Yesterday I started reviewing a very interesting fabric supplier – Valley Forge Fabrics. Mikey Dobin, the senior vice president, shared another theme that I have found with so many "outthinkers" that I interview. They all describe a willingness to give up a seemingly attractive opportunity to focus instead on a single-minded, chosen opportunity or niche.
Valley Forge is the world’s largest supplier of decorative fabrics to the hospitality industry in part because it purposely ignores other, seemingly more attractive markets.
On paper, the residential market seems to be a better choice. Consumers are less price-conscious and have less bargaining leverage, so margins should be much higher. Indeed many of Valley Forge’s competitors play in both markets – consumer and hospitality – and change their focus according the market dynamics and demands.
But even when the hospitality industry is down and the consumer market is up, Valley Forge sticks to one battle front. Its mission, culture, organization, and strategy are all synchronized to pursue one goal: provide hospitality companies with beautiful and durable fabrics.
Picking a niche doesn’t mean a company has retreated or surrendered to its competition. Instead, outthinkers see a retreat not as a failure but as a strategic advancement. They see power in the ancient Chinese phrase, "let the plum tree wither in place of the peach." True outthinkers understand the military concept that power is determined by the mass of forces focused on the frontline.
Try applying this innovation to your company by asking yourself the following questions.
- What front can you give up?
- Can you dedicate your company to a niche in order to emerge as the dominate business in that industry?
- If you give up one front, can you win an even greater battle somewhere else?