Small-business owners can learn from using strategies from another industry, but they also need to be aware of the associated pitfalls.
“The risk is in looking only at the surface attributes and not understanding the business economics of a strategy,” said Stewart Thornhill, entrepreneurship professor at the University of Western Ontario’s Richard Ivey School of Business.
About a decade ago, he noted, a company tried to adopt the idea of the colour-use indicator on toothbrushes (which signal when it’s time to replace the product) and transfer that idea to golf balls. The company, Performance Indicator, created a ball that turned grey when it was water-logged and thus useless. When it became water-logged, however, golfers didn’t specifically buy another Performance Indicator ball. “While people were brand loyal with the toothbrush, they weren’t with the golf ball,” Prof. Thornhill said. “In this case, the underlying business economics of the strategy was missed.”
He suggests that business owners consider applying concepts from another industry as more of a defensive strategy. “A lot of businesses get disrupted by strategies from other industries. A cautionary note is ‘Don’t get used to your strategy, because there is always someone out there looking for a better way to do your business.’”
