Strategy Planning Analogy #560: Gas and What??

THE STORY

When I brush my teeth, I just put my toothpaste on the toothbrush and put it in my mouth. I thought this was normal.

Then I read an article about the research done by a toothpaste manufacturer. They wanted to figure out what would be the optimal consistency for their toothpaste. Therefore, they did a survey to find out how their toothpaste was used.

The research showed that there was no single, dominant way that toothpaste is used. Instead, there were three common approaches. Some wet their toothbrush before putting on the toothpaste. Some wet their toothbrush after putting on the toothpaste. And what I did (and thought was normal—no wetting the toothbrush) was the least popular of the three.

As a result, the manufacturer had to design its paste to work under all three conditions. So much for normal.

THE ANALOGY

We like to assume certain activities are normal, just because that’s the way we’ve always done it. It doesn’t occur to us to consider alternatives. Our current habitual behaviors seem just fine. There doesn’t appear to be any need to change.

Yet, as we saw with the toothpaste, there are alternative approaches and different ideas about what “normal” toothbrush behavior is. So what seems odd to us can seem normal to others.

This trap often occurs in strategy development. We get trapped into thinking that the way we’ve been doing things for years is “normal” and that any other approach would be odd and undesirable. Just as I thought that putting toothpaste on the toothbrush did not require water, you may think that your approach does not require any additions or changes.

Yet, as the toothpaste story shows us, there can be many viable alternatives out there. And if we do not consider that there can be viable alternatives, we will miss out on many strategic opportunities.  

THE PRINCIPLE

The principle here is that some of the best strategic opportunities may come from looking at options that run counter to what you consider normal. You may have to abandon your ingrained habits and preconceived notions of “how things are done” in order to reach a better condition (a newer, better normal).

We will be using retail gasoline as an example of this principle.

Normal #1: Gas Plus Auto Repair

Back in the 1960s, when I was a child, pretty much every gas station was also an auto repair facility. The gas pumps were in front. Behind them was usually just two stalls for auto repair and a place for a cash register. And that was it.

It was like the gas station run by Gomer and Goober on the Andy Griffith Show on TV. This was normal, and almost nobody did it differently.  

But then the world changed. Cars got more complicated to repair and the tools to do it became more expensive. The mechanics at the gas stations were not skilled enough or had enough money to invest in fixing the newer cars. As a result, auto repair moved from gas stations to large, specialized repair facilities.

The old normal for gas stations became obsolete. If you stuck with the old normal, you were in trouble. A new normal was required.

Normal #2: Gas Plus Convenience Store

The new normal was to convert those repair stalls into a convenience store. It became the strategy of the “eens”: Caffeine (coffee & soda), Nicotine (Cigarettes), and Gasoline. This became the new way to run a gas station and almost everyone used this same basic strategy.

Beyond Normal

Although this became the typical approach, there is no law that says it must be the only approach. Here are some other options in the US.

In the Carolina’s, Sheetz has positioned itself as primarily a great restaurant which just so happens to also sell gasoline. In fact, they are experimenting with hiding the gas pumps in the back in order to improve the image of the restaurant.

In Ohio, United Dairy Farmers essentially operates gas pumps in front of an ice cream store. And this is no one-store operation. They run over 200 of them. You may not think it normal to buy your gas at the same place as you get an ice cream cone, but it is normal in Ohio.

Large, big-box retailers like Costco and Wal-Mart sell gasoline. In addition, many grocery stores use gas stations as a loss-leader for selling more food. The more food you buy, the bigger the discount on gasoline. At some places, if you buy enough food, your gasoline is free.

You can find gasoline pumps in parking garages. Farmers can install large tanks on their own property and pump it at home. The list goes on and on.

The Next Normal

With electric cars, we move from gasoline pumps to electric recharging stations. Where will these end up? In front of convenience stores? They are ending up in all sorts of places, like parking structures and people’s own garages. The rules can be reinvented all over again.

Implications

There are two main implications from all of this. First, just because something is normal today does not mean that it will be normal forever. The gas plus repair shop was normal for a long time but eventually became essentially obsolete. A move to electric cars could make any of today’s mass selling of gasoline obsolete.

So don’t assume that today’s success will last forever. It is a better assumption that today’s successful normal will become obsolete sooner than you think. In your strategic planning, always look for what’s on the horizon that could make you current approach obsolete.

Second, just because the marketplace has defined a normal way of doing things, that doesn’t mean that there are no other viable alternatives. Just as there were three viable ways to put toothpaste on a toothbrush, there can be many viable ways to sell gas. You can sell it with ice cream, a restaurant, with parking ramps or a host of other ways.

Your only limit is your creativity and your willingness to break away from “normal” and do something differently. In many prior blogs, we’ve talked about the benefits of differentiation. If you do things differently, you create a unique appeal that can put competitors at a disadvantage in trying to attack you. Perhaps you should break away from the pack and do things differently.

And these implications do not only apply to the selling of gas. They apply to all businesses. In a prior blog, we talked about all the ways you can sell pizza. If there are a variety of ways to sell gas and pizza, then there are probably many ways to sell your product, including options nobody has done yet. Perhaps you can be the first in a new alternative and reap all the benefits.

SUMMARY

Just because you call something normal does not mean that it is the only strategic option. There can be a whole host of alternative approaches which could be more successful for you than sticking with the normal way. In addition, because the environment is continually changing, even today’s normal could eventually become obsolete, to be replaced by a new normal. Therefore, strategic analysis needs to look outside today’s “normal box” to ensure that you are doing what’s right for you and right for the times.

FINAL THOUGHTS

Every time you fill up with gas at the pump, remember this blog. It can be a weekly reminder to take off the blinders which keep you from seeing alternatives beyond “normal.”