We call this the HIHF report: H for highlights, I for insights, H for hindsights, and F for foresights. This format was developed by fellow ACE guru Ed Morato. Highlights are significant things that happened. Insights are lessons learned from the highlights. Hindsights refer to how the insight provided an understanding of what was unexplainable in the past. Foresights are "therefore statements". These are resolutions on what to do from now on. This thinking process allows the student-entrepreneurs to learn how to learn on their own.
I am sharing parts of one such monthly report, which might prove helpful to our readers. It shows the process and its benefits. This HIHF was prepared by an ME student who was in the middle of the quality, delivery and productivity or QDP module.
Here are excerpts from the monthly report:
…Oct. 21, 1996 (Monday) marked the opening of our second outlet. It has a selling area of about 1,000 square meters and a 200 meter parking lot up front. Like any contender, we had to prove that we had something better to offer versus existing competition. There was a smaller outlet right in front of the public market, about 100 meters away. I still recall the opening day. We had a grand parade around town and we gave away balloons like St. Nick. The store was full and people were buying as though tomorrow would never come.
…Oct. 22. The store had little traffic. Like any businessman who trusted his guts more than anything else, this was a red flag. What if this trend continues? How long can I stay afloat? What must we do to salvage the situation? We had so many questions with few answers.
…Our worst nightmare–we were practically empty in succeeding weeks. We started snooping around and realized that our competitors had reduced prices. The price war began. We had no choice but to lower our prices and swallow the bitter pill of a longer payback. The battlefield was like quicksand. All major players were in it and whoever stayed above ground longer would survive. Or, would they really?
…Survival is not only a matter of staying above ground longer but also of getting out of the quagmire. Obviously, all of us are bound to sink. It is not only a question of who stays unsinkable longer but of who actually gets out and changes the playing field to another level. It has been almost seven years since we got into the business and two other major players have closed shop. The challenge of changing the playing field is the long-term solution, and the player who can break the code emerges as the true victor.
…In a recent QDP analysis, the needs of our customers were highlighted. How well we delivered these needs was also challenged. In brief, we realized that we had not been delivering the needs of our customers in the following areas:
• Proper pricing information. Ever since we adjusted the barcode system, we always thought that a price card would suffice in relaying the information on price. Wrong! Consumers do not trust the price card simply because it could either be misplaced and would not be correctly matched with the product or that it might not be updated. Consumers will always ask how much a product costs if it does not have a price tag. The failure point arises when no one is there to address his/her concern. In other words, price is needed at that point when a customer is holding the product! Information is only relevant at a certain time that it is relevant to the consumer.
• Variation of pricing needs. One of the reasons why a bottleneck exists in the candy and junk food section is that no one was equipped with information on price-per-piece or tingi. A typical sari-sari store needs the price-per-piece to determine if the product’s selling price will fit the store’s line pricing structure.
• Personnel focus. While running the QDP survey, we also conducted an inventory of personnel that morning. With 11 salesladies and 38 merchandisers, all were busy refilling the shelves and none were available to attend to customer inquiries/concerns. This we observed as a major flaw. The products we sell are means of gaining profit and the consumer is the source of profit.
• The basics. In certain lanes, particularly on lane #6 of the store, product shelves were far too high to be reached by customers, who would inevitably need assistance to access the items. Therefore, we needed to redesign the shelving.
…In a nutshell, the old mode of using price as a service differentiation strategy is no longer the name of the game. The QDP analysis clearly tells us how we should process our customers’ needs and produce quality-delighted consumers.
From the above, it is evident that if this student-entrepreneur’s competitors do not change their paradigm, they will follow the fate of the two who have already closed shop. The former has learned to change the rules of the game. And because of this, he will continue doing so and will leave behind (perhaps to die) those who cannot follow suit. This student-entrepreneur is an example of how HIHF works. And when this happens to many, an ACE guru cannot but be contented, relishing that sense of fulfillment which accompanies every successful transfer of a learning process.
(Alejandrino Ferreria is the dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further comments and inquiries, you may contact him at: ace@aim.edu.ph. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www.aim.edu.ph).