Strategy rules for one person bands and our ilk

The answer to every strategic question is “it depends”. The trick is knowing what it depends on. If the answer to a question isn’t “it depends” then it’s not a strategic question.

This is Mazzeo’s Law, a business school rule that its author and two fellow professors tested out on independent businesses across the USA in a series of road trips. Their book, The Roadside MBA, aims to provide real world lessons for entrepreneurs, start-ups and small businesses.

Michael Mazzeo, Paul Oyer and Scott Schaeffer write up visits to 45 small businesses to provide lessons across 10 subject areas ranging from hiring staff to battling the big boys. The businesses range from a fitness centre for older women to a company that makes air socks and everything in between.

The book’s strength is that it is a collection of the wisdom of people just like you, running a small business and making a profit.

In Reno, Nevada, they visit Christine Kelly, owner of Sundance Books and Music. How do you compete with Costco and Amazon selling bestsellers so cheap, they asked. She simply avoids competing by reducing her inventory in this previously good area for sales.

“So how do you make it these days?” they asked.

Her answer was to spend time curating her shelves so her shoppers would enjoy browsing to discover books they wanted; by retaining key staff who customers “look to for recommendations from a familiar face”; by organising special events that her customers like; and by publishing books with a regional theme or author.

The lesson: “Understand the Big Boys’ strengths. It is important for small businesses not to waste effort in activities for which large size helps; competing on the same turf is not likely to be a winning strategy.”

The rules may appear homespun but they are useful and there are plenty of them. For example in the chapter on negotiating the authors advise: “It does you no good to create value for customers only to see that value captured by suppliers or partners instead.”

In five short case studies they describe five strategies:

· Knowing your next best options

· Your ability to influence next best options

· Understanding investments and hold ups

· Having better information

· When you can go it alone.

None of the strategies may be right for you. But you will recognise plenty about what is going on when you talk to your suppliers and partners.

Some businesses are designed to be scaled and some are not. The authors visit a coffee shop in Gresham, Oregon that is inspired by its owner Leah McMahon and her ability to work 14 hour days. She went from one shop to four and back again.

In contrast Ron Savelle owns four grills 150 miles apart in Mississippi. After college he set up a bar and paid it off in four months and then opened a second one. He had a simple formula for success that could be easily copied: target a college audience, undercut the national chains, and work to a three page checklist.

You have to understand what successful growth depends on. The Roadside MBA will help you answer all those “it depends” questions that you face. It will also help you understand the final part to the Mazzeo Rule: strategy is never a solved problem.

As an added bonus the five pages on how a wholesaler to convenience stores picks his staff are worth the price of the book. You will look at the world with new eyes.

Three secrets of great merchandising

Look at the ceiling and top wall of this McDonalds restaurant. There is a picture of two good looking healthy people having fun and some bright primary colours. Ask yourself what is the purpose of this picture? In the latest issue of Retail Newsagent in a feature on merchandising, Andrew Knight of RI tells its independent readers that they need to think about using sharp pictures of non-packaged products linked to people consuming goods. Perhaps this has been taken to the next level by the fast food chain - that is selling the feeling of being happy and healthy rather than the products. A second, related tip from the same feature is made by most contributors - it is vital to keep windows clean and clear of clutter. "I believe that less is more," says Roli Ranger, a retailer from Ascot, Berkshire. He has posters for promotions in between the windows that are regularly updated and discreet signs in the windows. Third, a highly visible well-stocked promotion at the entranc

Overcoming a price disadvantage

Planning for his speech at the Independent Achievers Academy last week, Theo Paphitis asked an assistant to buy a basket of six essentials from a Tesco, a Londis (independent operator in a symbol group) and a One Stop (Tesco's CTN/convenience chain). Tesco was cheapest by a big margin. Second came Londis. The most expensive was One Stop. Mr Paphitis understands the power of the supermarkets and he says the way to counter them is to focus on how to make the experience of shopping with you more relevant to shoppers or more enjoyable for them. John Heynan, sales director of Molson Coors, told Retail Newsagent at about the same time that occasional beer buyers will pay 13 per cent more for their beer in an independent convenience store, provided the retailer targets them appropriately. Tesco has carved itself out this 13 per cent head start. Looking at pricing, if Tesco is 100, then Tesco Express is 108, One Stop is 112, a good symbol group is 115 and non-affiliated independents

A sign of retail stress perhaps

It must have been four months since this window was broken in the Tesco Express on Pentonville Road and I simply cannot believe that it has not been fixed. This is the sort of lack of focus that independent shops usually get criticised for. The only purpose in sharing this image is to encourage those independents with high standards who are finding the going tough that they can do better than this.

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