There is a never ending debate regarding whether it is a better business strategy to offer a limited or wide range of products. Consumers are familiar with the success of McDonalds’ which to a certain extent hinges on its limited menu selection. On the other hand, there are many success stories of outlets which thrive because of their offering of a wide range of products. The extensive selection of crepes of this outlet at Takeshita Street in Tokyo in the photo above is a good example of this strategy.
For a would be entrepreneur thinking of starting up a business, the choice can be baffling. Both strategies have their pros and cons. For a fast food outlet, the decision could be made that convenience, quality and value are of utmost importance in narrowing down the range of products. Convenience could be in terms of product delivery time. Quality could be on the consistency of the product and value could related to the price charged for it. For an outlet making crepes as an example, the decision could be based on offering customers a wide selection to entice them in the first place. Since the crepes are positioned as an impulse purchase, the likelihood of someone eyeing a suitable selection is higher with a wide choice given.
At the end of the day, the correct strategy would be to meet the customers’ expectation. In going to a fast food outlet, a customer expects to have a consistent quality burger at a reasonable price while not waiting too long for it to be ready. As for crepes, the customer expectation is for the outlet to have the toppings that he or she wants. If the outlet does not have the desired toppings, the customer may or may not make a purchase.
Thus it would be useful for the would be entrepreneur to put himself or herself in the shoes of the customer. Ask yourself the reasons why a customer would want to make a purchase from the business. There are likely to be a host of reasons. Rank them to find out the key decision points for the purchase. Then ask yourself whether it is a better strategy to excel in the top three reasons or just be good in all the reasons. As in most things, you can’t excel in everything so be realistic. Sometimes, trying to excel in one reason could result in pulling down another reason. For instance, in trying to offer quality ingredients, it may become more difficult for you to offer low prices. In such cases, one has to analyze the importance of both reasons and give priority to the more important one.