Jan

14

Specialization or Broad Market

January 14, 2008 |

I frequently ponder the question: should I go deeper into the same sub-market, or should I try to expand into a broader market? The kinds of services we offer in my consulting firm, so far, have been fairly specialized. Catering to big telecommunication companies, their resellers, or their vendors. On the other hand, some people may even say that is a broad market already; it is global, after all, and it covers CableTV, Internet, and Voice services for both personal and business use.

The initial opinion most people give (or would give) is that broadening market diversifies the offering and reduces risk. I tend to agree with that, except I also worry about one thing: the bottom line. On very specialized markets you can charge a premium, as there are few people who can address the market. You can show value added that very few others can add.

A generalist, on the other hand, faces more competition. He/she quickly needs to show that there is value in the services, or thousands of others will compete for the same kind of business.  With no value added you get thrown into the commodity business, a place where people have to charge by the hour and customers nickel and dime you for everything you do.

How to solve this problem?  By no means I can even suggest I know how.  It is a Chicken and Egg situation.  I have some ideas, however:

  •  Migrate into adjacent markets - Do a service of a different type to the same customers that trust your work.  Over time you can declare unique expertise in the new market.
  • Acquire Unique Skills - Train, train, and re-train.  Go back to school.  Get certifications.  If you have to make your services a commodity, make sure they are scarce, even if not unique.
  • Partner - Find someone else who needs help setting up their consulting practice.  Offer them your experience, contacts, and sales expertise.  Learn from them the ropes of doing performing the tasks for the new market while you teach them the ropes of doing business on your industry.

Can anyone think of other ways of expanding without falling into a commodity pricing trap?


Comments

1 Comment so far

  1. consulting » Blog Archive » Specialization or Broad Market on January 15, 2008 6:32 am

    [...] Read the rest of this great post here [...]

Name (required)

Email (required)

Website

Speak your mind

 

Recomended Links:

* Your Link Here