T
he bankruptcy started when leadership decided they were in the railroad business … instead of the transportation business.
While Penn Central was trying to run a railroad,
people in other companies were inventing ways to employ trucks and planes ... to move people and things.
There is nothing so critical to the performance and success of a business as the correct perception of what that business is and how it relates to the market. That statement is worth repeating: There is nothing so critical to the performance and success of a business as the correct perception of What that business is
and How it relates to the market.
And … that is never truer than in the middle of a massive disruption of the marketplace! Understanding the purpose of your business may be the most important result you get from the painful, but necessary, crisis assessment of your business.
Here are a few examples
of this required understanding: Hotels are not actually in the business of selling hotel rooms. A hotel room has a bed and a TV. It costs over two hundred dollars a night. But the business is much more than renting a room. Hotels are multi-million-dollar investments in hospitality and fine dining. They provide assurances of quality, efficiency, and genuine friendliness. And they should be marketed as such. That was the hotel business. Now … keep your eyes open to see what hotels do to reposition their offerings after they are impacted by major health concerns and a dramatic decline in the flow of “traditional revenue.”
Another business we all know rents cars.
In an effort to move forward, they could move out of the rent-a-car business and into the travel and sightseeing business with an emphasis on health and safety. Through a merchandising, public relations, and marketing program designed to position such a company as more
than a set of car keys and a rental car form, the company could become number one in a unique segment of the market.
Retailers will find the need for this type of thinking. Some will learn they were not in the dress business, but the personal fashion and service business. Others may recognize that they are not in the furniture business but in the interior home design business. And all retailers may find different ways to market with virtual tools and to rapidly expand online strategies.
The point is
before
you market what you are, you must
know
what you are.
Then, it becomes a matter of telling people what you are. This requires advertising, marketing, and public relations, using both traditional and newer methods.
Positioning
your business for success will help you, first, increase your chance of survival in a crisis and, second, improve the long-term profitability of your
business once the market recovers.
And, by the way, it turned out that Penn Central wasn’t even in the railroad business. They were actually in the real estate business.
So as a business owner ... it is imperative to step back and determine exactly what business you are in. Is your business a manufacturer of a certain type of parts ... or are you really in a “service” or simply an “assembly solutions” business?
Knowing this ... is the first step to redeploying your assets to address the market as it changes in good times and bad. But it is more important in times of trouble because there may be no second chances to find the opportunity match for your business.
It may not be easy or immediately evident ... but as you can see from the history of Penn Central, knowing what business you are in—or should be in—makes a critical difference. Not knowing puts you at ever-increasing risk!
As the result of massive changes around you, this one assessment and revelation can make all the difference in the plans you develop. You should put this new knowledge in place to gain solid footing for your future. Include it directly in your foundation and thrive plans. So, before you start planning, sit down and think through what business you should be in to survive and thrive in the next few years.