Do You Know What Business You’re In?

Here is an important question to ask yourself as well as your entire staff: “What business are we really in?”

For example: Are you in the trucking business or the transportation business? Are you in the home health care business or are you really in the staffing business?

This is the advice given by Theodore Levitt, a scholar renowned as a founder of modern marketing over 50 years ago:

The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, and airplanes), but because it was not filled by the railroads themselves.

They let others take customers away because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad-oriented instead of transportation-oriented; they were product-oriented instead of customer-oriented.