Sunday, October 16, 2011


Kraft announced that it was splitting up; separating its groceries from its snacks, 18 months after acquiring the candy giant, Cadbury.  Or as this article puts it;
"The plan, which would create a $32 billion international snacks business, including Cadbury, Oreo and Trident brands, and a $16 billion North American grocery business, which will include Kraft Macaroni and Cheese, Oscar Mayer, Philadelphia, Maxwell House, Jell-O and other non-snack brands, seems to be a financial move, designed in part to please activist investors who have called for the company to separate its high-growth global snack brands from its slower-growing, more mature grocery brands. But it also holds lessons for multinational marketers, looking to drive value in fast-growing emerging countries."
Basically,  for small businesses this is a very interesting and hopeful trend among dominant players in particular industries.  It is an acknowledgement that sales growth in the future will occur in emerging countries and that the United States is a mature market.  It also acknowledges that globalization does not bode the end of local and or regional differences; most of what Kraft considers to be brands with international appeal are thus because they do not require refrigeration and or further preparation.

This  will create a tremendous amount of opportunities for small businesses as it will create niches; or segments of a market/industry that are under served.  No dominant player in a market and or industry can be everything to everyone, and that can create opportunities for small businesses.

Being small or specializing can be intimidating; its hard to fathom, in a world of Facebook, Walmart, and Wall Street, how one can be successful as a small, niche provider of a service and or a product.  But remember, in less than four weeks, the Occupy Wall Street protests have expanded from NYC to 951 protests in 82 different countries.

Serving a niche market in an era of "too big to fail," a term that applies to so many companies in a variety of industries today, has natural barriers of entry or moats.  Serving a niche market in an era of "too big to fail" is also a great way to establish and ensure consumer loyalty; there is only brand recognition when one is everything to everyone but their is product loyalty when one is special to a few.

Niches are nothing more than obvious communities; a term in vogue in the "changing the world" mentality of the innovation leaders of social media and the internet.  Niches, just like communities, can be defined by geography, demographics, or shared interests.

In a world where companies are accustomed to annual sales of hundred of millions of dollars a year, or billions a year, a niche market that can generate millions in sales is just something that they cannot exploit to their benefit.  Regardless of how obvious, how logical, and or how profitable.  Thus, "too big to fail" becomes a barrier of entry!

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