What would it take for your business to survive in the face of adversity?  Let’s take a look at the possible bankruptcy filing by Blockbuster Video and what that has to do with you.

All over the country there are now chains of stores that have a video dispensing machine where a person can rent a DVD for $1.  Then there is Netflix where you can order videos on your computer, and there is Hulu, where you can stream video to your computer. 

Last week it was announced that Blockbuster might push for Chapter 11 bankruptcy protection.  In a filing with US regulators, Blockbuster pointed to “significant liquidity restraints” and a steadily-mounting debt.

This is what they said, according to the Associated Press:  “The increasingly competitive industry conditions under which we operate have negatively impacted our results of operations and cash flows and may continue into the future. These factors raise substantial doubt about our ability to continue as a going concern.”  Blockbuster lost $569 million dollars last year and currently has more than $975 million dollars in debt.

Could the era of video stores be coming to a screeching halt?

How does this apply to you?

Here are my thoughts on what may have happened at Blockbuster headquarters…

Blockbuster saw the rising trends, but they believed they could withstand them.  They added an online arm to their business to try and address the online trend, but their offline business model remained basically the same.  They thought that if they marketed heavily enough they could have the best of both worlds. 

Many of the upper managers were probably also trying to protect their jobs, so the solutions they were coming up with were all limited to solutions that worked along the lines of job protection.  If this was the case, no one could really come up with creative solutions that matched reality…the growing trends.   Their solutions could only be extensions of the old blockbuster model, which didn’t take into account the current technological trends, since those trends did not exist at the time the model was created.

Coming up with solutions to extend the old model in the face of new trends is certain to lead to demise of a company.   If the company is to survive, the model has to be changed to include the new trends, not patched up or added on to.  No amount of marketing will help the company survive unless its model is redone to accommodate the new trends.

How about you?  Is your business model being redone to accommodate the new trends in the business world?  Or are you hoping that with enough marketing, perseverance, and grit you will pull through?  Are you or your employees holding on to the old model because you believe that’s the way to protect your “job”?  Actually holding on to the old model is the guaranteed way to lose your “job”.

If you haven’t done so yet, start taking the trends you observe seriously, and begin to adjust your business model to incorporate those trends.  Unless you do, your business may meet the fate Blockbuster is facing.

Let me know your thoughts about this article and what challenges you may be facing in adjusting your business to make sure it survives and thrives in the face of the rapid changes going on around us.

Technorati Tags: Blockbuster Video, business challenges, business model, trends

“I love a Bad Economy.”

I heard this statement from a very astute entrepreneur whom I respect a lot. When he made this statement I asked him to explain what he meant.

In a simple sentence he said, “Say Goodbye to former competitors.”

A bad economy causes a lot of pain. A lot of people and industries are suffering as never before, and there is nothing positive about that. However, I see a silver lining in the economic slowdown we are experiencing today.

When you get over the worry and fear, you will discover that there are areas of opportunity and growth. In fact there are actually more opportunities than ever before.

In a bad economy, you can surpass your competition. You can win very easily in this economy, if you know how to benefit from bad times.

Others are dropping out of the race and looking backwards. They are terrified, and you are prospering. Not only because you apply the lessons from my Marketing Tip of The Week and from this blog, but because you are seeing opportunities and overlooked markets that they are not seeing.

As a business owner or professional, you should be anything but fearful in a bad economy. In a bad economy, other business owners become paralyzed. They don’t know what to do. They retreat and stagnate.

A small handful of businesses actually become strategic during hard times. By taking on a growth-minded frame of mind, they capture the vast majority of new clients in the market. But even more important, positive thinking companies will capture, “steal” in an ethical manner, 15-20% of the best customers from all of their competitors.

You can have your best years while those around you are facing disaster. You will come out of this down turn stronger, more prosperous, and ready to grow faster than you ever imagined.

What is your biggest challenge in this downturn? And if you have no challenges, why do you think that is? What did you do to eliminate challenges? What’s working for you?

I’d really like to hear from you on this. Getting a discussion going on this topic might be very helpful for all the readers of this blog, so let’s hear from you in the comments below.

And if you would like to get more people in on the discussion, go ahead and tweet this to your twitter list.

Technorati Tags: competitors, dealing with economic downturn, how to deal with bad economy, stealing customers, survive the recession, surviving the recession

Who’s right?  Who’s wrong?

Seth Godin, Chris Anderson, and Malcolm Gladwell are going at it about “FREE”, the book recently written by Chris.

Personally, I side with Chris and Seth, even though Malcolm makes a strong argument for his position. 

I think it’s clear that if you look at the trends of “free”, you can see how it has grown more and more pervasive over time, and people expect free samples or free trials of whatever they are considering buying. 

For instance, whether it says “Free Trials” or not, people expect 100% of their money back if they are not satisfied.  This amounts to a free trial.  “Free” has been woven into the fabric of American society so much that I believe most people see it as an economic birthright.

As such, I believe everything is trending towards free first-time usage. The “free line” (the amount of free things given) will move higher and higher as competition continues to grow and “free” embeds itself even deeper and deeper into the American psyche. 

As more and more companies build “free” into their business models (not just as a marketing cost), it’s going to force other companies to lower their prices or change their models.

Sure “free” has been with us for a while, but it has been slowly evolving and has been slowly changing the game.  Chris Anderson is giving us a status report.  Read it.  You definitely want to know where we are now so you have a better chance to get where you want to go.

If you want to follow the debate, check out Seth’s, Chris’ and Malcolm’s positions.  Chris’ and Malcolm’s debate center around paid versus free journalism; Seth’s expounds on ‘free”:

Seth: http://sethgodin.typepad.com/seths_blog/2009/06/malcolm-is-wrong.html
Chris: http://www.longtail.com/the_long_tail/2009/06/dear-malcolm-why-so-threatened.html
Malcolm: http://www.newyorker.com/arts/critics/books/2009/07/06/090706crbo_books_gladwell?currentPage=all

To get a FREE 25 PAGE EXCERPT from the book, go here:

http://books.google.com/books?id=lLZbXN2odVYC&printsec=frontcover&source=gbs_v2_summary_r&cad=0#v=onepage&q=&f=false

To buy the book, go here:

Technorati Tags: business model, Chris Anderson, Free, Malcolm Gladwell, Seth Godin

When I think of this topic, I’m reminded of the movie “The Fly.”  Have there ever been times when you wished you were a fly on the wall of your competitor’s office or store?  The good news is that you don’t have to be a fly to gather information about what your competitors are up to.

With a small amount of creativity and a willingness to ask questions, you will be able to gather an enormous amount of information about your competitors business and their marketing strategies. 

Here are a few ways you can accomplish this.

1. Don’t be afraid to ask questions.  If a potential customer tells you that they have gotten lower bids or prices from one of your competitors, ask who it was and what there prices were.  If you ask, they may tell you and if you don’t ask you will never know.
2. Ask your competitor’s customers what made them choose your competitor over you and whether they are completely satisfied with how your competitor treats them. If you find out what they don’t like about your competitor, you can use this to your advantage by offering what your competitor doesn’t do for them.
3. Ask your competitors employees for information whenever you have the opportunity to do so.  Visit them often so that they get to know you.  They might be willing to talk about working conditions, new projects in the works, or even about their income and what they are getting paid.  But remember, you must remind your own employees to be careful about what information they divulge about your company to any outsiders. What you are willing to find out about your competitors, they might want to do the same thing.
4. Make it a habit of getting to know your competitors and/or their employees.  You can meet them at trade shows, industry events or even at local business events such as a Chamber of Commerce meeting. The more you are physically out of your business, the more chances you will get to meet your competitors and others within your industry that know them and can help you with information.
5. How about asking your competitors what they are up to.  Be direct.  Approach them.  If they like to brag about their accomplishments or even show off, they may volunteer a lot of information you can capitalize on and use to build and grow your own business.
6. All of you have suppliers that you get products from.  Ask them for information.  The answers to a simple question like, “How’s business this month,” might give you important clues about the direction your competition is going in or if they are having problems.  With this information you can create a marketing strategy to take advantage of the moment and the opportunity. Often times your suppliers will know more useful information about your competition and share it with you.  So always ask.
7. On the Internet, use free sites like www.compete.com, www.spyfu.com and other snoop sites to learn what your competitors’ keywords might be, etc.  There are also snoop sites that charge a subscription fee.  Some of these sites charge up to $300 per month, depending on how much information you want to gather..  You can find more of these sites using keywords like “tracking competition”, "competitive intelligence", etc.

I’d love to know how you might gather intelligence and information on your competitors, so please add them in the comments section of this blog article.

Technorati Tags: competitive intelligence, competitive intelligence research, competitive intelligence strategy, competitive intellligence tactics, getting competitor information, snooping on competitors, tracking competitive activity, tracking competitors