The Importance of Understanding Competition

THE IMPORTANCE OF UNDERSTANDING COMPETITION

@bobbymitton

@evospireltd

@britethink

EVOSPIRE

WHO ARE THE COMPETITION?

▸ Current businesses already in your market

▸ Existing businesses who are looking to break into your market

▸ Startups / disrupt

▸ People

▸ Complimentary products/services

DYNAMIC COMPETITION.The ability to discern patterns in the dynamic environment and competitive chaos… the ability to spot opportunities and think fast, thinking ahead of rivals before a reaction

EVOSPIRE

DYNAMIC COMPETITION

▸ This is where one action thrown into the market place can prompt responses. That one action can provoke several reactions

▸ Each reaction can then ripple into further effects

▸ COMPETITVE CHAOS

COMPETITOR

YOUR ORGANISATION

COMPETITOR

COMPETITOR

COMPETITOR

COMPETITOR

COMPETITOR

COMPETITOR

COMPETITIVE ENVIRONMENT

ACTIONS, REACTIONS

AND LEARNING

DIFFERENTIATION. When a product or service is perceived to be different because it has properties which make it distinct from other products.

EVOSPIRE

DIFFERENTIATION

▸ Recognises when customers are too scattered

▸ Businesses will distinguish their brand in some way to appeal to small segments

▸ Size, Quality, Style or ways differentiation is split

▸ Customers are willing to pay more/premium as it is different and for them

* THOMSON

* THOMAS COOK

* HOW CAN A TOUR OPERATOR BE DIFFERENT?

DIFFERENTIATION.

EVOSPIRE

WHAT MAKES A BRAND DIFFERENTIATED?

▸ SPEED

▸ RELIABILITY

▸ SERVICE

▸ DESIGN

▸ FEATURES

▸ TECHNOLOGY

▸ RELATIONSHIP TO CUSTOMERS

▸ CORPORATE PERSONALITY

EVOSPIRE

PORTERS FIVE FORCES

EVOSPIRE

FIVE FORCES

▸ PORTER ARGUED THAT 5 FORCES DETERMINE THE PROFITABILITY OF AN INDUSTRY

▸ AT THE HEART OF THE MODEL ARE RIVALS AND THEIR COMPETITIVE RIVALRY

▸ THE MODEL TELLS YOU TO LOOK BEYOND THE IMMEDIATE COMPETITION

COMPLIMENTARY PRODUCTSTHE 6TH FORCE??

COMPETITIVE STRATEGY.The link between price and perceived quality must make sense!

EVOSPIRE

COMPETITIVE STRATEGY MATRIX (IDEA FROM ABRAM HAWKES PLC)

COMPETITIVE ADVANTAGE & COMPETITIVE SUCCESS.

EVOSPIRE

COMPETITIVE STRATEGIES

▸ Competitive strategies are not just built around differentiation and cost leadership

▸ Competitive advantage can develop from perceived differences and cost advantages

▸ It is about effectiveness

▸ In the long term, it can mean superior margins

AN ORGANISATION CAN AIM TO DO BETTER THAN ITS RIVALS AND FOCUS ON OPERATING EFFICIENCIES

Porter (1996)

EFFECTIVENESS

THE BUSINESS CAN SEEK TO DO DIFFERENT THINGS OR TO DO THINGS DIFFERENTLY

Porter (1996)

EFFECTIVENESS

IT CAN SEEK TO DO DIFFERENT THINGS OR DO THINGS DIFFERENTLY

COMPETITIVE ADVANTAGE

AN ORGANISATION CAN AIM TO DO BETTER THAN ITS RIVALS AND FOCUS ON OPERATING

AN ORGANISATION CAN AIM TO DO BETTER THAN ITS RIVALS OR FOCUS ON OPERATING EFFICIENCIES…

COMPETITOR BENCHMARKING.

EVOSPIRE

BENCHMARKING

ANALYSING THE COMPETITION.

EVOSPIRE

ANALYSING THE COMPETITION

▸ This should happen before you put your business plan together

▸ Every entrepreneur should spend ample time on a competitive analysis

▸ Look beyond the traditional forms of competition

▸ See how you can be different or more effective

DELVE INTO EACH COMPANY

TRY TO BE DIFFERENT

LOOK AT PREVIOUS RESEARCH

EVOSPIRE

MY APPROACH

▸ A4 piece of paper…

▸ Strengths, Weakness

▸ Resources and Capabilities

▸ Differentiation?

▸ What I could do?

THANK YOU@BOBBYMITTON @EVOSPIRELTD

The Importance of Understanding Competition

Business

Transcript of The Importance of Understanding Competition