One of my favourite words is ‘groak’. It’s a medieval word that means looking at someone’s plate of food in the hope that you’ll be offered some of it.
Dogs are great groakers, but so too are many businesses. Executives look at the success of their rivals and ask, “Why can’t we have a bit of that?” As a result, over time, a low-price business will offer some higher-quality, higher-priced ranges. Conversely, a premium business may be tempted to offer some lower-priced products and services in order to grow sales and profits.
But groaking brings risks. For value-based businesses that creep up-market, loyal customers start to think that they can get better deals elsewhere, while the drift to higher-priced ranges can increase operating costs and lower margins. This is why Wilkos fell into administration last year.
For quality-focused businesses, the introduction of lower priced offerings can damage the brand. Burberry’s problems, for example, probably began when their clothing ranges became synonymous with football hooligans, while Maserati’s long-term pursuit of sales volumes, rather than product quality, has contributed to a double-digit decline in sales this year.
It’s good to learn from your competitors and from other markets, but a successful strategy eschews groaking. Instead, you must keep the discipline of focusing on what sets you apart and not fall into the trap of groaking and pursuing non-strategic growth opportunities that simply get you stuck in your market’s no-man’s-land.
Off The Record: Tempted by Squeeze
Tempted by the fruit of another,
Tempted, but the truth is discovered,
What’s been going on?
Now that you have gone, there’s no other,
Tempted by the fruit of another.