No firm could possibly pull this off.įigure 5.24: This illustration from 1887 captures the lesson of Aesop’s fable “The Miller, His Son, and Their Ass”-a lesson that executives need to follow. Michael Porter has noted that strategy is as much about executives deciding what a firm is not going to do as it is about deciding what the firm is going to do (Porter, 1996). In other words, a firm’s business-level strategy should not involve trying to serve the varied needs of different segment of customers in an industry. Doing Everything Means Doing Nothing Well The chain’s same-store sales have increased in each of the past three years, including 4.3 percent in 2011 and 2.8 percent in each of the past two years (Maze, 2014). Products were removed from the menu that didn’t drive enough sales and were either too complicated to prepare or took up too much space. The company had struggled with weak sales for years and blamed leadership changes, inconsistent brand positioning, reduced service levels, underinvestment, and limited product innovation.Īrby’s has since added several menu items and taken almost a dozen offerings away. Figure 5.23 Stuck in the Middle Īrby’s has turned its sales around in its three years as a private chain. Arby’s senior vice president of finance said that the brand had “lost its way” when owned by Wendy’s from 2008 through 2010. Perhaps not surprisingly, parent company Wendy’s sold Arby’s in 2011. Firms that are stuck in the middle generally perform poorly because they lack a clear market or competitive pricing. Arby’s signature roast beef sandwiches are neither cheaper than other fast-food sandwiches nor standouts in taste. A firm is said to be stuck in the middle if it does not offer features that are unique enough to convince customers to buy its offerings, and its prices are too high to compete effectively based on price ( Figure 5.23 “Stuck in the Middle”). Some firms fail to effectively pursue one of the generic strategies. Stuck in the Middle: Neither Inexpensive nor Differentiated Understand why trying to please everyone often creates problems when crafting a business-level strategy.Describe the problem of being stuck in the middle of different generic strategies.
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