Today let’s look at another way of re-mixing your business for huge performance improvement, namely the product area. This one seems like it might be just like customer remix or market segment remix, but perhaps the examples will offer a different look.
At Snapper, the premier lawnmower manufacturing company, we cut our product mix roughly in half to improve our top-line revenue by 50% in a single year and take our bottom-line profit from a loss of $54 million to a profit in just that one year of $13.7 million. What did we do?
As background, the lawnmower industry had for years been introducing new lawnmowers in every dimension imaginable of cutting width, from 18″ wide (even some 17″ and 16″) to over 72″ wide cutting swaths in a single pass. In the “me-too” emulation mode, Snapper and many others just kept adding more products this way year after year, resulting in short manufacturing runs of lawnmowers in widths so close to each other that customers couldn’t even differentiate or choose. At Snapper, we cut the number of product offerings from over 190 products to less than 80 which simplified customer choice, offered them better prices (since our manufacturing costs dropped so dramatically due to economies-of-scale in production runs), and allowed us the opportunity to focus on customer-desired product improvements in just those fewer products.
At the same time, we had done some customer research that indicated that the “manly” super-hefty lawnmower was good, but that over half the population cutting lawns were women and slighter men (like myself). We made the decks easier to lower and raise on the riding mowers, made the controls easier to operate on the walk-behind mowers, made the seats more multi-gender, and so on. We also focused entirely on lwan mowers, deleting our line of hand-held lawn products like blowers and string-trimmers (we were expert at lawn mowers and not those other products). Perhaps this is a combination of “product” and “production” focus, but you get the idea!
Why not look at your product offering to see if you’re even making, distributing, selling, or servicing the products that you’re good at?
Best product re-mixing wishes, Kraig