Tuesday 22 November 2011

Simplify your product offering

I just read an article on the Dutch iCreateMagazine Apple site (http://bit.ly/uR6MlX).

All credits goes to the author Daan Jeuken but I found it so applicable in my job as EA that I translated parts of the content in English for you.
... Apple's $ 30 billion worth, but they only have 30 products. If companies have too many different products, none of them will be great. The secret behind this focus is not to say "yes" to every good product, but to say "no" to hundreds of good ideas."
..."Many people think that simplicity is the secret to keeping products simple and close to their original base. That's not true. If something begins to develop, it quickly becomes complex. That is where most people stop; the point is to make something complex into something simple again."
Over the years, Apple has quite a brutal decisions. So it was a rebel from the floppy disk to be written off and now it seems to do the same with the CD. Do not hold onto ideas from the past, even if they are successful for you. And don't develop those products because others have. "
Apple's commitment is closely related to its focus: "If you are not the best you can in a, don't enter that market."
(read full article on http://www.icreatemagazine.nl/nieuws/rondom-apple/apple%E2%80%99s-4-sleutels-tot-succes/ )
If you offer too many products too your customer, you need to support them all. This means that all your energy will be spread out amongst them. I'm referring to spending resources from all departments, sales, marketing, operations, IT ... Divide et impera?

Financially, companies are afraid to simplify their product offering because these products generate revenue. However, due to the lack of a detailed cost picture, very few companies are able to make a valid business case. And without a business case you can't really tell if the products are profitable. 

So, focus, rationalize and keep that portfolio small. Your customers will love it if they actually understand what you are trying to sell them.

Edit: Just read that Google removed 7 products to simplify it's offering: http://googleblog.blogspot.com/2011/11/more-spring-cleaning-out-of-season.html. Even the much announced Wave is discontinued. If the profitability is not their, get rid of it as your customers will only be confused and they'll look at you as a company without focus and vision.