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Last Update: Thursday December 14, 2017

Key Idea: Collaborate With Colleagues

Collaboration is better for small business than competition because we
specialize in a niche. This means customers can easily be shared.   Rather than seeing other cheese makers as a competitor, Paul sees each of them as a collaborator. Together, they can give a customer every type of cheese they could possibly want.

Key Question:

A: 

Try an in formal think tank of colleagues.

Q:  Why is it a bad idea for a small business owner to try to compete with every other small business owner in the industry?

A: There's not enough time and money to compete and so much opportunity to share. Here  we learned about the specialty shops in an historic business district that share their mailing lists and together publish a newsletter. This would be very expensive for a one-business owner but cheap when they do it together. They have one customer who buys in many shops and they know it. This way they spend their money getting that shopper to come to their district instead of the big malls. As a group, these merchants see themselves competing with the mall, not each other.

Q:  What new product came out of Paul's affiliation with other cheese makers?

A: Just The Cheese.

Q: Describe the packaging dilemma they faced with Just The Cheese.

A: With a clear package, consumers could see the chip and couldn't believe it was all cheese. And, it took several iterations for Paul and Vickie to get the insight that seeing the chip first was a bad idea.

Think about it

What other small business owners do you admire and try to learn from? With whom could you form a collaborative relationship? Do you know the other owners in your industry?  

Clip from: Specialty Cheese

Lowell, Wisconsin:  Visit the oldest continuously-running cheese factory in Wisconsin.  In this episode of the show we meet Vicki & Paul Scharfman of Specialty Cheese. This story is about marketing. It may look like magic, it's not.  It is all about testing, trial and error, and focus groups.

Prepped with their Harvard MBAs and seasoned with big business experience, these two bought a marginal business and turned it around.  They learned how to put diversity into the land of cheddar and attracted a whole new customer base.  This is America!

Go to all the key ideas and video of this episode...
Go tot he hompeage for this episode of the show...

Specialty Cheese, Inc.

Paul Scharfman, Owner

430 North Main Street
Reeseville, WI 53579

Visit our web site: http://specialcheese.com

Toll Free: 800.367.1711

Business Classification:
food

Year Founded: 1839

Collaborate With Colleagues

PAUL: The competitive model for industry breaks down in small business. We ought to be more collaborative than competitive, and as a business we believe in that and--and try to do that. We try not to copy our competition but to innovate. We try to build markets. We try to work with our partners and our suppliers and our companies around us. We try to find win-wins all the time. As the biggest meat and--processed meat-maker, Oscar Mayer, it's really hard to collaborate with the number-two guy. We're competitors. We got all the staff, we got all the plants, we are competitors.

HATTIE: Right. PAUL: The little local cheese-maker down the street, who's making Colby, and I--other than the fact we're both buying raw milk, we might as well be in different businesses. We are not competitors.

HATTIE: So we should change the way we think about that word `competition'?

PAUL:  Yes. Small businesses collaborate with each other profitably. They don't compete with each other profitably. There's just not enough there.

HATTIE: By brainstorming with other cheese-makers, Paul and Vickie came up with their newest product.

PAUL: The idea was cheese and crackers without the crackers. People love cheese they like crackers, they want cheese that crunches. I said, `Super. I know how to do this.' And Ludwig and I went back--and Ludwig figured out how to do it. And I came up with the Real Cheese Crinklies in a simple deli tub and I went out and I said, `Don't you love it, consumers?' And the only good news is that I hadn't invested in labels because they said, `Wrong.'

VICKI: Right. Bronx cheer.

PAUL: OK. So I took this and I said, `Oh, fine. I know, I'll change the name. I'll change the color of the label. It's not Real Cheese, it's Just The Cheese. (Makes buzzer noise)

HATTIE: Still not working?

PAUL: So then we said, `Uh, we'll change the shape of the box. How about this package?'

VICKI.: And the product inside. `How do you like the product?'

PAUL: How about this--Vickie--how about a little, cute box? How about a sleeve around the box? We learned here this is a pretty box.

And I can see those chips in there.

HATTIE: It's too pretty.

PAUL: Whatever that is, here's a cheese wedge and I can see the chips. Here's a pie plate; I can see the chips. You know what I learned?

HATTIE: What?

PAUL: I was dead wrong from the beginning. Consumers don't want to see the chips because once they see the chip, they don't believe it's cheese. And that led to the insight, `No, no, no. First say it's cheese, and then let them see the package.' HATTIE: Right.

PAUL: Consumers told us to first say it's cheese and then open up the window. First, say it's cheese--whatever the flavors are, different colors and then open up the window and then--oh, I see, there's chips.

HATTIE: Now that the Atkins diet is popular again, they can't make enough to supply the demand. To order Just The Cheese, Crunchy Baked Cheese go to specialcheese.com.

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