Beachhead Market: An old military strategy behind Amazon's success!
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What can you learn from Amazon’s baby steps? Revealing the old military strategy behind Amazon’s success!
Have you heard that follow the path of least resistance is bad for you? NOT if you are a company!
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In this video I will tell you how you can up your game as an entrepreneur and improve your business skills.
Taking the path of least resistance suggests choosing a way forward that has the least amount of struggle … the least amount of fight in it. If you are a new business, the path of least resistance is equivalent to choosing the market where you are most likely to succeed.
In business strategy, it is known as the beachhead market. Beachhead market … this is the first market that you will choose to pursue. Occupying this market will give you the advantages and the capabilities to expand to other markets later on.
The term beachhead actually comes from military strategy. If an army wants to invade an enemy’s territory and this territory was water access, that army general will almost always choose a beachhead strategy. Executing this strategy will require securing the beach (or the shore) and them using this secured piece of land to deploy troops and machinery that will facilitate the expansion into the enemy’s territory.
Let’s look at the example of Amazon. I remember when Amazon was still a forest … but now it is better known as the ecommerce empire created by Jeff Bezos.
Amazon is huge, but how did it get there??
Amazon didn’t start off by trying to occupy all of the ecommerce business (as they do now). It would have been too difficult and too expensive for them to make this attempt. Not to mention, if they did … It would have drawn too much attention so Amazon could have been crushed by the competitors at the time.
For all these reasons, Amazon decided to focus on books only! They wanted to become the go to place for buying books online. This would be their starting point … their beachhead market.
However, although an online business … their beachhead market also had a certain geographic focus at the very beginning. Amazon started off in Seattle! And Seattle is the best place where they could have started. Why Seattle you may ask!?
According to data, from all people in in the United States, people in Seattle read most books. Books are not a seasonal product. It could be because the weather in Seattle is a bit unpredictable so people may choose to stay at home with a nice book.
How do you go about choosing your own beachhead market? It is simple …
1. The customers within the market must all buy similar products. You do not want to provide variations of the product or allow for product customization at the early phases of the business development because this adds to the operation cost.
2. The customers within the market have a similar sales cycle and expect products to provide value in similar ways.
3. Word of mouth communication exists between customers in the market. For example, existing customers serve as high-value references for potential customers. It makes your customer acquisition very cheap … or technically … free!
More on how to choose a beachhead market?
1. Does the customer have the money to pay for your product/service?
2. Can you easily get the product to your customer? Consider accessibility issues and how you will overcome them.
3. Do you have a strong value proposition? This is the offer you are making a compelling one for the customer?
4. Can you satisfy the customer expectations in this particular location?
5. In the eyes of your customers, is there any competition in that market that can block you out of this market?
6. If you win this market, can it give you sufficient capability and credibility to occupy other markers later on? What is the role of this market for the longer-term strategy of the company?
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