1. Business Plan Preparation
Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado
Competitive Advantage

2. Competitive Advantage
Tonight’s Agenda
Opportunity/Need
Financial COMP’s
Model Company
Customer Research
Importance of validation
Locomotion Business Plan
Elevator Speech
Hand-in Interview list
Competitive Advantage

3. Competitive Advantage
Next Week
Value Proposition
Business Analysis Assignment
Elevator Speech
In the Fire – Opportunity/Need
Competitive Advantage

4. Competitive Advantage
Opportunity/Need
What is the pain?
What problem is being solved?
Dissatisfaction with current products/services
Poor quality or service
Must be compelling
Must be easily understood by TM
Must provide validation
Competitive Advantage

5. Competitive Advantage
Financial COMP’s
Company in your marketplace.
NAIC code
Publicly traded
Industry ratios – see Selected Resources Guide Library
Key financial measures to compare when developing strategy and projections
Reality test
Competitive Advantage

6. Competitive Advantage
Financial COMP’s
Competitive Advantage

7. Competitive Advantage
Model Company
Identify company in your marketplace
Different segment, products, target market
Has done just what you want to do
Provides credibility
Competitive Advantage

8. Customer Research Revisited
Do customers recognize that they need your product/service?
Are features compelling?
Criteria for buying decisions? Who influences the decision?
How much will they pay?
Why would they not buy?
Do they understand the benefits?
Competitive Advantage

9. Customer Research Revisited II
Conduct 20+ interviews with users, buyers, distributors
Basis for questions should be George Deriso’s Qualitative Customer Survey
Questions will change as you learn more about the customer
Competitive Advantage

10. Competitive Advantage

11. 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.
Competitive Advantage

12. 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
Competitive Advantage

13. 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
Competitive Advantage

14. Competitive Advantage Challenges
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
Competitive Advantage

15. Sustainable Competitive Advantage
Sustainable Competitive Advantage
Understand the market
Understand the competition
Differentiation
Innovation
Resources & capabilities
Really understand the market & competition
Why is this so hard?
Competitive Advantage

16. Competitive Advantages
Competitive Advantages
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
Competitive Advantage

17. Sustaining Competitive Advantage Is a Dynamic Process
Market, competition, resources, and capabilities are continually changing.
Competitive Advantage