Tag Archives: Strategic management

December 13, 2019 · 4:54 pm

Another One Bites The Dust

You didn’t think that you were going to escape Foodie Friday without a missive from me, did you? This week our story is a little sad (OK, quite sad for those involved) but instructive as well.

You know that I’m a huge fan of sous vide cooking. In fact, I wrote all about those feelings just about 5 years ago after I received my first immersion circulator. To review, you French scholars out there will recognize that the term means “under vacuum.” You place whatever you’re cooking into a plastic bag, extract the air, and seal it. The bag (or bags) is placed in a water bath. The immersion circulator holds the water at a steady temperature which is the desired end temperature of the food.

All those years ago, immersion circulators cost around $1,000 and were not really marketed to the home cook. I remember watching the Top Chef contestants using them but not fully understanding that this was a tool that could be widely marketed to the home market as well if the cost could be brought down.

Enter our subject today. I’ll let TechCrunch take it from here:

Founded in 2012, Nomiku became a plucky Silicon Valley darling by bringing affordable sous vide cooking to home kitchens…The company was able to bring a cost-prohibitive cooking technology down to an affordable price point, only to see the market flooded by competitors.

This is a perfect case study for businesspeople. First, the company was founded to solve a problem the founders had. Importantly, they realized that many others – home cooks who were aware of sous vide but who couldn’t afford a $1,000 kitchen toy – had the same problem. They raised money (on Kickstarter), solved the engineering and production problems, and produced a beautiful product for $300.

Unfortunately, an immersion circulator isn’t really a defensible idea. Sure, you might be able to protect certain elements but as most computer manufacturers found out during the PC boom, there’s kind of a race to the bottom. I actually have two immersion circulators in my home now and neither costs more than $200. The Nomiku is still listed as costing more.

How does Apple manage to market products that cost significantly more than its competitors? Because they differentiate the bulk of their products. The function differently. They’ve got better security. For the most part, an immersion circulator does what it does. Sure, bells and whistles such as Bluetooth and timers can help justify a higher price, but sadly, not in this case.

Could they have foreseen that a lab products company would migrate into making products for cooks? Who knows, but it does remind us that having a great idea and even great execution isn’t necessarily enough. If the idea is great, competitors will be at your door quite soon. You must always be looking at how to stay one step ahead while building up defensibility on your rear. Easier said than done, I know, but the business world is unforgiving as these folks found out.

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December 6, 2019 · 4:54 pm

Pots And Pans

Happy Foodie Friday! Have you recovered from last week’s massive food fest? If you were the host of the festivities, at some point you hauled out some pots and pans. Cookware is the most basic kitchen equipment besides a great chef’s knife (you have one of those, right?) Other than when you’re outdoors cooking on a grill or smoker, you pretty much need a pan or a pot or several of each to get the job done.

This isn’t going to be a “how to equip your kitchen with cookware” screed. The reality is that my favorite sizes and types of cookware may not be at all appropriate for you. I mean, I cook on a gas cooktop which means that I like cookware that can handle high heat and distribute it evenly. You may cook on an induction stove which means your pots and pans need to be a “ferrous” metal – meaning a magnet needs to cling to them to work properly on an induction cooktop or range.

I often will start something on the stove and then move it to the oven. That means I want pans that have handles that can go in the oven without melting as well as pans that won’t warp in the oven heat. In fact, thin, insubstantial pans may be less costly but single-ply cookware does not heat evenly nor does it retain heat well. This means that you are likely to burn things. Thin pans warp easily as well and if you’ve ever tried to maintain a thin layer of oil or butter for sautéing in a warped pan, you know it’s damn near impossible to get it right in that case.

You might insist on everything being non-stick or you might have concerns about the surface leaching into food. You might love ceramic pans while I don’t like how they discolor over time. To each his own, right? But what’s important is that you THINK about what you cook and how you cook before you invest in cookware. Ideally, it’s something you’re only going to do once for each pot or pan you buy.

The same holds true in business. What’s right for my business may be totally wrong for yours and, like a non-ferrous pan on your induction cooktop, might not work at all. You need to do requirements planning with input from all constituencies (all cooks weigh in!). You need to evaluate all the options and costs, while always important, can’t be the primary criterion. I generally buy my stuff at a restaurant supply place that sells to the public – it’s high-quality, will stand up to my home use since it’s made for much heavier use than I give it, and it’s less expensive than the stuff you find in the “consumer” stores. That is a great guideline for anything you’re doing in business as well. Plan, research, evaluate and buy for the long-term. You’d be surprised where the best solutions can be found!

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November 22, 2019 · 4:29 pm

The Grocery Store

The topic for this Foodie Friday is the grocery store. Think for a minute about where you do the bulk of your grocery shopping. Is the merchandise that it carries substantially different from one of its competitors? My guess is that it probably isn’t. All the national brands are there and the same person who stocks the snack or bread aisle at your store might have left a competitor twenty minutes earlier. So why do you go?

We had a Wegman’s open here. The lines to get in were HOURS long. I’ve never shopped at a Wegman’s but those who have proclaimed their undying loyalty. There’s been a rumor floating around my neighborhood (since confirmed!) that a Publix will be opening in the not too distant future. People who’ve missed their sandwiches and service are swooning. In the case of these two stores, they separate themselves from everyone else in very clever ways; Wegman’s via setting themselves up to feel like a European marketplace and Publix via their signature subs.

Some of it is just smart branding. While my local Harris Teeter and Lowe’s Foods both make various types of sausages in-house, Lowe’s brands the entire operation as The Sausage Works and gives each type of sausage a clever name. They even sell “My Sauageworks” tee-shirts (and you can imagine the looks I get when I wear mine in public). They pride themselves as being the Best Of The Wurst and are constantly inventing new flavors such as their newest, The #63 Philly, which they describe as a brotherly love blend of chicken sausage, mozzarella, green peppers, onions, mushrooms, and spices. No commodities here but while both stores sell the same basic sausages, Lowe’s goes the extra mile and can market behind it.

I think may business sectors have become quite commoditized. When I was running a sports site, we would often remind ourselves that people can get a game score or most statistics anywhere. The only way we could compete was to provide something unique, better, and in-demand. I think every business needs to think of itself in terms similar to that, even if you really do have unique aspects baked in. It won’t be long before someone has what you have and maybe is offering it on better terms.

Why do you shop where you shop? If “better prices” is the only answer, that store might have trouble the minute a competitor decides to price match.  It’s much harder to match a better experience or unique merchandise, no matter what business you’re in. Don’t you agree?

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