1 Industry Analysis Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado.
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1 Industry Analysis Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado
2 Industry Analysis Tonight's Agenda Topics Industry Analysis Competitive Advantage Value Chain Read BP pp 11-13, 27 Business Model Assignment In the Fire & Hand-in Opportunity/Need Value Proposition http://gizmodo.com/gadgets/gadgets/tifinity-titanium-toothbrush- like-a-metal-scouring-pad-for-your-teeth-235314.php http://gizmodo.com/gadgets/gadgets/tifinity-titanium-toothbrush- like-a-metal-scouring-pad-for-your-teeth-235314.php http://gizmodo.com/gadgets/gadgets/tifinity-titanium-toothbrush- like-a-metal-scouring-pad-for-your-teeth-235314.php
3 Industry Analysis Next Week Topics Product/Service Features & Benefits Margins Elevator Speech Investor Presentations Read BP pp 6-7 Practice Elevator Speech In the Fire Preliminary Market Analysis Results Preliminary
4 Industry Analysis Business Model Present March 14 PowerPoint 10 minutes, 10 slides Hand-in 3 ring binder Market Analysis - draft Industry Analysis - draft Product/Service Description - draft Value Chain analysis Competitive matrix Financial COMP’s Revenue Model 20 interview Call Reports
5 Industry Analysis Market & Industry Market: “group of current and potential customers having the willingness and ability to buy product/services to satisfy a need.” Industry: “group of sellers that offer product/services that are similar and close substitutes for one another.” JW Mullins, New Business Road Test
6 Industry Analysis Market & Industry Section Market Market Market size & growth Trends Target Market Channels of distribution Industry Industry Structure Competitive Environment Competition Opportunity
7 Industry Analysis Industry Structure Organization – how & where are products/services produced and delivered? Supply chain
8 Industry Analysis Sources Suppliers Manfg Distrib Retailers Consumer Goods Information Funds A T Kearney, Integrating the Supply Chain Supply Chain Supply Chain
9 Industry Analysis Competitive Environment How do companies compete – quality, price, new products, customer service Degree of rivalry Response to new entries
10 Industry Analysis Control Setting prices – bargaining strength of customers Lowering costs – technology, process design, resources, bargaining strength of competitors Channels of distribution – access, creating new channel
11 Industry Analysis Barriers to Entry? Economies of scale: manufacturing, marketing, technological Customer loyalty: well established brands, long established relationships Agreements with customers, suppliers, strategic partners Switching costs Capital requirements: high investment
12 Industry Analysis Barriers to Entry (continued) Access to distribution channels: exclusive distribution agreements, dominant position of competitors Intellectual property: patents, trade secrets, copyrights, trademarks, know-how Government regulations: defense contracts, import restrictions Industry hostility to new entrants. Will use all means to drive out new competition: pricing, legal, spreading rumors
14 Industry Analysis Opportunity Last section Make case attractive opportunity - validate Draw conclusions based on your research, interviews and customer surveys
15 Industry Analysis A Model of Competitive Advantage Resources Distinctive Competencies Capabilities Value Creation Cost Advantage or Differentiation Advantage
16 Industry Analysis Identify Your Resources Financial: access to capital (equity & debt), cash reserves, government grants, etc. Physical assets: plant & equipment, raw materials, location, working capital, etc. Human: social, employee knowledge, experience, accumulated wisdom, labor cost and skills, etc. Intangible: patents, trade secrets, know-how, copyrights, databases, etc. Organizational: culture, contacts, policies, Boards of Directors & Advisors, suppliers, service providers, etc.
17 Industry Analysis Identify Your Capabilities World class management (serial entrepreneur) Network - well developed, high-quality, accessible contacts that take years to build Marketing - differentiation, branding, positioning Product/service - design features & benefits Sales & distribution - rep organization Total operational approach - Dell, Wal-Mart Supply chain management - Asia contacts Relationships - regulators, politicians, investors
18 Industry Analysis What Barriers Can You Establish? Intellectual property: patents, trade secrets, copyrights, trademarks, etc Switching costs to your target market Customer loyalty Agreements with customers, suppliers, strategic partners Control of the distribution channel
19 Industry Analysis Competitive Advantage Challenges Intellectual property Agreements with customers or suppliers Long term contracts Control of costs Control of prices Control of channel Location Differentiation First to market World class management Expertise Development lead time Brand Quality Service Execution Relationships
20 Industry Analysis Sustainable Competitive Advantage Understand the market Understand the competition Differentiation Innovation Resources & capabilities Really understand the market & competition Why is this so hard?
21 Industry Analysis Competitive Advantages Difficult to Achieve & Sustain Most are easily copied Entrepreneur ignorant of or ignores competition Entrepreneur is not realistic about own resources & capabilities Entrepreneur ignores future Entrepreneur must be intellectually honest
22 Industry Analysis Market, competition, resources, and capabilities are continually changing. Sustaining Competitive Advantage Is a Dynamic Process