Chapter 5: Reading and Beating the Competition – Finding Marketplace Gaps Learning Objectives: Define competition in terms of size, growth, profitability, innovation, and market leaders Discover your Target Customer’s competitive touchpoints Understand the value of positioning in relationship to competitors and Target Customers Evaluate competitors using primary, secondary & “new eyes” research Develop skills to become the best marketplace detective you can be Evaluate the competitive landscape broadly Develop a competitor matrix Create uniqueness to compete Develop skills to become a lifelong scanner of the competitive landscape Prosper in a rapidly changing competitive marketplace

Why The New Market Research? Changes in the way businesses view competition Fierce competition Speed of information and change Accelerated product life cycles Too many companies and too few consumers Pace of new product offerings

Who Is Your Competition? Your competition is not necessarily who YOU think it is: Direct and Indirect Your customers define the competition in terms of those who can best satisfy their needs and wants Your invisible competitor may not be anywhere on your horizon and may only appear after you are successful

Competitor Profile Elements Company Identification: Legal Name & Contact Info. Organization & Ownership Culture & History Environmental Forces: Ability to respond to change International issues Competitive advantage Five Forces Analysis Credibility & Assets of the Firm: Size, Stability Reputation & Credibility Proprietary Assets Operational Capability Internal Resources & Abilities Outside Assets Product Design / Services & Innovation: Product or Service & Design Product Life Cycle Revenue: Sales & Market Share Market Strategy: Target Markets Key Players: Key Employees Board of Directors Management Team Additions Financial Resources: Financial Statement Analysis Industry Averages

Action Step 28: Evaluating Customer Touchpoints Investigate your customer’s perception of the competition Walk through purchasing your competitors’ products with a group of your target customers Identify customer touchpoints Ask the target customers to rank the five most important touchpoints Decide which touchpoints are worth competing for Capitalize on the touchpoints that make you stand out in a crowd in your Business Plan

What is Competitive Intelligence? Competitive Intelligence is: Information that has been analyzed to the point you can make a decision A tool to alert management to both threats and opportunities A means to deliver reasonable assessments of the market and the competition Comes in many flavors and can mean many things to many people A way for companies to improve their bottom line A way of life, a process Part of all best-in-class companies Directed for the executive suite Seeing outside yourself Both short and long term Competitive Intelligence is Not: Spying – that implies illegal or unethical activities A crystal ball – it does not predict the future A database search – databases do not analyze data The Internet or rumor chasing – be selective in the content you use Paper – try to focus on face to face discussions or phone calls A job for one smart person An invention of the 20th century – it has been around for a long time Software A news story A spreadsheet

Continue Scouting the Competition Awareness of your competitors’ strengths and weaknesses will increase your confidence Become your competitors’ customer: Review their websites and join the loyalty programs Visit their stores at several times of day Call their 800 numbers Purchase items and investigate how they are made Research public records Talk to potential suppliers Attend trade shows and ask questions

Secondary Research Sources and Reports Review speeches, TV and radio programs, podcasts, blogs, government documents Attend workshops and conferences Use the Internet but don’t believe everything you read MarketResearch.com Science and Technical Information network Online networks and competitor websites Library and Internet References for companies and industries Educator’s Corner

Action Step 29: Scouting Competitors and Finding Your Position on the Competitive Ladder Complete secondary research on competitors – the more you find the more you learn Develop a competitor review sheet for each competitor Start snooping

Global Village: ISO in Brief International Organization for Standardization Network of national standards in 164 countries Forms a bridge between the private and public sectors Solutions that meet the requirements of business and the broader needs of society Standards provide technological, economic and societal benefits A lack of standards would hinder many aspects of production and trade and even the quality of life

Competition and Positioning Three Value Disciplines to Distinguish Yourself: Operational Excellence Product Leadership Customer Intimacy Focus on a value that sets you apart from your major competitors Use your positioning strategy to distinguish yourself Perform a SWOT analysis

Competition and the Product Life Cycle The Embryonic Stage High failure rate, costs and sales prices Low sales volume and no competition The Growth Stage Product innovation and brand loyalty Peaking profits and strong competition The Mature Stage Peak customer numbers and a concentration of product differentiation Decreasing prices and heavy competition The Decline Stage Extreme depression in the marketplace Going out of business sales and fight for remaining core market

Competition And Positioning In A Mature Market Change in the arena can spell opportunity Discover an area of vulnerability Beat the competition with superior service Create a new arena Create uniqueness by continually changing your product or service

Action Step 30: Construct a Competitor Matrix List major competitors on the vertical axis List important benefits to your Target Customers and elements for success on the horizontal axis Rank each competitor on a scale of 1 to 10 Rank your new venture and rate yourself You may find an underserved market You will have an excellent overview of your competitors and your opportunities

Create Uniqueness Through Change Always be ready with Plan B You can do it! Know your business, Target Customers and competition Know the benefits of your product or service Develop strategies to capture & maintain your position Give free rein to your creativity – surprise your Target customers and yourself! Passion: A Green Landscaping Company Focused on Strong Relationships

Think Points for Success Know your niche Disarm the competition by being superior, safer, or more user-friendly Remember that a new firm seldom can win a price war Know that old habits are hard to break; provide your target customer a compelling reason to switch Develop your own monopoly Talk to your target customer constantly and truly listen Thrive, just don’t survive! Do it smarter Do it faster Do it with more style Provide more features Adjust your hours Provide more service Treat your target customers like family; consider their needs Be unique Change the arena through innovation