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

Identify Your Resources 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. Financial: access to capital (equity & debt), cash reserves, government grants, etc. Physical assets: plant & equipment, raw materials, location, working capital, etc. 2 Competitive Advantage

Identify Your Capabilities 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 3 Competitive Advantage

Barriers You Can Establish Intellectual property Switching costs to your target customer Customer loyalty Agreements with customers, suppliers, strategic partners Control of the distribution channel 4 Competitive Advantage

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 Intellectual property World class management Development lead time Brand Quality Service Execution Relationships 5 Competitive Advantage

Sustainable Competitive Advantage Differentiation Innovation Resources & capabilities Really understand the market & competition 6 Competitive Advantage

Competitive Advantages Difficult to Sustain Most are easily copied Must be intellectually honest Entrepreneur not realistic about own resources & capabilities Entrepreneur ignorant of or ignores competition Entrepreneur ignores future Market, competition, resources, and capabilities are continually changing 7 Competitive Advantage

A Model of Competitive Advantage Resources Distinctive Competencies Capabilities Value Creation Cost Advantage or Differentiation 8 Competitive Advantage