The collapse of Colorado Group – and more recently the decision to close 140 stores and sack more than 1,000 people – should drive home a very important lesson to start-up entrepreneurs about the importance of never losing site of your value proposition.
After announcing the latest round of closures, receiver Brendan Richards, had this to say about the state of the company.
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“What the brand is today isn’t what it started out as. Colorado has been something of a directionless journey.”
What he meant was that Colorado lost its way. It started out as an outdoor-wear store and then morphed into some sort of middle-of-the-road fashion retailer.
The owners of the business clearly thought they were broadening the chain’s appeal, but in the process they lost sight of their value proposition – the reason people bought their products rather than their competitors’.
Value propositions must be constantly reviewed in light of growth. You might be getting bigger, but are you sticking to what made you successful?
Value propositions can and should be adjusted as markets change, but as Richards says, there are few bigger problems than being “directionless”.
Review your value proposition – today!