Borders filed for Chapter 11 bankruptcy protection this week (“Borders Begins a New Chapter…11“). The reasons ranged from price battles with internet retailers like Amazon.com to carrying too much debt. But the real problem was a lack of strategy. Like so many other companies that experience early success and then falter, Borders failed to evolve their strategy over time based on the changing competitive landscape and customer value drivers.
Great strategy requires providing differentiated value to customers. Here’s a comment from someone whose been to both Borders and Barnes and Noble:
“I was thinking back on stores I’d been to and I thought to myself, ‘Was that a Borders or Barnes and Noble?’ There’s an opportunity to have a good experience at both, but they’re not differentiated enough.”
For those of you that have been to both a Borders and Barnes and Noble, the quotation above is a fairly typical observation. What’s not so typical is that it came from George Jones, the former CEO of Borders. If the CEO can’t tell the difference between his store and the competitors, you can bet customers can’t either. Several months after this comment, George and his entire management team were fired.
Is your product or service better than the competition’s? Hopefully, you’re saying to yourself, “Rich, you lovable, laughable fool. That’s the wrong question.” The real question we should be asking is “What is the differentiated value our offering provides to customers?”
Here’s a newsflash: there is no “better.” Better is subjective. Is blueberry pie better than Banana Cream? Depends on whom you ask. We can be like kids on the playground and get into the “my pie’s better than your pie” argument but it solves nothing. However, different is objective. While it’s nearly impossible to convince me it’s better, you can convince me to choose blueberry pie over banana cream because it’s different: it contains blueberries which have antioxidants which makes it a healthier choice and will potentially help me live longer.
What’s the differentiated value you provide to customers? Failure to answer that question can destroy your business. Just ask the folks at Borders.