11 Catalyst Strategies Identifying and Catalyzing Growth Opportunities Locking on to Your Competitive Advantage and Market Position Bullivant Houser Bailey’s Emerging Business Group Seminar Series February 24, 2010 “The essence of strategy is choosing what not to do.” Michael Porter

22 Two “SIMPLE” questions are critical to success What is the core reason why a prospect should choose your product or service? How will your company sustain higher growth and more profitability than competitors? Your “secret sauce” (a.k.a. Competitive Advantage) Your “market promise” (a.k.a. Point of Difference)

33 Success Story: Ning Market Promise Steps to Define Your Market Promise: 1. Define your target 2. Know them… understand their needs 3. Define their decision criteria 4. Distinguish between the market ‘ante’ and what can truly differentiate 5. Map your competitors 6. Pick the whitespace that meets criteria for a winning market promise Steps to Define Your Market Promise: 1. Define your target 2. Know them… understand their needs 3. Define their decision criteria 4. Distinguish between the market ‘ante’ and what can truly differentiate 5. Map your competitors 6. Pick the whitespace that meets criteria for a winning market promise “Ning is the social platform for the world's interests and passions online. Explore and express your interests, discover new passions, and meet new people around shared pursuits”

44 Criteria for a Winning Market Promise Single Minded Is there one point of difference, versus a collection or fusion of multiple ideas? Is the point of difference focused on one main problem or idea? Clear Is it obvious what is being promised? Easy to communicate? No jargon? Compelling Does the promise directly address a critical problem for the target buyers and influencers? Differentiated Can the point of difference be uniquely delivered by your company and not by major competitors? Believable Can your company prove the claims in your point of difference? Sustainable Can the positioning flex and evolve to continue to be relevant in future? Can your company own the differentiation over time versus being depend on short term or narrow advantages in features? Scalable Can this differentiation scale on a global basis (if relevant)? Must be:

55 Success Story: Ning Competitive Advantage Steps to Define Your Competitive Advantage: 1. Start with important attributes of your product/service 2. Distinguish between the market ‘ante’ and what can truly differentiate 3. Define the value to your company of key attributes 4. Select one customer benefit that comes from your unique attributes and value* Steps to Define Your Competitive Advantage: 1. Start with important attributes of your product/service 2. Distinguish between the market ‘ante’ and what can truly differentiate 3. Define the value to your company of key attributes 4. Select one customer benefit that comes from your unique attributes and value* Attribute (Product, Cost, Service, Distribution etc.) Value (to Company) Chosen Customer Benefit Bullet proof social networking platform Scalable, repeatable model Easily build your own social network *Don’t get hung up on how your competitors have won (e.g., Facebook)

66 Potential Competitive Advantages Cost Leadership Driving costs lower than industry norms based on efficiency, size, scale, scope Product Characteristic Differentiation Distinguishing products or services from others in the industry in a compelling way that attracts target customers Differences include quality, function, features, design Product Breadth Differentiation One stop shop – offering unmatched range of relevant products and services to target customers Distribution Differentiation Creating distinctive access or availability to products or services via unique distribution relationships, channels, or capabilities (e.g., direct marketing) Niche Market Dominance Outperforming competitors in a narrow market segment Advantage can be achieved via segment-specific offerings, services, servicing levels or model, etc. Customer Experience Differentiation Delivering uniquely streamlined, direct, proactive, consistent customer experience for critical customers interactions

77 Key to Success: Integrating Your Competitive Advantage and Market Position Ning “secret sauce” 1.9 Million Ning Networks 40 million registered users $750MM valuation Ning “market promise”

8888 About Catalyst Strategies

99 Catalyst Strategies Catalyzes commitment to the actions that deliver tangible market results Serves technology and services companies Identifies and catalyzes growth opportunities

10 Clients

11 Services Solidify Your Growth Strategy Innovate and Differentiate Products Transform Your Customer Experience Accelerate Marketing and Sales