, quality was an important factor, and many people bought Swiss watches, which had a high quality image. In the 1980s, the factor became features that were associated with electronics and the new digital era. People looked for digital displays, alarms, multiple times, hourly beeps, etc. How many of those watches were made by Swiss companies?
In any given product or service, there are a multitude of factors. These factors can include variables such as speed of delivery, customization (colors, styles, options), speed of service, quality of product, quality of service, variety of products offered/displayed, geographic locations/proximity, cleanliness, speed and depth of the learning curve, packaging, lead time, on-time performance, staff training, etc. Once chosen, the factor becomes the basis for the company becoming the best in the world in its industry.
*See the Bibliography references to the Theory of Constraints Self Paced Learning Program Module 8, Strategy.
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