Competitive Strategies and Business Plans for Eco Entrepreneurs

Competitive Strategies and Business Plans for Eco Entrepreneurs

•There are two primary competitive strategies—cost leadership and product differentiation.•Both require market segmentation—

–Identify the market segment that values lower costs or product differentiation.

–Demographics, socio-economic, political, locational, ethnicity, consumption patterns

–Industrial—SIC codes, products, industry rivalry, size, growth—how and where can lower costs or product differentiation assist the client?

•It is generally not possible to be the low-cost leader and adopt a product differentiation strategy. Why?


• What is cost leadership?• Cost leadership depends on ability to lower costs across

the value chain in a manner that your competitors cannot match. – Lower costs provide your venture with superior returns.– Some of these lower costs can be passed on to the target

market and this is the PRIMARY way in which your venture provides value.

– Your venture is known as the low cost supplier.

• The reputation for the low-cost leader is just that: low cost.


• Value chain analysis is essential—lower costs in inbound logistics, operations, outbound logistics, marketing, service, as well as in support activities. Not all organizations can do this, and hence this is the basis for COMPETITIVE ADVANTAGE. – Costco versus Sam’s Club– Walmart versus Kmart

• Also must have a value chain analysis of the target market so that the cost advantages that matter to the target are identified.

• Cost leadership value chain example


• What is Product differentiation?• Value chain analysis to determine how and where product/service

differences can be adopted that MATTER or are valued by the target.– Value chain example.

• Requires investment in knowledge of the target, precise identification of the target, and knowledge of competitors.– For these reasons, product differentiation is costly and difficult.

– Essential.

• Identify your target and how product/service differentiation will be valued by the target, how your venture will provide it, and why your competitors will not be able to provide it.

• This is your major source of competitive advantage.


• Business Plan– Monday, March 10th—present key problems you face.– Wednesday, March 12th—plan due and presentation

by all teams—10 minutes, time your self.

• Use Green Sun, Inovest, or other plan examples as guides, as well as Timmons, Chapter 6.

• Plan should include:– Title, team, table of contents– Vision and mission statements


– Executive Summary• The problem, the opportunity, the client, how the problem is

addressed for them, returns to investors, core competencies and competitive advantage, team.

– Body of the Plan• Opportunity, size of problem, size of the market, timeliness,

growth, value to target and value to investors, rates of return and time to payout.

• The solution you offer• Firm legal structure


• The team and member qualifications• Target market—details• Marketing strategies, pricing• Industry analysis—nature, competitive pressures (buyer,

supplier power, rivalry, entry, competitive pressures within the industry), SWOT analysis of competitors

• Financials—sales, costs, break even, rates of return, assets, liabilities

• Competitive advantage—team, barriers to entry, core competencies, value chain analysis, IP

• Key strategies—product/service differentiation• Risk analysis and contingencies.


• Time line• Exit strategy

– Appendices

• This is a tangible product that you can show to any potential employer.

Competitive Strategies and Business Plans for Eco Entrepreneurs

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