the competition 1. know your rivals if you have no competition, there may be no market for your...
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The Competition
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Know your rivals
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 When doing your competitive analysis, focus
on identifying this:
1. Who your major competitors are
2. What basis you compete (what features)
3. How do you compare?
4. Potential future competitors
5. Barriers to entry for new competitors
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Market Share Distribution
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.?
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Barriers to Entry
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 What you do What you don’t do
Your strategic position should be where you find following coming together: Your strengths and interests Industry trends and developments Market changes and opportunities Competitive changes and opportunities Changes and opportunities brought through new
technologies
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What kinds of strategic positions are there? Customer perception factors Market segment Market share Operational/technological advantages Proprietary products, technology, abilities or
relationship Sale channel
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What kinds of strategic positions are there? Customer perception factors
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.
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What kinds of strategic positions are there? Market segment : This strategy is based on
targeting on a specific portion of the total market.
Pitfalls of this strategy: 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.
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What kinds of strategic positions are there? 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
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What kinds of strategic positions are there? First mover strategy has some advantages:
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
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Two popular strategy
First mover disadvantages: 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.
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Two popular strategies
Branding strategy has many advantages but: 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)
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Risk
What kinds of risk? Market risk Competitive risk Technology risk Product risk Executive risk Capitalization risk
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Balancing Risks and Opportunities SWOT analysis
Strengths Weakness
Opportunities Threats
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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: Marketing is designed to increase customer
awareness and deliver a message. Sales is the direct action taken to procure
customer order.
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Your company’s message
Company’s message is based on the strategic position: Low price leader One day service The choice of a new generation ….
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The 4 P’s of marketing: 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.
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Marketing vehicles
Brochures Company Website Print media Broadcast media Online advertising Advertising specialties Direct mail Email Public relations Sampling Informal marketing/networking
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Marketing tactics
Strategic partnership Cooperative advertising Licensing Distribution agreement Bundling
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Sales activities
Sales personnel Inside sales personnel Outside sales personnel
Sales process On site Mail order Telephone On line Third party
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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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