Strategic insight comes from keen observation

That strategic insight comes from keen observation of the market place is an oft repeated dictum that few follow. However, every once in a while one comes across an example that exemplifies it. Here is a great example courtesy India Today:

While coming back from Dalhousie last year, thanks to a cancelled flight, Deepak Puri, the chairman of Moser Baer, was forced to take a train. At Pathankot, two push carts were selling his CDs. Business was brisk, and they managed to sell quite a few. A few months later, at an upmarket store in Delhi’s Khan Market, Puri discovered that the shopkeeper stacked only two of his titles. The reason: he would make a fatter margin—Rs 150 on a Rs 300 CD compared to Rs 8 on Moser Baer’s Rs 28 CD.“To make the same margin, I’d have to sell 18 of these CDs”, he told Puri.

Back in office, Puri immediately called his marketing executives and decided to restrategise. This involved selling his CDs in push carts in high-cost low-space areas, a model that has become a success. This ability to adapt and innovate in real time makes Moser Baer agile.

If Puri had continued to focus on upmarket distribution channel, its likely that he would have struggled in the market place. On the other hand, selling CDs through push cart probably required some internal discussion, as this channel is hardly considered a legitimate channel. But where another person may have looked at this as too much of a paradigm shift, Puri embarked on developing this distribution channel to his advantage.

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