Chapter 5: Reading and Beating the Competition – Finding Marketplace Gaps

Learning Objectives:1. Define competition in terms of size, growth, profitability,

innovation, and market leaders2. Discover your Target Customer’s competitive touchpoints3. Understand the value of positioning in relationship to competitors

and Target Customers4. Evaluate competitors using primary, secondary & “new eyes”

research5. Develop skills to become the best marketplace detective you can

be6. Evaluate the competitive landscape broadly7. Develop a competitor matrix8. Create uniqueness to compete9. Develop skills to become a lifelong scanner of the competitive

landscape10. 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

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

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!