“This is the most focused company I know, am aware of, or have any knowledge of. We say no to good ideas every day. Every single product the company makes would fit on the single conference table in front of me. And we had revenues last year of $40 billion.” (Tim Cook, COO, Apple)
Apple is a great company simply because it sells products that people want. Interestingly its range of products is tiny and, as Tim Cook says, would fit on a single conference table. They’re great products and are all well marketed. Consumers love them and they buy them by the truckloads. It is a classic example of a market-leading business with a tight, narrow focus that operates within a deep and prosperous niche.
Apple didn’t invent the computer, the internet, mobile phones or portable devices to play music or movies. They already existed. What Apple did do was make better devices that would appeal to the widest audience possible. Along the way it changed old distribution models (via iTunes and the Apple retail store network), lowered supply chain costs and forced a dramatic change in the business model of the providers of movies, music and other digital content. It also created a ravings set of fans.
Apple succeeded by concentrating on answering the two most important questions for any business:
- How do I get my product (or service) into the hands of my customers in the quickest, most efficient way possible?
- What can I do to compel them to buy from me?
Today’s marketplace is tough and customers are more sophisticated than ever before. As a consequence businesses will need to exceed their expectations by being better, different or cheaper than their competitors – most will need to be better or different. What this will involve, in the future, is operating in a narrow but deep niche in which they can dominate. Making a better “mousetrap”, as Apple has done, will be the sweet spot for most companies going forward.
A good starting point is having a very tight understanding about what you are REALLY good at and what you can best monetise. Defining a narrow but deep niche is a key requirement. Then determine the scale of the opportunity by figuring out how many potential customers are out there for what you want to sell. If it’s a large enough opportunity then start asking (and answering) the two questions listed above.
There’s no more magic to it than that, other than great execution (and grit), of course – a fact that Apple will attest to…