This document discusses strategies for small businesses, including imitating existing successful business models with minor innovations. It describes conducting industry and competitor analyses to understand markets. Businesses should select a strategy of differentiation, low cost, or focus on a niche. Finally, the document outlines frameworks for analyzing competitive advantage, including value chain analysis, Porter's five forces, and VRIO analysis to leverage resources for sustained advantage.
7. • Defines how your business operates:
– How you develop new offerings
– How you “Go To” market
– How to identify ideal prospects
– How to manage existing accounts
– How to engage partners, vendors, investors, the
media, suppliers
– How to recruit, retain and develop talented people
– How to manage your finances
– How to manage inventory
Your Strategy
8. • Chances are you are pursuing a business model
that ALREADY EXISTS
• Copy others’ successes, avoid their failures
• Developing a strategy requires four key
decisions you make about your business:
– Pre-strategy
– Benefits
– Strategy
– Competitive Analysis
Your Strategy
10. • Choose your product / service
• Identify the industries you will pursue
• Find all relevant industry trade associations
• SIC versus NAICS Codes?
Pre-Strategy
13. • A “market” is a population of customers
for your product / service:
– Understand the scale and scope
• Scale: Mass versus Niche
• Scope: Local to global
Selecting Your Markets
17. • Incremental innovationIncremental innovation: Imitation plus
one or two ways in which you do things
completely different
• Pure InnovationPure Innovation: Results in a new
product or service:
– Occurs VERY rarely
– Enables you to make your business fit your
values, beliefs, strengths, ideas, preferences
Imitate Approach
18.
19. • BY imitating, customers already
understand/know about your offerings.
• Most use imitation plus/minus one degree
of similarity (akin to cloning, manifests in
franchising.)
• Parallel competition: Copying with minor
adjustments.
• Innovate approach enables you to make
your business fit your values, beliefs,
strengths, ideas, preferences.
Innovate Approach
24. • Obtain industry codes
• Size the industry
• Profitability (www.bizstats.com)
• How profits are made
• Competitors
• Analysis: consolidate data into summary
report format
• Source your references
Industry Analysis
34. • What benefitsbenefits do you plan on offering
your customers?
• ValueValue benefits: Quality, style, service,
technology, personalization.
• CostCost benefits: lower cost, volume (scale)
savings, learning (greater efficiency)
scope (ex. Multifunction printer.)
• OrganizationalOrganizational: you automate
processes or mastered the production of
a product or service, so you can offer it
more cheaply than anybody else.
Benefits
37. • Information provided can be useful
• Price sensitivity, product/service features
and benefits, feelings about the product,
the company, competitors
• People say one thing in a closed room,
act differently when purchase is involved
• Find a representative sample that fits
ideal customer profile or existing clients if
possible
Brainstorming
39. • There Are THREE Primary Strategies
– DifferentiationDifferentiation: Show how you offer a
combination of VALUE benefits unlike anyone
else to pursue MASS markets
– CostCost: Tell how do you offer a combination of
COST benefits
– FocusFocus: Limit your efforts to a small portion
of the overall market, called a segment or
niche
Strategy Selection
41. • Implement customer benefits
• Know EXACTLY what your competitors
are doing
• Customer service – it’s lip service or it’s a
true advantage
– Your clients will tell you what you’re doing
wrong & right
– Listen to customers…EXCEPT WHEN YOU
DON’T!
• Needs to be sustained over time
• Know your markets inside & out
Competitive Advantage
42. • Infuse the benefits your customers are looking
for into every area of your business.
• Michael Porter popularized VCA, looking at the
processes and activities a small business
conducts to design, produce, market, deliver
and support its products and services with anwith an
emphasis on four key areasemphasis on four key areas:
– Infrastructure: Location, physical assets
– HR
– Technology
– Procurement
Value Chain Analysis
44. • Leverages Jay Barney’sJay Barney’s model for competitive
advantage:
–Value
–Rareness
–Imitability
–Organization
• Used to test whether a resource will give your
firm competitive advantage
• How are you leveraging all your resources
VRIO Analysis
46. • Match your company’s strategy to the
lifecycle of the industry:
– Introduction
– Early Adopters
– Growth
– Maturity
– Decline
– Laggards
Lifecycle Analysis