Knowledge @ Wharton published an excellent discussion piece on the importance of understanding ones customers’ philosophical outlook. The authors cite a number of examples in which companies are successful by understanding the cultural trends impacting their customers. Starbucks, Google, Whole Foods, and Chipotle have all figured this out.
This may sound trivial, but a lot of analysts spend too much time understanding the numbers or looking at the technology advantages of businesses, where in fact the recipe for success lies in the management team. A management team that truly and introspectively knows their market is the winning team, in any segment. "Bet on the jockey, not on the horse."
I've spent the past few weeks reviewing an industry in which very few of the players actually have a clear understanding of what their direct customers are looking for. The industry is hyped on the fact that the direct customers' customers show increasing demand generally, but no one seems to have taken the time to really understand the market dynamics and consumer motivations. I will definitely recommend this article to the next few CEOs I speak with.
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