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What The "Burger Wars" Can Teach B2B SMEs about Sustaining Growth

by Doug Davidoff | Mar 24, 2014 7:30:00 PM
What_the_Burger_wars_can_teach_SMEsI have to admit when I first saw the headline; Burger King hits McDonalds where it hurts, I thought, “who cares?” After all, I’m proud to say that I haven’t eaten at McDonalds or Burger King for years, my kids have outgrown them and, I thought, how can anything to do with Burger King or McDonalds be of any use to me?

Luckily, I needed a mental break and there were no other headlines that I found interesting, so I clicked.  There before me was a business lesson that every small and mid-sized (SME) B2B executive should view. Burger King is attempting to take advantage of a clear strategic mistake being made by McDonalds.

Some Background

As McDonalds is spending tremendous amounts of time, money, energy and focus on extending its products with the likes of chicken wings and apple slices that “apparently nobody wants,” they’ve shifted the focus away from their core business, namely The Big Mac and fries.

Back in September, Burger King attacked McDonalds at the core with the promise that their new Satisfries have “40% less fat and 30% fewer calories.”  In November, BK added The Big King – an attack aimed directly at the Big Mac. Since that time, Mick-D’s has seen a precipitous decrease in year-over-year same-store sales (a 3.3% plunge in January). 

While it’s certainly too early to determine how effective these moves are going to be for Burger King, it is clear that they’re having a meaningfully negative impact on McDonalds, and it will take them years to fully recover even if they recognize the mistake they’re making immediately and take the necessary steps to fix their strategy quickly and effectively.

The Lesson for SMEs

You can’t really blame McDonalds for what they’re doing.  After all, chicken wings is a fast growing segment in the industry, and serving apple slices in Happy Meals is a move to appease the complaints about McDonalds harming children.  The problem is that McDonalds has forgotten why their best customers come to them in the first place.

As a result, McDonalds menu has become increasingly confusing and McDonalds is becoming less and less relevant. Chasing what your detractors wish for is not an effective growth strategy.

I see this everyday with SME’s.  They lose their plot and become increasingly myopic as they focus (obsess) over what their competitors are doing, or what outlier prospects ask for.  As a result, their products/services (as well as their message) become increasingly complex and prospects/customers get increasingly confused.

Focus On Your Core Is Critical To Sustaining Growth

Early in my career I was always intrigued with ways we could take what my businesses did well and apply those ideas to new markets.  The focus was fun and exciting…and devastating. 

Sure, I’d get some quick hits and some quick shots of adrenaline, but it never stuck. I still remember the concern as I was contemplating starting Imagine.  Would I be able to translate my ideas into sustainable growth and profitable cash flow?

I quickly learned that while figuring out ways to extend revenue streams was exciting, success required a far less dynamic focus.  In many ways, as I’ve written before, it can be quite boring.  It involves continually answering three questions:

  • Who are our best customers (and why)?
  • What valuable problems do they have that we can uniquely solve?
  • How is their world changing, and what can we do to increase our connection?

From time-to-time, the answer to your first question will change.  When that changes, everything – and I mean everything – in your business changes. 

Had McDonalds continued to answer these three questions, they wouldn’t have left such an opening for Burger King’s attack.  As an SME, your ability to stay focused on these three questions will give you the traction you need to scale growth.