Squirrel Marketing Episode 9 – Harley Davidson vs Honda…Turf Wars

Join marketing guru William “Bill” Bronson and successful sports podcaster Jeffrey Cooperstein as they dive deep into the world of marketing and chase squirrels in all directions.

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all right welcome to squirrel marketing podcast this is bill bronson marketing guru and i’ve got jeffrey the coopster cooperstein the koopster i added that uh sports podcast legend and we’re coming to you live here from empower brokerage yes it is uh insurance health insurance life insurance annuities brokerage and the cool thing about empower brokerage is that they can search the country for the best prices and they’re not tied to one carrier so it’s pretty cool yeah yeah empowerbrokerage.com if you want to check them out get a quote um our fine work see the fine work yeah a lot of a lot of hard-working people here so but uh today we’re gonna talk about harley-davidson and i was thinking jeffrey we would start doing some maybe case studies about different companies and take a look at history take a look at what’s happened yeah so that we can learn from it yeah exactly and you know with with big companies like harley and uh you know there there are so many different case studies that we can we can look at to to try to learn from and and try to take things from and implement that into into our strategy into your strategy so uh no it’ll it’ll definitely be fun i’m not a huge motorcycle guy but i know harley is one of the most recognizable brands in the world so yeah absolutely it’s got a rich history and we’ll talk about some of that’s very interesting and then one of the things that we’ll do after a while i’m not sure if we’ll do it next or we’ll do it after a few different companies but we’ll take a look at something called and you can google this before you listen to the podcast but it’s called porters five forces that shape strategy so porter’s five competitive forces that shape strategy so what we’ll do is we’ll take a look at these company case studies we’ll talk about them and then and then we’ll take that and make sense of it along the way as well as afterwards we’ll really dig deep into porter’s five forces uh theory and and how you can take uh your company or your endeavor and really create a good competitive strategy so you can move forward and and compete so all right let’s dig into it so harley-davidson little history um most of you know harley-davidson is an american icon um cool fact is uh they’re one of two companies one of two american motorcycle companies that survived the great depression interesting didn’t know that and uh oddly enough um both these companies kind of started in the same area so milwaukee and um it’s indian and harley and when do you think harley davidson started business when do you think they made the first made their first murder i know it was early it had what around 1910 close yeah you’re close 1901 is when uh a 20 year old named william harley and his childhood friend named arthur davidson uh they didn’t spend their time video gaming because they didn’t have any video games yeah they didn’t have those back then they spent their time in the garage making stuff and in fact one of them worked at a machine shop and uh i guess in milwaukee that was a big thing uh steel industrial yeah foundry and a tool and dye company and these kinds of things a lot of steel working going on a lot of factory stuff but man just the innovative thought these guys um there were a lot of hills i guess in milwaukee and or are but i guess the hills prompted them to get sick of walking up and down the hills and and sick of riding their bikes up and down the hills it’s a lot of work and they came up with the idea that maybe they would uh put a motor on on the bicycle or something you know and so william harley started tinkering around with designs for a small engine to power his bicycle and that’s why one of the first motorcycles looks like a bicycle with an engine on it i mean it’s just it looks very similar to one of those uh old ones well the nostalgic what do they call them the flyer or the the beachcomber looking about motorcycle the bicycle and um here’s another little cool little tidbit i mean i was reading about this and just everything started coming together for me because i don’t know if you’ve been around boats but have you ever heard of an evinrude motor no i’m not i’m not familiar with boats motorcycles any of these machinery because you’re a video gamer i’m a video gamer yeah i’m a sports guy you know that yeah i know the sports cat podcast sports podcast legend okay so no evinrude is um is a notable boat motor manufacturer i mean they make uh outboard motors and um i don’t know about the rest of it i didn’t do any investigation on evinrude but basically it’s a notable very well made motor and so uh olay evinrude was building engines for cars at the time in the early 1900s and uh and helped william harley design his motor for his motorized bicycle huh and so between uh william harley and arthur davidson and olay evinrude they produced this prototype motorcycle and entered it at a state fair race there in milwaukee and they placed fourth i guess this was in i don’t know 1904 ish somewhere around there so you never you never hear about the third guy behind the scenes it’s always harley and davidson but you never hear about about the third guy well there’s more to it though uh he just sort of helped out in the beginning um but he didn’t really stick with with the endeavor clearly yeah he did his thing um but the there’s two other davidsons uh involved and um i guess one was maybe a brother and one might it may have been a dad um but uh so there was a couple of different davidsons um anyway in 1905 so a couple of years later they sold three of the five motorcycles that they made in that shed in their backyard in fact they took that shed and it’s now they moved it to the factory oh it’s a nostalgic you know that’s awesome thing and they probably set up the tools and the old the old first motorcycle and all that in it uh it’d be it’d be really interesting to go to uh the harley-davidson museum there exactly in milwaukee yeah at their factory first factory now how do you think they decided whose name goes first on the brand um i think it was harley’s idea okay and then he designed the motor gotcha yeah that’ll do it because usually when you’re when you’re thinking of that kind of thing i would think alphabetical order but if you would say davidson harley that just doesn’t flow off the tongue like harley davidson does well yeah i mean uh phonetically it doesn’t yeah you’re right but no i think it was harley’s idea and he sort of brought his friend in on it and uh and i think harley was the driving force on a lot of it even though there were like three davidsons involved yeah that’s interesting um but so anyway they sold three out of the five and then in 1906 the year after they built a factory i guess the parents got sick of them using the garage and they sold 50 motorcycles so they went from three to fifty and then the year after that the year william harley graduated from college so he did all this while in college studying mechanical engineering so then he graduates college builds a factory and produces 150 motorcycles in 1907. wow yeah was that’s a lot i don’t think he had a girlfriend or partied or did much anything slept or eight or yeah that’s insane and that i mean that is that reminds me i was talking my son and you know i’ve been trying to over the years help him find some passion something he’s just really itching to get up in the morning for something he just looks forward to kind of like me in this podcast i really enjoy this but so it reminds me of that and he’s about the same age and i was thinking geez i mean if he could just find something like this to sink his teeth into and i think he’s close i think i think he’s close he really loves cars that’s awesome um and uh and so i was talking to him about interstate batteries and maybe working for that company and getting involved with their uh nascar team and yeah all that stuff but anyway that was a little squirrel um that’s why it’s called squirrel marketing i i guess so consequently i actually i looked i was gonna buy the website and i looked and there there’s an actual a company called squirrel marketing we’re not affiliated with them but anyway um so a little history that’s it’s a really interesting beginning um but what made harley harley what made the company successful from that you know um so the the thing i think one of the main appeals of harley is american made and i think a lot of people nowadays treasure american-made products and goods that you can find here in the states and because harley is that brand they’re basically they’re they’re an extension of america they’re a symbol of american freedom essentially and so i think that’s rare right now at least that’s where they’re really successful yeah actually um the the the fact that they are a piece of americana or american culture that really helps out in a couple of ways we’ll talk about in a minute um but the way they became that is interesting so uh fast forward a little bit to 1914 harley was dominating racing they got involved with racing they just loved the sport they they’re just gearheads they just love tuning the bikes and running the races and and um so in 1914 they made 16 000 bikes that year and that’s not i mean it’s nothing compared to now right that i’ll be making that a day but world war one was coming on and world war one is kind of the catalyst to harley’s immense growth i mean they just because the war effort the government bought 20 000 motorcycles from harley davidson for transporting between bases or whatever you know but on the battlefield so the military used motorcycles too the military really kicked this thing off because now you have these um veterans coming back from war uh really enthralled by this experience on a motorcycle and then they want to buy one too and so um so it was kind of involved and this was before vietnam when war wasn’t cool so you really kind of um idolized these guys who would sacrifice their lives to go off and fight for right for our country and so uh whether you agree with why we’re there or not these guys are still heroes yeah absolutely and and even in vietnam and even today um they’re heroes for their self-sacrifice no question but so that was sort of the start of it and then in uh world war ii they supplied like a hundred thousand motorcycles to the war effort to allies and to uh to our troops and by then they had those nice big ones you know the bigger more powerful motorcycles and they were winning races like crazy and um but in 1920 uh i got ahead of myself by 1920 though they were the biggest motorcycle manufacturer in the world period which was kind of launched by us here in america i mean we we um at least we made it cool now i would hope that since they invented the product that they would be the number one seller i’m just i’m just thinking well there were other people there was some there was some stuff going on in germany there was some stuff going on in japan and and uh and so there was a lot of innovation going on um simultaneously around the world with airplanes and motorcycles and all these kinds of things but um but we kind of we kind of made it a thing and um hardly dominated it then so in world war ii 100 000 motorcycles and then um again in the korean war so a lot of war effort stuff um it was really cool in hollywood absolutely so like so you had james dean on his motorcycle you had it all every everybody cools on a motorcycle you had uh peter fonda um and uh and these guys doing movies um about a motorcycle gang and all that now i i would never before you would you had said it i would have never associated motorcycle with the military when i when i think military vehicle i think big armored hummer tank you know i i don’t think small you know compactable vehicle that you know is unprotected essentially well have you ever seen indiana jones movies a long time ago so you remember the germans on their motorcycles with the little side cars yeah yeah yeah so they would shuttle their like like little cabs they would shuttle uh they would take an uber if you will back in 1920 an uber cycle so they would they would shuttle officers in the little side cars so they had a guy that would that would pick up an officer and rush him to the next base yeah or or there was other ones a little hot shot uh without a side car and they would take messages from one place to another i mean and and they were flying yeah so it was a quick way to get messages to places that didn’t have any kind of communication devices and you didn’t have cell phones back then so yes so but they did have the hard wired communication you just couldn’t do that 20 miles away right uh so you were i guess uh doing the the morse code or whatever um or taking taking documents on motorcycles that’s interesting you know from the general to the front lines or whatever so it was really useful however um not sure why this happened but in 1969 the year i was born they were bought harley-davidson was bought by american machine and foundry and they just about killed the company they came in with their new ideas about slashing wages and workforce and efficiencies and sounds all too familiar um yeah restaurants tend to do it you know you’ll have a great restaurant and then somebody will buy it and then they’ll do like portion control to the point where it’s so tiny and it’s horrible for people that you know used to like it um so harley man they were stripped down slashed the workforce they uh they cut corners on the uh the building line that the procedures they raised the prices as as well they were just trying to really strip mine this this deal yeah and take advantage of its status as being you know cool uh they almost went bankrupt and um in fact the the bikes had such a bad connotation in the market that they had nicknames like hardly drivable oh gosh that’s cringe hogley ferguson and uh so the hot the hog name which started out as a cool thing um there was a group of guys they called themselves the hog guys or something and later on hogg stood for the harley owners group but back then it was pejorative i mean it was uh it was a negative slur they call them a hog you know like it’s just gonna leak all over the place and um it’s even even to the point where when i was a kid probably in the early 80s um i remember thinking i i want a honda over at harley because i don’t want to work on it all the time i don’t want it leaking all over the driveway yeah and my dad even said and he had harley’s he loved them his dad bought him his first one in college and and uh loved harley’s but um he never said anything about it he never dispelled my my thoughts on it because maybe his did leak i don’t know so sin when they had that bad reputation what improved it what got them back to where they are now well what improved them is the exact same thing we’re talking about that we haven’t discussed yet which is the competitive part between harley and honda so so honda we’ll just jump over honda came in in the 50s and they had a little 50cc motorcycle i don’t know if you’ve ever seen the uh uh the wheeling elvi these uh people they dress up like elvis and they yeah and they ride these these little 50 cc motorcycles well a good friend of mine is one of the flying or wheeling elvi uh his name is drew he’s he’s uh he’s super cool but um you know harley made a comment back then in the 50s that they didn’t have to worry about honda because nobody’s going to buy that little thing and yeah so um they they thought they were beyond competition they were above it they were past it now which is a bad thing to get to if you if you get too confident in your industry and you think that you can’t be taken out you’re wrong yeah complacency is never good for sure so honda came in and um they started making a little bit bigger motorcycles by then in the 60s and um late 60s early 70s they had a more than a 50 i think they may have had like a 125 or or uh i’m not sure but they didn’t have any big ones at the time so for us they had a cafe racer style you know they had the for us ignorant people explain what the ccs mean it’s just the size of the motor uh for instance cubic inches gotcha uh 50ccs without looking it up i don’t know what does it mean cubic centimeters something like that okay um gotcha but um so 50cc is a small motor um 600 cc’s is a bigger motor thousand cc’s it’s a big old motor um the the police cruisers probably have a thousand cc or bigger motors so they can fly they fly yeah so the little 50cc it’s like a little mini bike gotcha um and when i was in high school my dad took me up to colorado and we rode motorcycles on the logging trails up in the mountains oh awesome and uh i had a one i had a 150 and he had a 125 hondas both of them something like that and and they were they were cool um small enough to maneuver but powerful enough to get up the hill and uh these were dirt bikes but so yeah so um here’s how honda here’s how harley fixed their problem first of all the company american machine and foundry started to realize what they were doing wrong they were like oh they’re like oh we’re really kind of screwing up here i mean their prices were their their sales were tanking um and so they sent their executives to tour the honda factory what are these guys doing that we’re not doing what is why is everybody saying that they want a uh a honda because the quality is amazing and they don’t want our motorcycles well that’s easy to see so they went and visited honda they talked to them and and honda and the japanese were very accommodating they um they helped him out they gave him advice they showed him things that they could do to improve now why would honda do that i think it’s an honor thing i think it’s an old traditional honor thing where um they were just gracious they were uh competitive but at the same time it’s for the good of the art for the good of the industry um they they helped them out because you know like in other industries let’s say for instance tech apple ain’t helping samsung or giving them any trade secrets probably not you know probably not so that that’s that’s a rare thing yeah but back then maybe not so much i mean you know you would find uh people helping each other and and they were competitors and um so then they would work together on something and then afterwards they would go back to being competitors just like people used to be able to get in the fist fight and not hold a grudge yeah or debate and then still be friends yeah that used to be a thing it used to be a thing it’s still a thing with me and my friends but for a lot of people um it’s uh it’s more narcissistic than it used to be and i think back then it was a lot more about helping each other you know and uh there was still cutthroat and there were still jerks out there i mean but uh the honda people were gracious and typically the japanese are they seem to be yeah anyway we’re not talking about the generals and stuff but we’re talking about regular people um i remember i took judo as a kid and the judo instructor super gracious super generous patient really kind person and and i think that a lot of the japanese are like that but anyway so they brought that stuff back they brought their um their tolerance um there’s a certain tolerance when you do manufacturing and it’s uh it has to do with uh the thousandth of an inch or whatever so they tighten their tolerances and an interesting thing happened harley started to give the people on their line on their production line more ownership of their job so they gave them incentives on quality and it was really interesting what happened because they they took more ownership of it they took more pride in it um they they had uh their production stamp they were pride they were proud of their production stamp and um so they were proud that this motorcycle came from them yeah well they started to institute that as a thing as part of the company culture and their quality went up and um i think that’s that’s a lesson that could be learned from you know for any company is is rewarding people for good work well this is a common thread when we talk about these other companies because some of the most innovative companies that we’re going to talk about began to treat their workforce with more respect more rewards stock ownership in the company or a share of profit you’re usually going to get more out of your workforce when you’re doing those kind of things yeah you share it you should if you if you’re going to share in the harvest with your workforce uh as a bonus structure or whatever and it’s transparent where you can see here’s where if we do really well as a group we’re all going to make more for christmas or whatever something it’s always beneficial for that but but so harley they really came back and they came they came back uh with a vengeance they um before the american machine and foundry sold the company uh they produced something called the liberty edition in 1977 which was uh sort of an american um it was a tribute and so their 1977 model was really a big big seller and but then they tried to follow it up with a confederate edition with all the confederate colors and flag and all that stuff it was pretty controversial even back then in the in the 70s late 70s but anyway so early 80s it was bought by some investors and they really these were these were harley lovers these these guys who bought it they just loved the brand and they’re the ones who created the harley owners group um and they were they started these rallies and and now you find these these motorcycle rallies with 100 000 people yeah you they’re crazy big it’s huge and in fact what we’re going to talk about here in just a second uh it’s it’s that’s what got harley through the problem with honda so early on honda helped him fix their quality problem but honda kept kept going and kept learning from harley how to appeal to more american buyers yeah so it really was a mutually beneficial relationship yeah absolutely but um but so honda started making bigger and bigger motorcycles great quality you know they started making them uh they looked the part they made like i mentioned the cafe racer uh they entered the the races and uh they were really starting to be a major competitor and they started coming into the bigger motorcycle industry um that segment of the market and harley had a big problem with it and um you know it’s funny how you underestimate your competitor and then they come around and bite you yep but it’s all friendly competition really there was no underhandedness about it they they were just competing with the best they could offer and i guess like i said earlier that’s a virtue that just doesn’t really exist very often in the business world no not at all i mean it’s uh there’s a lot of cutthroat stuff going on um but so what happened with harley that we’re talking about now is that really the quality problems really hurt them you know and they continue to have some some quality issues but what’s funny is they came out the other side because of not only their uh how they treated their employees and how the employees had some ownership going on uh of their of their position they had some some skin in the game there but also the harley owners group carried with it uh some revenue so you had the the harley gear and you had the membership and you had these other things that really kind of helped stabilize the the problem that harley had in their revenue so one thing i kind of wanted to get into was harley is now bigger than just a motorcycle brand harley is like a fashion statement it’s a t-shirt brand i think at one point they had restaurants you could even go into and eat at i mean harley became this this entire corporation this entire brand that is you know synonymous with america yeah absolutely um and really the only reason why they had a big problem and i guess this was um i don’t have the timeline on it but it was it was the 80s it was in the 80s um and so they failed to keep looking inward right remember when we talked about the swot analysis the strengths weaknesses opportunities and threats um that’s not something you do once when you’re forming your company that’s something you do all the time and at least once a year well yeah um but harley didn’t do it at all i mean they they it completely ignored their weaknesses and their threats and they actually felt like a lot of people a lot of company owners that if you just focus on your strengths and your opportunities you don’t have to worry about your weaknesses and your threats and that’s short-sighted there’s people who actually think that but if you look at your weaknesses you can work on them and turn them into strengths yeah if you look at your threats you can mitigate the issue prevent them from being a threat and find something involved in it that becomes an opportunity so you’re always trying to take your weaknesses and turn them into strengths and you’re always trying to take your threats and turn them into opportunities and so without looking at or or analyzing their weaknesses so they had a weakness of of quality and and they learned a little bit from it and and they started to help fix that but they had a threat which was honda and they completely looked the other way they were like okay these guys are in there in here um nobody’s gonna buy that stupid little motorcycle well they weren’t stupid little motorcycles forever turned out that yeah they started making bigger ones and bigger ones and nicer ones and the the more appealing designs and all of it and still had the quality right and probably uh without the tariffs and everything cheaper uh and eventually they were cheaper uh there was a there was a problem with tariffs and everything but but really harley started to uh become sort of a celebrity and i remember when you couldn’t really afford one i mean back when my dad had one you could and they were reasonably priced but then in the late 60s early 70s into the 80s they got kind of expensive it was like a rich person’s toy so it sounds like they went through this period of great prosperity and then when they were bought out it sort of went downhill from there and now in the in you know the last 20 years or so it feels like they’ve kind of reverted back to what they were when they first started well it seems like they’ve got some really smart people at the helm now and and um and they realized that we’re an ever-changing uh world um and in fact they um this started i guess it was in the late 80s or so but i wanted to talk about this piece where harley when honda started to really compete with them harley started looking at sending their motorcycles to asia you know to to china and trying to compete in that market and so they spent a lot of money on it and this was one of the problems that i’m talking about with them financially not only did they have a problem with honda being a major competitor and they didn’t plan it for it but they also decided to sort of attack back and try to break into the chinese market the only problem is they didn’t do their research very well first of all the chinese didn’t want the big motorcycles they were too heavy going to this monument and they needed to be maneuverable for the roads and the thing that for the for the job the job didn’t require a big honking motorcycle right um but also they had no idea the chinese government required the destruction of motorcycles after 11 years so yes the destruction right of motorcycles yeah there there’s no classics in china you don’t have a classic car you don’t have a classic crazy they destroy and recycle and so therefore they don’t have any junkers or whatever but they also don’t have any nostalgic pieces yeah that’s that’s that’s 11 years motorcycles destroyed crushed whatever and so harley had no idea and so uh they had to make lighter smaller cheaper motorcycles for that market because people weren’t going to spend a whole lot of money knowing that first of all uh they may be a long way from a shop to fix it right so the quality has to be there but it has to be small enough to maneuver and uh it won’t crush somebody’s leg but then cheap enough that within 11 years they got their usefulness out of it and it wasn’t so much more expensive than the ones they normally bought that it made sense well they spent a lot of money on that endeavor and so without the research right um but but now they’ve they’re back you know they’re back because uh like i said they have smart people at the helm and they planned ahead for the fact that there’s always change going on they probably do an ongoing analysis internally now and they look at the market they look at where we’re headed um they look at the fact that a lot of people don’t have tons of money to buy a motorcycle so they make it more affordable maybe some financing plans that are cheap you know maybe some cheap interest financing yeah that kind of thing so i think they’ve come full circle and now they are an american motorcycle legend that’s a great american story of how even you start a business and it’s successful and then it goes through a dip there’s always going to be peaks and valleys but if you get the right people in charge and you do the right things there’s no reason why you can’t be successful there’s no reason why you can’t be successful if if you have the right model you have the right product your products not obsolete you always got to look and make sure that you’re not in the vhs business you’re not you’re not you’re not renting videos tonight you’re not rolling well behind the time exactly um but then competitive analysis look at your competitors look at what people like do a survey give some stuff away and get feedback all this stuff matters and if you’re in the service industry find out what people like find out what find out from your clients what they liked best about working with you um and if you take a look at your weaknesses through either surveys or people who will be honest with you about your presentation maybe maybe you were a little short and abrasive maybe whatever maybe they don’t like your beard i don’t know whatever you got yeah you got to look at what people like and don’t like about you or your service and you got to look at your competitors and see how they’re doing it but that’s all the time we’ve got so that was a good one yeah harley so next time we’re going to talk about uh either apple versus samsung nokia motorola etc or we’re going to talk about fujitsu who many of you probably don’t have a clue why or how they’re a powerhouse in the industry right now sounds good to me alright till next time see ya you

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Squirrel Marketing Episode 4 – Strategic Planning

Join marketing guru William “Bill” Bronson and successful sports podcaster Jeffrey Cooperstein as they dive deep into the world of marketing and chase squirrels in all directions.

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https://www.youtube.com/channel/UCPkNjVRe5aD-JZwE6Beh8UA

Squirrel Marketing Podcast Page

https://squirrelmarketing.buzzsprout.com/

All right, this is Bill Bronson and my trusty sidekick, Jeffrey Cooperstein. Hello. And this is squirrel marketing. Well, um, so today, you know, I was listening to our last three episodes and I wanted to say I didn’t listen to them initially, I was too apprehensive. Yeah, like, I don’t want to listen to myself. Well, I really enjoyed listening because in order to prepare for this one, I listened to the last one. Yeah. So we could kind of help those who might listen in succession. We’re going on some kind of track. Yeah, exactly. Or at least some kind of thought process. There’s some squirrels in between like you know, the haunted house, but Oh, squirrel. Todd James, a good friend of mine who owns the Cutting Edge Haunted House on Lancaster in Fort Worth, bought this place way out in Terrell, TX called Thrillvania or something. It’s past Dallas to the east. Yeah, terrible I should know this. And anyway, so he bought that. And that is a traditional haunted park with three houses on like 50 acres, super nice like everything Todd does. And they have the woods and all that. So all traditional, but cutting edge is like a nightclub.

Anyway, so I was listening to our other pod and it was talking about action planning and remember the acronym smart? Yeah. Specific, measurable, actionable, reasonable, and time-bound.

Anyway. So I started thinking about the next little piece of an action plan, which is strategic planning.

So strategic planning is part of the action plan. And it’s kind of where you think more strategically about your role in this whole thing called business. What’s your role? What are you going to offer?

What is the businesses role in what they want to offer the world. And this is something that that I was going to talk about anyway, which is competitive advantage. So when talking about strategic planning, you also need to consider your competitive advantage. And for instance Walmart, okay. When Walmart got involved, there were already some things going on. For instance, Kmart, and Sears. And Walmart, didn’t want to really compete with them. So they’re, first of all, their strategy their strategic planning, gave them the idea to focus on small town America, so they would only focus on towns with under 5000 people.

And because Sam Walton was a tightwad, so much so that his executives when they came in town,

would stay two or more to a room and stay at budget motels. And they had to drive places he wouldn’t fly them around. really. So even regional managers I guess, up until the kids took over, the regional managers wouldn’t fly. They would have to drive to the stores to look at the stores. He would fly over

in his little plane or whatever. And look at the parking lot and see how full it was and check to see if the managers were there. Yeah and on the ground he didn’t even have a freakin driver. He would drive his old pickup, and just go to the stores and look at the parking lots and see if they were full or not. And, you know, that’s crazy, very frugal. And that’s how he was able to make it. That carried over into every aspect of Walmart. Every aspect was cheap. Everything was done as if he didn’t have a dime to his name. And it was a shoestring budget. He spent money but was very frugal.

And now a couple things with that. First of all, he was able to make it successful in markets with under 5000 people, which gave them a foothold and allow them to grow. Not large but solid. So they didn’t grow very fast like that. But they established a name recognition and in rural America, arguably is America, because that’s the backbone. Those are the people who grow and farm what you eat and, you know, they fix the cars that you drive and they build the trucks that deliver the food. So I mean, it’s really the backbone. So anyway, Walmart gained a foothold.

And there, they had two things. One was they could make it in a market that was smaller than the other guys could make it in. Because I think Kmart, their minimum requirement to go into an area was 25,000 or something.

Actually, this will squirrel a little but Sam Walton’s wife would refuse to live in a town with more than five or 10,000 people. She wouldn’t live in a big town, so he had to focus on small ones because she refused to live in the big ones.

But that but the thing with Walmart, too, is like, yeah, it’s a great place, you can get every single thing you would ever need at Walmart. But it destroyed small businesses.

Yeah, yeah. Well, you’re right. And the department store was the beginning of that.

Because before then, it was a clothing store. It was a sporting goods store. It was a grocery store. And now they’re mixing it all together. And you can’t count on anything. And it’s, that’s the same thing I don’t like about trying to integrate everything.

Like neighborhoods. Why are you going to forcibly put one group of people in a neighborhood that was created without them? Yeah.

For instance, I don’t know like little China or whatever, or a little Mexico or all these places where the town is the culture, these people came from a country. And they recreated their country here as a little miniature pocket. And it should be celebrated. You should be able to go there and experience that person’s culture and appreciate their culture. Why do you want to turn them into a bunch of just Mish mosh? I don’t understand. That’s goofy.

People are different. And we should celebrate differences.

Not use them as a punch line. Great. Absolutely.

But anyway, Walmart, they had two things. One was, like I said, operating and being successful in a small town. But they were the first to open up innovation in their supply chain.

So Walmart, I think they got their first big warehouse. And for a tightwad, like Sam, I mean, a million dollars for a warehouse had to be a hard check to write.

But innovation was necessary. So they innovated to the point where their business model or their actual their supply chain management, they would have trucks come in to bring the goods for stores on one side, and they would immediately be unloaded and loaded back onto other trucks go into stores on the other side.

So they innovated this process to where nothing ever stayed in the warehouse long, right? It was just a place to exchange. So it was a depot. It was not a warehouse, really. So he paid a million dollars to not even have anything in the warehouse. Exactly. So it but they got very good at making sure that nothing was stale. Nothing ever stayed long. Enough for the new model to come out. It was always pushed out, always pushed down. And to study this is kind of the precursor to Amazon. Because Amazon has arguably the most advanced supply chain. I mean, ever. They’re ridiculous man, you can get any item in the world you want at your door less than 24 hours. Well, they’re warehousing. They also innovated the shared warehousing model, where if they don’t have a warehouse in the area, they will partner with one. And I don’t know how the computer system tracks all that crap because I know from my very, very brief experience in customer service is called a dropship or whatever. And they have a contract with that warehouse. So when someone puts in an order, if it’s a dropship item, it’ll go directly into that warehouse.

Yeah, and as a side note, on my way to work, I pass this area where they’re building these enormous warehouse depots.

They’re enormous. And it’s right there. Where, where Amazon and FedEx and all these people are. Yeah, right over there in Coppell and Carrollton? Well, no, this is over here, but they’re probably doing it everywhere. Okay. and so I found out that these businesses, there are guys who will buy land and build a warehouse, and they don’t have a business. Yeah, they’ll buy it, build a warehouse, and then contract with Amazon. Yeah, that’s their business model. And all they do is facilitate.

And so yeah, it’s crazy. But so back to strategic planning, and innovation.

You know, you can take a lesson from Walmart, because they needed to be different. And so while they had a similar business model, they were a similar type of place to Kmart, let’s say.

But they innovated a little bit to the point where they had a competitive advantage. And they focused on a different part of the market initially, which helped them gain that foothold. So in business, you don’t want to necessarily take your competition on head to head. Especially if you’re the new one.

You could probably take someone on head to head if they’re the new one, and you have the foothold, you just want to be different. You want to be different in some way, something needs to be different. For instance, you don’t want to enter the market for let’s say, a Tree Service, that’s known for being the low cost leader, and then compete with them on cost.

You wash all the cars that are in the driveway, before you leave. I don’t know, I mean, so to be different if you’re trying to compete with a low cost leader, but providing a better quality service at maybe a higher price point. Would that be a way to do that? Yeah, absolutely. That’s the that’s the go to way Yeah.

Because you’re either gonna compete on cost, or you’re going to compete on quality.

Or you’re going to compete on speed. So you might be more expensive, but you’re really fast. Or you might be expensive, but you’re really fast, and do great quality work.

So I have this triangle printed out in my office, that it’s It was a joke. It’s like a punch line in my office that shows it’s, it’s a triangle. And on the three points, it says, Good, fast and cheap, on the three different points of the triangle. So good, fast and cheap. And the point is, you can have to pick the two.

Because if it’s good and fast, it ain’t gonna be cheap, right? If it’s good and cheap, it ain’t gonna be fast, right? You can’t do all three. What if it’s cheap and fast? It’s cheap and fast it’s not gonna be good. The quality is not gonna be there. It just won’t. Yeah. And so, like the dollar store crap, it’s cheap. It’s fast. It’s not gonna last long.

What sucks is when it’s expensive, and slow. And then you notice it’s got bad quality, too, because the owners have taken all the profit. They’re not putting it into the product. But anyway, so yeah, so you have to pick something that’s unique. And you can get really crazy with unique. You know, it doesn’t have to be endless possibilities. Yeah, yeah, it doesn’t have to be the go to like you were saying better quality. It can be something off the wall like you wash all their cars before you leave.

And I mentioned that because squirrel marketing is is also a metaphor for your business. Because when you’re marketing for your business, you can take your marketing plan off on a crazy tangent.

And sometimes that’s all it takes for you to have a competitive advantage is to be different. To be known for something off the wall.

So you can have a squirrel in your own marketing.

And that’s perfectly okay. I remember when I was a kid, there was a rug service or carpet cleaning service. And while they were cleaning your carpets, they would rake or mow your yard. I mean, it was kind of weird.

Yeah, I mean, but they were trying, right. Yeah, I guess I didn’t do it for long, I don’t think right. But I guess that’s a way to, you know, get your name out there and show that, you know, you’re serious in this. In this. What’s it called? sector? Yeah, well, I think they, it was a small deal. It wasn’t the big, big name deal. But I think maybe they involve their kids in the business. And they got their kids raking leaves and mowing yards. And I said, Okay, tell you what, if, if you let us clean your whole house, we’ll do your yard for free.

And so the kids would come in and do the yard and then the business would pay them right? for being a partner in the deal. Yeah, helping them with their gimmick. And that’s what it is, it’s a gimmick. So you can have a gimmick.

But you need to also have a core plan that’s a little bit different than your competition.

And so, let’s go to the next segment of this, really, because I think we’d beat this one to death.

I love case studies, first of all, because if you can analyze the past, you can learn from it. And then that shapes your future. If you don’t study the past, you could repeat the best and sometimes it’s not good, right?

But Fujitsu was pretty interesting. They developed the first computer in Japan, that people could use. And that’s an old company from the 30s. And so Fujitsu Japanese electronics company.

They were the first to innovate their business model, and involve other stakeholders in their planning.

So, okay, so let me explain that your company, let’s say you are your company, you have everything to say about your strategic plan. And you don’t involve anybody else in it, because it’s your company and you do what you want, right? Well, that’s the traditional way of doing it. And it was that way for a long, long time, in fact, was almost the downfall of Harley Davidson. When Honda came in with their little 50, cc motorcycle, they almost put Harley Davidson out of business. And there’s reasons why they didn’t because Harley was an icon and a symbol of American individualism and everything but so Fujitsu involved, their customers, their distributors, their suppliers.

They’re all their supply chain, participants, their employees, the general public, they involved all stakeholders in their strategic plan, which is probably a good idea. And for that, well, for two things. First of all, in Japanese society, it never happens. Yeah. Or it didn’t.

So it was completely innovative in that geographically, but it was also completely innovative in the world. Because the companies felt like they knew everything the consumer didn’t know anything. They only wanted the consumers business to buy their product, they didn’t want them affecting their business. They didn’t want change, nothing. Well, Fujitsu kind of flipped all that around and innovated and it now it shapes every part of that company. They have these, think tanks these What do you call it?

What do you call that? You have lecture and then you have lab so these labs. So Fujitsu now has all these labs where people can come in and innovate and brainstorm and think off the wall and shape the company’s future. That’s a great idea. Well, now all the big companies do it. Apple does it. IBM does it. IBM almost went under. Yeah.

Thanks, Bill Gates, shout out.

But a hashtag evil.

But anyway, so yeah, Fujitsu is awesome with that. Harley Davidson, by the way, just to finish that thought Harley Davidson.

They thought they knew everything. And they didn’t worry about Honda, they didn’t think Honda was anything had any, like bearing on their future. Now, when you’re trying to build a business like this, is it important to know your competitor? Know what they do know what they don’t do? Well? Well, that’s that goes back to the beginning of times as spies. Yeah. You got to know your competitor, you’ve got to know. It’s the whole thing with the CIA. Yeah. I mean, seriously, and the KGB? And it’s the same thing in business Really? Right. Yeah. But you have two ways ago, maybe not at that level, you have an inside job, right? No, no silencers, but you don’t need silencers. But I would say that you’ve got to study your competition. In order to know what you want to do and not do with your future of your company, you got to know what’s going on.

You can’t build a business in a vacuum, you know. And so if you’re kind of in the dark, and you don’t want to, you don’t want to bother with that. You could go down a road based on your own brain. And you might find that that road is the wrong one, because this innovation over here. So you’ve got to know your competition, but it depends on what you’re doing. If you’re a drycleaners. It may not be as big a deal. Unless they come out with some new technology that your competitor starts using. And you have no clue. Yeah.

So So yeah, I think I think that the point of this, this episode really is you’ve got to spend the time and money and energy. And you’ve got to involve stakeholders, all stakeholders, and those are not people walking around holding your steak. Stakeholders are anyone involved, anyone who benefits from or is affected by your business. A stakeholder could be the general public, let’s say, if you’re a gas station, stakeholders for you would be the people in your area, the people who pass through the people who supply the gas to you, the people who maintain your pumps, the beat, all your employees, all those and your investors.

You consider all those stakeholder, they’re all stakeholders because they are all affected by the business. So when you involve all stakeholders, in your company planning, and you surveyed your suppliers, you survey your vendors, you survey your employees, you, have safe ways for them to express their opinion about you.

And what’s working and not working so that they don’t fear retaliation, right.

Some companies, if you speak about somebody, you’re gone, you know, and that’s stupid, because how are you going to grow and make positive changes, if you don’t listen?

You know, if somebody says it’s too cold, you turn the air down. If somebody is too hot, you turn the air up, I mean, what’s the big deal. So you have to you have to change with the times to the point where you’re at least attempting to progress and make things better for you and for your stakeholders.

So a company’s not just the owner. It’s everyone who’s involved and everyone who’s affected by it.

And the good thing is that it’s never a waste of time or money, to engage your stakeholders to sit down and plan and to brainstorm with people that you trust and make an actual good, solid plan to get from point A to point B. You will never miss that money.

It’s always a good idea. And way too often companies don’t listen to all stakeholders. They just look in the mirror and think they’re the ones who know everything. And then they’ll know fairly well not necessarily they could fail or they could just creep along or I guess in a In a crazy upheaval infested world, they, they could be wildly successful, but still, it’s not as successful as they could be right?

If they embraced the the power of the stakeholder inclusion, so.

So yeah, that’s just an incredible type of thing to do. It’s like being introspective. I mean, if you never look at yourself, you never analyze yourself at all. And you just exist. Then how do you know whether you’re progressing or not? Yeah. All right. Well, that’s kind of the time we’ve got now. I think it’s coming up on half the half hour.

See you next week.

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