Smart ISVs focus keenly on their business objectives, which are driven by the ultimate vision of the company. They know that their core business lies in identifying a lucrative market segment and tapping the potential of their core capabilities and strengths. They conduct extensive market research to identify a profitable customer segment and work closely to appeal to them. They don’t allow their competitive advantage to get diluted with unnecessary intricacies or diversions. In fact, they diversify and expand their business strategy only after having strengthened their core business. Take the example of Apple long before they ever branched out to developing iPhones, they had mastered personal computers with an unconventional focus on design, which was their core competitive advantage. Successful software companies ensure that every team member, starting from product developers to managerial executives understand the company focus in and out.
Here’s an illustration: You have lost your ID card at office premises. How would you begin your search attempt? You would narrow down what floor or what room you may have lost the ID card in to increase your chances of finding the ID card exponentially. The same applies to laser focus strategy. Successful businesses know that weeding through a greater surface area only takes up time, effort and pricey resources without yielding any tangible results. Whereas, large companies attempt to branch out into multiple industries and market segments, small and mid-size companies with limited resources beat them out by implementing a closely focused business strategy. The Morgan Motor Company, a family-owned British motor car manufacturer is a great example of a real life application of ‘David beating Goliath’.
Morgan cars are famous for their unique focus on quality and craftsmanship, which has enabled them to compete with the likes of Jaguar and Aston Martin, despite being smaller in size and independently owned. Their persistent adherence to maintaining the car’s qualities, standards and unique appeal has enabled them to remain competitive over all these years and also paved their path for the near future.
An effective business strategy is to identify a core problem that the customer has based on comprehensive market research and then develop a framework for a solution that will help alleviate these pain points. Having laser focus on their key strategy enables quick decision making and alignment of IT and business processes with business objectives. In order to assess priorities, successful businesses ask themselves the following questions:
- What customer pain points am I addressing?
- Are my resources (human capital, administration, and infrastructure) assigned and prioritized effectively?
- Are my activities and processes aligned with my business objectives and company vision?
- Is my business and current roadmap focused very closely on my competitive advantage and meeting the needs of my target market segment?
- Am I giving my customers what they want the most?
- Am I constantly updating or removing product features to keep it relevant to my target market segment?
Successful businesses also realize that their expertise and resources may be limited in certain areas. The leading software companies have been those that aren’t afraid to partner or collaborate to get the best results in non-core competency areas while continuing to invest their time and effort strengthening their core capabilities.