Posted by John Scranton – July 20, 2011
On Friday afternoon, the racing meet at the historic Saratoga Race Course begins. The track will host many of the premier thoroughbreds in the country, and many from abroad. They will offer elite racing on a daily basis, attracting tens of thousands of visitors and tens of millions of dollars. The racing is so exceptional that NBC has contracted to nationally televise portions of the meet – the only regular broadcast of racing on network television. So how has this great institution remained at the pinnacle of their industry for a century and a half?
They have applied the boutique theory of business. Best articulated in the compelling book Small Giants, they have chosen to be great rather than huge. By limiting the length of the meet to 40 racing days, Saratoga offers a stakes race each and every day. They even provide 35 Graded Stakes races (the best of the best), nearly enough for a daily all-star event. By electing not to extend their meet and dilute their product, they continue to offer the premier racing meet in North America year after year.
This concept can be replicated in nearly any business. For a small operation, focus on delivering an exceptional product or service to a limited group of clients. Become the best alternative they have available so they keep coming back. Repeat sales are much easier than finding new customers. For a large organization, allow a division to self-manage and act as a boutique. Suggest they dominate a niche market, become the premier solution and remain that way – even at the expense of growth. Focus on your core competencies and use them to become elite in your space. Being big is nice, but wouldn’t you rather be great for 150 years?