Choice is good – Make the right ones

I just read another great take on the importance of having a clear strategy and prioritization. (click here to read in a new window).

The author is focusing on the success that Apple has had with focusing on a relatively limited product line. He uses the ‘insanely’ complex product portfolio at Garmin for comparison. Where Apple has only a handful of products in each of a handful of categories, Garmin has made a different choice to create separate products for every sliver they can find.

I don’t agree that there is only one right answer here. The ‘Garmin scenario’ is partly in response to the challenges of the distribution channels and a fast moving, young-ish market for consumer GPS. However, Apple’s successes do show the value that can be achieved by focusing on getting a few things right.

As I mentioned in my previous post (Pick One Thing), I am a believer in the merit of focus. Not that this is easy to do. Personally, I am always tempted to try to ‘cover the bases’ because there is so much opportunity and often insufficient data. However, while opportunity is great, the reality is that resources are finite. Given that, spending the time to pick wisely and focus can yield the kind of success that Apple has seen.

If you look at Apple’s product line, you will find that they have aimed straight for the middle of a couple of segments.

  • iMac => Just give me a good machine to work on. Very few choices, it just works and while having a premium price, it is ‘in the zone’ of expectation.
  • Mac Pro => I need more. Power, flexibility, etc. and I’m willing to pay for it.
  • Mac Mini => Cheapish, simple. I just need a Mac. No flexibility.

Notice that there is no product that is reasonably priced and flexible. They aren’t trying to have a desktop PC where you can pick from this drive or that or this monitor or that and so on. Either you take a sophisticated appliance (iMac) or you are a high end player willing to pay (Mac Pro). Does this leave ‘money on the table’? Maybe. But by being so simple and straightforward, customers who want to play in Mac-land just make the choice between the families instead of being indecisive and looking around to see if someone else might have something just a little bit closer to what they had in mind.

Doing this successfully does require a fair amount of care in deciding what the limited choices should be. I don’t have insight into whether Apple makes these decisions based on substantial quantitative research or just on sensible decisions of subject matter experts. However, if you look at the choices made (when the products are fresh in their lifecycle – long cycles are a whole different conversation), I believe that they really hit the “what you really need” target quite nicely.

Compare this to Garmin’s approach. I’ll take Mr. Burns number that they have 82 products in two of their segments (car and hand held). I think the case that one of the commenters makes about how this is largely to give different channels their special version is probably true. However, it makes purchase decisions a real challenge. They are dependent on a channel that can limit or guide their customers to a decision quickly enough to not look elsewhere.

I consider myself a bit of a GPS geek (I’ve owned 5 so far not counting phones) and I can’t figure out what they are offering. On several occasions I have thought about buying one that I saw written up only to become so frustrated by the options and permutations (at very different price points for slightly different features) that I decided it wasn’t worth it. In fact, I ended up buying a less cutting edge one on clearance instead. Oops. That wasn’t the goal of the marketing campaign was it?

However, the strategy seems to be working despite itself. Last numbers I saw had Garmin clearly leading the pack in market share in the US. They also have heavy saturation in most channels. While this is achieving the goal of winning the ‘slotting’ war on retailers shelves (or pages) but crowding out competitors, one has to wonder for how long and at what cost. Remember ten years ago when the PC companies were all about retail (the last time around) and were getting their clocks cleaned by ‘on demand’ models like Dell? The ‘conventional’ companies had too many choices, couldn’t keep the right ones in stock, etc. As prices came down, they couldn’t compete on cost or in having the ‘right’ choice in stock. Will Garmin face the same problem as the prices keep dropping? Or will the overall market grow fast enough to make each of those 82 products profitable? Time will tell.

Most of us are working with smaller markets with relatively fewer resources to spread around. The real question for us goes back to the headline: Customers want choices. But you have to choose which options you should give them.

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