1. The Competition 1

2. 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. 2

3. 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 3

4. 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.? 4

5. 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.? 5

6. 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

7. 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

8. 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

9. 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.

10. 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.

11. 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

12. 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

13. 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.

14. 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)

15. Risk What kinds of risk?  Market risk  Competitive risk  Technology risk  Product risk  Executive risk  Capitalization risk

16. Balancing Risks and Opportunities SWOT analysis StrengthsWeakness OpportunitiesThreats

17. Marketing plan & Sales strategy Tell the customers what they get Not what you do.

18. 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.

19. 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  ….

20. 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.

21. Marketing vehicles Brochures Company Website Print media Broadcast media Online advertising Advertising specialties Direct mail Email Public relations Sampling Informal marketing/networking

22. Marketing tactics Strategic partnership  Cooperative advertising  Licensing  Distribution agreement  Bundling

23. Sales activities Sales personnel  Inside sales personnel  Outside sales personnel Sales process  On site  Mail order  Telephone  On line  Third party

24. 24 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 24