May 17, 2005

Management Judo

10:24 am

Peter Drucker identified weaknesses the larger competitor is likely to develop. A "not invented here" attitude is likely to make the competitor slow to take advantage of new ideas or lower cost methods. The "Creamer" concentrates too long on the higher profit, upper end of the market, leaving the door open to enter the market through the lower end. The premium pricier begins to believe their size entitles them to over price the services they provide. Failure to stay in touch is likely to result in the company emphasizing its idea of quality or features ("Wrong Quality"), leaving the customer’s real wants unsatisfied or the product price too high. The "Maximizer" keeps adding features to satisfy added market elements, leaving the door open for the Niche Company that will provide a simpler or lower cost product or service that just addresses the needs of a particular market segment.  These same weaknesses occur in the legal services market place. Understanding them means you can use your larger competitor’s size against them to your advantage. Or, looking inward, you can reduce the occurrence of these weaknesses within your law firm.

1)     Embrace new ideas and technology to gain or keep a competitive advantage. Drucker, also, said the only sound strategy is to be on the leading edge. The problem is, once you put your services and service delivery on the leading edge, the life cycle starts to move you away from that edge; thus the pursuit of excellence requires constant innovation to maintain your edge.
2)     Never forget that higher rates give you only a short-term advantage. In the long run, the market leader is the low cost producer for the services as provided. That doesn’t mean you have to be the cheapest, but if your services have no advantage over a lower priced alternative, eventually, the lower cost provider will overtake you. You must constantly lower price relative to others or enhance value of the service you offer relative to others.
3)     Wrong quality is the biggest danger a market leader faces. Never forget that your quality is determined by the client. Through the client’s eyes it is not what you do, but how you do it that counts.
4)     The Maximizer law firm tries to specialize in so many different practice areas that its' operating cost becomes too high and its expertise too low compared to more narrowly focused law firms.
 
 Management Judo.JPG

 

Related posts

Permalink Print

Filed under Management, Planning by Tom Collins

Page 1 of 0