What drives some companies to succeed while others languish? Why does Kmart struggle while Wal-Mart and Target thrive? What the former lacks — that the latter have nailed — is a coherent and distinctive “way to play.”
Wal-Mart focuses on “always low prices” and creating a welcoming atmosphere. Target caters to a similarly cost-conscious customer set but focuses more on image and design. You can’t be all things to all people, so you need to make decisions about how you will provide differentiated value for a specific set of customers. This requires deciding what you won’t provide and who you can’t serve as well.
The focus that comes from these tough decisions better positions you to succeed.
Adapted from “Why Can’t Kmart Be Successful While Target and Walmart Thrive?” by Paul Leinwand and Cesare Mainardi.