Focus

efficiency

“The man who chases two rabbits, catches neither.” Confucius

 

The Coca Cola company did 2017 annual revenue’s of $35.41B with a market cap of $188B.  Its primary competitor PepsiCo did 2017 annual revenue of $63.53B with a market cap of $161.8B.  With almost double the annual revenue, why is PepsiCo worth less than Coca Cola?  In Al Ries book “Focus”, he details the difference in strategy between the two companies.  Coca Cola chose to focus on the smallest number of things to produce the highest revenue possible.  PepsiCo on the other hand diversified away from just making beverages into over 28,000 restaurants which resulted in substantially higher revenues but not a substantial increase in value.

 

Coca Cola has a clearly defined Hedge Hog concept.  They know what they can be best in the world at, and equally important, what they cannot be best in the world at. 

 

One of Carl Reichardt’s (former-CEO of Wells Fargo) colleagues said of Carl, “If Carl were an Olympic diver he would not do a five-flip twisted thing.  He would do the best swan dive in the world, and do it perfectly over and over again.”

 

I challenge you to think about your focus.  What can you be the best in the world at and what can you not be the best in the world at.  Once you have the answer, keep perfecting it over and over again.

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