1. Week 6 Competition and your customer survey
Entrepreneurship
Week 6
Competition and your customer survey

2. Your competitors will use one of these 7 strategies
Competitive Strategy
Your competitors will use one of these 7 strategies
Lower costs -
High barriers to market entrants – high costs to start a business
High switching costs – customers have long contracts
New products or services –
Special products or services –
Alliances -
Size – no room for the competition

3. Competitive Strategies – Restaurant
Which of these 7 competitive strategies does McDonalds use?
Lower costs -
High barriers to market entrants – high costs to start a business
High switching costs – customers have long contracts
New products or services –
Special products or services –
Alliances -
Size – no room for the competition
If you were starting a restaurant in Nizwa, how could you compete against McDonalds?

4. Competitive Strategies – Restaurant
Competitive response to McDonalds
Lower prices - Many meals for less than 2 OR (profit?)
New products or services – 3 traditional Omani meals
Special products or services – 3 food items for children
Alliances - location near Nizwa Souq

5. Competitive Strategies – restaurant
Example Survey to find customer demand
Lower costs - Many meals for less than 2 OR
New products or services – 3 traditional Omani meals
Special products or services – 3 food items for children
Alliances - location near Nizwa Souq
Possible questions
I will offer a lamb kebob and rice meal for Do you like that price?
I will offer a chicken and rice meal for Do you like that price?
I will have chocolate milk for children. Is that important to you?
I will have baklava. Do you like that?
I will have camel milk chocolate. Would you like that?
I plan to open the restaurant near the Nizwa Souq. Is that a good location?

6. Competitive Strategies – children’s clothing store
Which of these 7 competitive strategies does Lulu Hypermarket use for clothing?
Lower costs -
High barriers to market entrants – high costs to start a business
High switching costs – customers have long contracts
New products or services –
Special products or services –
Alliances -
Size – no room for the competition

7. Competitive Strategies- Children’s clothing store
Competitive responses to Lulu Hypermarket clothing –
New products or services – more kinds of children’s clothing, more sizes
Special products or services – imported brands
Alliances - store location next to ice cream shop

8. Competitive Strategies – Children’s clothing store
Example survey to determine customer demand
New products or services – more kinds of children’s clothing, more sizes
Special products or services – imported brands
Alliances - store location next to ice cream shop
Possible questions
What size children’s clothing do you usually buy?
Do you often buy shoes to match an child’s outfit?
Do you like the Carter’s brand for children’s clothing?
Do you like the Oshkosh Bgosh brand?
What is the most you would spend for a girl’s dress?
What store location would be most convenient for you?

9. Competitive Strategies – Flower Shop
A flower shop exists in the Nizwa Mall. Which strategies do you think the store owner probably uses?
Lower costs -
High barriers to market entrants – high costs to start a business
High switching costs – customers have long contracts
New products or services –
Special products or services –
Alliances -
Size – no room for the competition

10. Competitive Strategies – Flower Shop
What would be a good Competitive Response?
Lower costs -
High barriers to market entrants – high costs to start a business
High switching costs – customers have long contracts
New products or services –
Special products or services –
Alliances -
Size – no room for the competition

11. Competitive Strategies – Flower Shop
What are some possible survey questions to evaluate that competitive response?
Lower costs -
High barriers to market entrants – high costs to start a business
High switching costs – customers have long contracts
New products or services –
Special products or services –
Alliances -
Size – no room for the competition

12. Competitive Strategy – Reality check (Feasibility analysis)
You will use one of these 7 strategies
Can you do it?
Can you afford it?
Lower costs - - can you make your product for less and still turn a profit?
High barriers to market entrants – can you afford the start up costs?
High switching costs – can you track customer sales?
New products or services – Can you find a new product?
Special products or services – Can you afford special services?
Alliances - Is the alliance possible?
Size – Can you grow fast and soon?

13. Competitive Strategies – Restaurant example
If your competitive strategy is
Lower costs - Many meals for less than 2 OR
New products or services – 3 traditional Omani meals
Special products or services – 3 food items for children
Alliances - location near Nizwa Souq
Good survey questions
I will offer a lamb kebob and rice meal for Do you like that price?
I will have chocolate milk for children. Is that important to you?
I will have baklava. Do you like that?
I will have camel milk chocolate. Would you like that?
I plan to open the restaurant near the Nizwa Souq. Is that a good location?

14. Competitive Strategies – restaurant
Customer response to your strategy
Lower prices - Many meals for less than 2 OR
New products or services – 3 traditional Omani meals
Special products or services – 3 food items for children
Alliances - location near Nizwa Souq
Example survey results
I will offer a lamb kebob and rice meal for Customers like this price. It is important to keep prices under 2 OR.
I will have chocolate milk for children. - all customers expect this
I will have baklava. - customers seem uninterested
I will have camel milk chocolate. 6 Customers like this idea
I plan to open the restaurant near the Nizwa Souq. 11 Customers like this location

15. Reality check – Restaurant example
Can you do it?
Can you afford it?
I will offer a lamb kebob and rice meal for Customers like this price. It is important to keep prices under 2 OR. Can you afford to produce this meal for this cost?
I will have chocolate milk for children. - all customers expect this. Do you have a good source for chocolate milk?
I will have baklava. - customers seem uninterested. You should probably drop this from your menu.
I will have camel milk chocolate. 6 Customers like this idea. Where will you find such chocolate? What will you charge?
I plan to open the restaurant near the Nizwa Souq. 11 Customers like this location. Are there locations available in that area to rent?

16. Reality check – Restaurant example
Can you do it?
Can you afford it?
Produce a model of your restaurant. Where will it be? How much is rent? What meals will you serve? What equipment is needed to make those meals? What inventory do you need? Where will you get camel milk chocolate?
What business volume do you expect? How much labor is required for that volume? Cooks? Waiters? Delivery people?
What records will you keep?
What volume do you need to produce a profit? How do you calculate that?

17. Competitive Strategies- Children’s clothing store
Competitive responses to Lulu Hypermarket clothing –
New products or services – more kinds of children’s clothing, more sizes
Special products or services – imported brands
Alliances - store location next to ice cream shop

18. Competitive Strategies – Children’s clothing store
Example survey to determine customer demand
New products or services – more kinds of children’s clothing, more sizes
Special products or services – imported brands
Alliances - store location next to ice cream shop
Good survey questions
What size children’s clothing do you usually buy?
Do you often buy shoes to match an child’s outfit?
Do you like the Carter’s brand for children’s clothing?
Do you like the Oshkosh Bgosh brand?
What is the most money you would pay for a girl’s dress?
What store location would be most convenient for you?

19. Competitive Strategies – Children’s clothing store
Example survey to determine customer demand
New products or services – more kinds of children’s clothing, more sizes
Special products or services – imported brands
Alliances - store location next to ice cream shop
Example answers
What size children’s clothing do you usually buy? All sizes seem popular
Do you often buy shoes to match an child’s outfit? They want shoes in all sizes and styles too.
Do you like the Carter’s brand for children’s clothing? This is not a brand they know.
Do you like the Oshkosh Bgosh brand? This is a brand they seem to like.
What is the most you would spend for a girl’s dress? Some would spend up to 20 OR. But most wanted a dress for less than 10 OR.
What store location would be most convenient for you? Most would like the store to be in a mall.

20. Reality Check– Children’s clothing store
Can you do it?
Can you afford it?
What size children’s clothing do you usually buy? All sizes seem popular. This will require a large inventory. How much inventory can you afford?
Do you often buy shoes to match an child’s outfit? They want shoes in all sizes and styles too. More inventory. Start up costs will be high.
Do you like the Carter’s brand for children’s clothing? This is not a brand they know. You will need to advertise the Carter brand heavily, or you may decide not to carry it.
Do you like the Oshkosh Bgosh brand? This is a brand they seem to like. Do you have a connection to this company to get these clothes?
What is the most you would spend for a girl’s dress? Some would spend up to 20 OR. But most wanted a dress for less than 10 OR. What are wholesale costs for dresses? Can you make a profit if you just charge 10 OR?
What store location would be most convenient for you? Most would like the store to be in a mall. Are mall locations available? How much rent do they charge?

21. Reality check – Children’s Clothing Store
Can you do it?
Can you afford it?
Produce a model of your store. Where will it be? How much is rent? What inventory do you need? Where will you get Oshkosh Bgosh cothing?
What business volume do you expect? How much labor is required for that volume? How many clerks will you need?
What records will you keep?
What profit will you make on each clothing item? What volume do you need to produce a profit? How do you calculate that?

22. Competitive Strategies – Flower Shop
Possible Competitive Response
New products or services – more kinds of flowers, and more colors of flowers
Special products or services – focus on weddings
Alliances - work with wedding planners
What are good survey questions?

23. Reality check – Flower Shop
Possible Competitive Response
New products or services – more kinds of flowers, and more colors of flowers
Special products or services – focus on weddings
Alliances - work with wedding planners
Given the answers you get –
Can you do it?
Can you afford it?

24. Business Plan – Part 2
Describe what your company will do that is better than the three companies you have described. For each improvement, describe why customers will value your improvement. Then describe how you can create that improvement. For example, if you think you can sell a product for less money than other companies, describe how you can do that. If you will have different products than competitors, where will you get those products?

25. Business Plan – Part 2
Describe what your company will do that is better than the three companies you have described. [ Your competitive strategy] For each improvement, describe why customers will value your improvement. [Survey results] Then describe how you can create that improvement. For example, if you think you can sell a product for less money than other companies, describe how you can do that. [Can you do it? Can you afford it? If you will have different products than competitors, where will you get those products? [Can you do it?]

26. Business Plan – Part 2
Describe what your company will do that is better than the three companies you have described. [ Your competitive strategy]
Example- I believe my restaurant can beat the 3 competing restaurants if I can sell my food for lower prices, offer authentic Omani meals, and locate the restaurant near the Nizwa Souq.

27. Business Plan – Part 2
For each improvement, describe why customers will value your improvement. [Survey results]
The survey I completed of 15 potential restaurant customers showed that they would go to a restaurant that had less expensive meals. 12 of 15 people surveyed said low cost was important to them. 11 of 15 people said they enjoy authentic Omani meals and would like to eat at such a restaurant. All 15 people said they frequently visit the Nizwa Souq and would enjoy being able to eat at a restaurant in that area.

28. Business Plan – Part 2
Then describe how you can create that improvement. For example, if you think you can sell a product for less money than other companies, describe how you can do that. [Can you do it? Can you afford it?
I have interviewed two restaurant owners and they tell me typical food costs are about 1 OR per meal. But in addition to food costs, I will have to cover labor costs, rent, and equipment payments. My plan to keep those costs low is to hire few laborers initially. My mother will do much of the cooking, and I will serve customers.

29. Business Plan – Part 2
If you will have different products than competitors, where will you get those products? [Can you do it?]
In order to cook authentic Omani meals I will need local ingredients and I will use family recipes. Since the restaurant will be near the souq, I will be close to sources of local vegetables and meat, so I should be able to have all the right local ingredients. I am sure my mother can follow the family recipes and produce good Omani meals.