Thinking of starting a business but don’t know how to create a foolproof strategy?
Begin your entrepreneurial journey by taking as much advice as possible from successful companies in your niche, and then determining whether to develop a long tail or blockbuster business strategy.
While both offer unique advantages, it’s important for you to understand how they work and which one suits you and your business best.
For a detailed explanation of each strategy and examples and success stories that will inspire you to help you make the right decision for your business, read on.
Related article: 5 Powerful Lessons From the World’s Top E-commerce Companies
Long tail business strategy – what is it?
Long tail businesses offer smaller amounts of a variety of sought-after products to a niche market rather than bulk producing generic items. While generic products might sell on a much larger scale, their margins are much smaller.
Long tail businesses offer smaller amounts of a variety of sought-after products to a niche market.
Related article: Four Reasons Luxury Retail Is Booming In The Middle East
Example of a successful long tail business model:
Amazon and Ebay are probably the best global examples of a long tail strategy that have worked incredibly well.
The Ebay site provides consumers with a variety of niche products that are expensive, and because the products are often challenging to come by, the seller can name their price. There are 135 million eBay users worldwide and the app is used by 3.67 million users in the US every month. Ebay’s net worth as of May 09, 2023 is $24.7 billion.
Ebay is one of the best global examples of a long tail strategy that now has over 135M worldwide users.
Long tail business strategy – is it for me?
If you’re wanting a business that offers lower marketing and distribution costs, then the long tail approach is your best bet. Most long tail businesses have digital platforms (no need for storage), and because the products are so specific, advertising space is readily available.
For a business that offers lower marketing and distribution costs, the long tail approach is your best bet.
Blockbuster business strategy – what is it?
The blockbuster strategy is the opposite of long tail. Instead of providing a selection of niche products, blockbuster business owners opt to put their eggs in one basket. This means investing in one idea and giving it your all. Including all of your capital. It’s a high risk strategy, but as the saying goes, it can result in a high reward.
Related article: How To Use Social Commerce To Maximize Sales For Your SME And Beyond
A blockbuster business means investing in one idea and giving it your all. Including all of your capital, which can result in high rewards.
Example of a successful blockbuster strategy:
A typical blockbuster strategy can be seen in the release of an actual blockbuster, such as Marvel’s Deadpool. The creators of this film had to be 100% sure that the film would do well. They then hired the best cast, performed expensive (albeit brilliant) stunts, and went all in. On a scale of one to high-risk, this blockbuster game plan is off the charts. But then again, so is the profit. It cost $324 million to create the movie, but total revenue exceeded $600 million.
P&G is also famous for their blockbuster business model. Their innovation drives new brands and blockbuster new sub-brands like Head and Shoulders. It’s the leading shampoo in the world with over $3 billion in retail sales and is the fastest growing brand in the shampoo category over the last 10 years, growing 5% annually.
P&G’s blockbuster business model has big brands like Head and Shoulders, the #1 shampoo in the world for the past 10 years, growing 5% annually.
Blockbuster business strategy – is it for me?
If you’ve got a good funding plan, a game-changing idea, and all the know-how (or at least the ability to hire people with unbeatable knowledge in your chosen field), the blockbuster blueprint is for you. You’ll need to have full confidence in your plan, and you’ll have to create a detailed strategy.
A long tail business strategy sells fewer products to a specialised market, whereas a blockbuster business approach aims to be the only company that is selling one product or service.
Both long tail and blockbuster business strategies can result in successful businesses. It’s up to you, as a business owner, to determine whether your idea fits the strategy’s mould, you have the capital to fund it, and if you have the resources to make it work.