This weekend I finished “Understand Michael Porter,” by Joan Magretta. It relates to our analysis of the marketing campaigns that my classmates and I have been working on the past few weeks. A business owner needs to understand his value proposition prior to embarking on an advertising campaign. The purpose of the marketing campaign is to relay the value proposition to the consumer. In order to have a proper value proposition, a company must know activities are in its value chain in order to reach that value proposition.
A business owner needs to have expertise in his industry and specifically his competition. I am not suggesting that one should merely react to their competition. The competition has to be considered when developing your value proposition. By understanding what your competitors within your industry are doing, you can differentiate your business.
The author discusses leaving some customers behind. This concept is difficult for me to accept because I want to help everybody. However, Magretta gives several examples of customers that just do not fit the ideal client profile. Trying to be everything to everybody causes a loss of efficiency and profits.
Magretta also discusses “fit.” “Fit means that the whole matters more than the parts.” Trying to serve all markets and not be a specialist is an example of a problem with fit. It is difficult to be an expert in all areas.
The most important lesson anyone reading this book can gain is to decide on your values ahead of time. By knowing what is truly important, you can decide what can be compromised and what must not change.
Magretta, J., (2012), Understanding Michael Porter, Harvard Business Review Press, Boston, MA, ISBN 978-1-4221-6059-6
Master of Entrepreneurship Website for Mike Weimar 