Transcript File - Class resources and updates

The Competition
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Know your rivals
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If you have no competition, there may be no
market for your concept OR you have not
done your homework.
Know your competition to learn from them
and to better understand what customers
want.
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Knowing competition makes
strategy
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5.
When doing your competitive analysis, focus
on identifying this:
Who your major competitors are
What basis you compete (what features)
How do you compare?
Potential future competitors
Barriers to entry for new competitors
3
Market Share Distribution
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How large is the industry? Okay, now how
large is your market?
What is the market share distrbution among
competitors?
What tangible and intangible resources to the
market leaders have? Ex. Strategic
partnerships, reputation, quality, good design,
etc.?
4
Barriers to Entry
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If you succeed, what stops others from
replicating your success and stealing your
market share?
Patents, high start-up costs (manufacturing),
Substantial expertise, tacit knowledge, etc.?
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Strategic Position &
Risk Assessment
SWOT helps you realize what business
you are in.
Helps you assess your risks and lets
investors know you have a clear-eyed
view of what you are getting into
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A strategic position define
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What you do
What you don’t do
Your strategic position should be where you find
following coming together:
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Your strengths and interests
Industry trends and developments
Market changes and opportunities
Competitive changes and opportunities
Changes and opportunities brought through new
technologies
What kinds of strategic positions are
there?
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Customer perception factors
Market segment
Market share
Operational/technological advantages
Proprietary products, technology, abilities or
relationship
Sale channel
What kinds of strategic positions are
there?
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Customer perception factors
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Price
Quality
Features
Customer service
Societal impact
Convenience
Concentrating on customer perception
factors is the most typical method of
attempting to differentiate yourself from your
competitors.
What kinds of strategic positions are
there?
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Market segment : This strategy is based on
targeting on a specific portion of the total
market.
Pitfalls of this strategy:
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The size market may not be enough to sustain or
grow the company
The target market may already be saturated with
specialists
Enough size but Larger company will come in and
compete with you.
What kinds of strategic positions are
there?
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Market share: this strategy is based on
establishing and commanding such a
dominant portion of the total customer base
that it becomes difficult for others to
compete.
The goal is to become “800 pound gorilla” of
a market
What kinds of strategic positions are
there?
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First mover strategy has some advantages:
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Capture significant market share before
competitors enter the market
Secure key strategic partners, making fewer
opportunities available to later competitors
Attract outstanding employees and management
Capture media attention
Look in financing sources, such as venture
capitalists
Two popular strategy
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First mover disadvantages:
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You serving as the R&D arm of copy-cat
companies
Maybe the market is not ready for you.
You pay the costs of educating the market and
marketing for other second or third to market
companies.
Two popular strategies
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Branding strategy has many advantages but:
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It is usually expensive
It is a time consumer process.
A real brand gives customers trust in your
products and services because you are
consistent in quality, price, service or
convenience over time. (e.g. McDonald)
Risk
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What kinds of risk?
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Market risk
Competitive risk
Technology risk
Product risk
Executive risk
Capitalization risk
Balancing Risks and
Opportunities
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SWOT analysis
Strengths
Weakness
Opportunities
Threats
Marketing plan &
Sales strategy
Tell the customers what they get
Not what you do.
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Marketing and sales although are closely
related, are two different activities:
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Marketing is designed to increase customer
awareness and deliver a message.
Sales is the direct action taken to procure
customer order.
Your company’s message
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Company’s message is based on the
strategic position:
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Low price leader
One day service
The choice of a new generation
….
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The 4 P’s of marketing:
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Products
Price
Place
Promotion
Most marketing strategists agree that people
buy benefits, not features. In other words
customers are more concerned about how a
purchase will affect their lives than about
how the company achieved those results.
Marketing vehicles
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Brochures
Company Website
Print media
Broadcast media
Online advertising
Advertising specialties
Direct mail
Email
Public relations
Sampling
Informal marketing/networking
For your marketing plan
1. Figure out your message and who you need
to get it to.
2. Find out what vehicles are best for your
business. Give me a list of 5.
3. Then, call and get prices.
4. Then, make a 12 month breakdown on when
you will pay, when you will market, and with
whom. Timing is everything!
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Marketing tactics
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Strategic partnership
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Cooperative advertising
Licensing
Distribution agreement
Bundling
Sales activities
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Sales personnel
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Inside sales personnel
Outside sales personnel
Sales process
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On site
Mail order
Telephone
On line
Third party
SWOT
Do risk evaluation and SWOT on p.128-129
 SWOT is due on next Monday.......................
 Wednesday’s class will be on Marketing Plan
 Marketing plan will be due on Wednesday
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