Business Magazine

Beer Mat Strategy

Posted on the 18 September 2012 by Alanhargreaves @RechargeToday

Beer Mat StrategyA few ideas can be better than a lot.

What was Steve Jobs first strategic call when he returned to Apple in 1997?

According to biographer, Walter Isaacson, he slashed 90% of existing product development. On a whiteboard he drew a simple alternative plan.

It was a two-by-two matrix. The columns were Consumer and Pro; the rows were Desktop and Portable. Four market segments; four products. Everything else was eliminated. Apple was reborn.

Clear and simple product architecture does not signal a lack of strategic sophistication. Rather, it can cut excessive over think and generate clear focus. Someone like Jobs could use his drive and passion to turn that clarity into an incredibly successful business strategy.

Most of us, however, are not Steve Jobs. We can learn from him, but we cannot be him.

Beer Mat Strategy
Prompting creative action

Most people do not do their best thinking at work. Good ideas are more likely to come in the shower, or on a walk – times when the mind is not so cluttered.

Plenty of great strategies have been worked out on beer mats. Their strength is their clarity, like the mix of simplicity and scribbling that made Steve Job’s matrix a template for product development.

Try it yourself. Instead of waiting for a major review, assess your business or project from some very simple perspectives.

The profitability of products or customers, for example, is never even. If you have a range of both, some will contribute handsomely to profit margin; others won’t. Some may be a net cost.

Are you focusing your efforts on the most profitable product?  

For a reality check, try a simple matrix.

Mark the top most profitable; the bottom least profitable. On the right hand side, put high volume; on the left, low volume.  Then map your product range.

Do you allocate the greatest amount of resources – finance, people, and inputs – to the products in the top right quadrant? Maybe you’ve got it right, but stand back and look at it. Does it need a rethink, or just a tweak?

What about customers?

Your top customer is not always your best customer. By the time you’ve adjusted for the cost of servicing them or the extent to which you finance their payment terms, margins can get pretty thin.

Beer Mat Strategy
That’s before you account for the compensation of the top sales team selling to them or the special services you provide to keep their business.

Is there more margin headroom in selling to other customers? Should you be putting more resources behind servicing them rather than your biggest or dominant customer? Can you also make them “best” customers?

Easiest of all, try 80:20. Put “Effort” on one axis and “Impact” on the other. What’s in the quadrant that produces 80% impact for 20% effort? It’s not just a useful business exercise. Try it on your life.

Matrices come in different shapes and sizes, but they all have the advantage of highlighting different perspectives. The ideas of some of the most influential management thinkers – from Michael Porter to Stephen Covey – can be summarized in four quadrants. It’s a simple tool; one which didn’t do Apple any harm. 

 


You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • Ralph's Top 10 Blogged Band Chart - as Played on Radio KC - 28.5.17

    Ralph's Blogged Band Chart Played Radio 28.5.17

    Click here for the Ralph's Life websiteTracks from the Top Ten Blogged Bands are played every Sunday 5-7pm on Radio KC as part of Ralph's Indie Show.LISTEN TO... Read more

    The 27 May 2017 by   Mike Lindley
    ENTERTAINMENT, MUSIC
  • Top 3 Ways to Improve Your Health

    Ways Improve Your Health

    I recently listened to an American comedian, who in a sketch was advising a man whose girlfriend had just left him to let her go. "She's not worth it" she told... Read more

    The 27 May 2017 by   Dietdoctor
    DIET & WEIGHT, HEALTH, HEALTHY LIVING, MEDICINE
  • Maria’s Pancakes

    Maria’s Pancakes

    Meal plansGet lots of weekly low-carb meal plans, complete with shopping lists and everything, with our premium meal planner tool (free trial).... Read more

    The 27 May 2017 by   Dietdoctor
    DIET & WEIGHT, HEALTH, HEALTHY LIVING, MEDICINE
  • Cavendish Beach Music Festival 2017 Preview: Zac Brown Band Top 10

    Cavendish Beach Music Festival 2017 Preview: Brown Band

    If you love country music, and you love festivals, and you love to party... then Sunday night at the Cavendish Beach Music Festival is def. going to be your... Read more

    The 27 May 2017 by   Phjoshua
    LIFESTYLE, SELF EXPRESSION
  • My Envy Box May 2017 Unboxing

    Envy 2017 Unboxing

    Hello everyone, what’s up? How are you surviving this heat? I fell sick so many times while I was out in the daytime. Please drink lots of fluid and stay... Read more

    The 27 May 2017 by   Jhilmil D Saha
    HAIR & BEAUTY
  • Holiday Beauty Prep • Made Easy

    Holiday Beauty Prep Made Easy

    We are fast approaching the summer holidays where the only stress of our day should be deciding what cocktail to order. Hot sunshine, white sands, crystal... Read more

    The 27 May 2017 by   Kellilash
    HAIR & BEAUTY, LIFESTYLE
  • Softening the Edges

    Softening Edges

    This post will probably be of interest to anyone who is growing trailing plants, such as tomatoes, courgettes and squashes, in containers. Read more

    The 27 May 2017 by   Mwillis
    GARDENING, HOME

Paperblog Hot Topics