Market and Competition

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Class 5 Market Competition
Foundations of Entrepreneurial Leadership

• Market and Competition
• Whos buying, and how much, and from whom?
• How are you different?
• KNOWLEDGE IS POWER

MGT 190/290 Prof Frey Frey_at_gwu.edu
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In This Session

• Quick Review Industry/Context
• Quick Review Women and Negotiation
• New Market and Competition
• 5 pitches 1-2 minutes each
• Presenter Summary Peer Forum
• Quiz postponed until next week

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From last time Context/Industry

• What are the key elements included in this part
  of the Feasibility Plan?
• FACTS uncovered in Concept/Industry drafts?
• Any data that changed your concept?

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From last time Industry/Context

• Starbucks brainstorm.
• Space in which concept exists
• How large? (dollars, people, geographical,
  sector?)
• New or mature?
• Fast growing, stable, declining growth?
• Seasonality issues?
• Other Industry/Context Issues
• Technology trends
• Social/cultural trends
• Political issues
• Regulatory climate
• Economy (??) impact

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Anatomy of a Feasibility Plan

• Executive Summary
• Concept
• Value Proposition
• Value Model
• Industry/Context
• Market
• General
• Specific
• Competition
• Direct/indirect
• Strategic Differentiation

• Financial Information
• Startup Costs
• Pro Forma Income Statements
• Balance Sheet
• Sources of Funding
• Management Team
• Operations
• Milestones
• Harvest Strategy

You are here
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Anatomy of a Feasibility Plan

• Executive Summary
• Concept
• Value Proposition
• Value Model
• Industry/Context
• Market
• General
• Specific
• Competition
• Direct/indirect
• Strategic Differentiation

• DUE NEXT WEDS 9am
• FUNGER 315
• Market Analysis Section
• Includes
• Market
• Competition

You are here
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Feasibility Market Analysis

• Market descriptions
• 1. General market Size/trends
• 2. Target market
• Description
• Size
• c. Characteristics social, psycho, demographic

Refer to Market Research Doc Session 3
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1. General Market

• The population that may be interested in
  product/service/concept that you are offering
• Consumers?
• Income, Age, Gender, Occupation, Marital Status,
  Family size, Ethnic group, Education, Home
  Ownership, Other
• Businesses?
• Industries, Sector, Years in Business, Revenues,
  Number of Employees, Number of Branches, Square
  Footage, Social Values, Organization Culture
• Other?
• Schools, organizations, associations, etc.

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1. General Market Size/trends

• Size How big is overall population?
• Value in (Amount of revenue spent on this kind
  of concept)
• Value in other (ex volunteer hours,
  donations, attendees)
• Characteristics of this general population
• Demographics, psychographics, social

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2. Target Market Specific

• 2a. Describe the specific group of
  customers/users you will reach
• 2b. Size of Market
• Value in
• Ten million dollars is spent annually on used
  baby clothes in DC metro area
• Value in other
• 250,000 dog owners live in Arlington, VA
• 2c. Characteristics
• Who are these people? What do they want, like,
  need? Love them, care about themthey will know
  if you dont.
• Celestial Seasonings Example

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2b. More on Target Market Size

• Two ways to describe market size
• Top Down
• Size of entire target market
• Market is worth 100 million, we will get 1
  market share
• Meaningless assessment
• Bottom Up or Addressable Market
• Fact-based estimate of ACTUAL number and dollar
  value of customers you can obtain
• Of the potential users/customers, how many can I
  realistically expect to get?
• Realistic assessment

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In-class Market Research Exercise

• - Establish need survey
• Buy side dynamics
• Practice how you are different in pitch
• Outline market
• Total
• Your niche
• Growth
• Trends
• Tip Dont hang your hat on 1 of 1 billion
  dollar market

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Addressable Market Example 1

• Soccer Training School (CTS)
• There are 25 Soccer Clubs in Arlington County.
  Each club has 12 teams. Clubs hire trainers for
  each team.
• Target Market 300 trainer positions
• (CTS) will sign contracts with 10 of those clubs
  in year one (10 x 12 120 trainer positions)
• Results in 120 trainer contracts _at_ 2000 per
  contract
• Estimated market value in year one 240,000

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Addressable Market Example 2

• There are 50,000 water sport tourists in Costa
  Rico each month who spend an average of 20 to
  enter water parks.
• 10,000 of those tourists pay specifically for
  surfing privileges.
• Our data indicate that surfers want X,Y, Z, in
  their park of choice. Our park specializes in
  X,Y,Z and can accommodate 2000 surfers per month.
  
• The Polo Water Park will operate 10 months a
  year.
• We estimate an existing addressable market of
  20,000 customers/year generating revenue of
  40,000/month, 400,000/year

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2c. Target Market Characteristics

• What does this group look like as a whole?
• Who are the customers/users? Where are they? How
  many are there? What characteristics define this
  market? Trends?
• Demographics, psychographics, social factors

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2a/c. Who are they Demographics

• 2a c? Brief description at outset, delving into
  more later in market section of plan
• Consumer
• Income, Age, Gender, Occupation, Marital
  Status,Family size, Ethnic group, Education, Home
  Ownership,
• Business
• Industries, Sector, Years in Business, Revenues,
  Number of Employees, Number of Branches, Square
  Footage, Social (Values, Lifestyles)

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2c. Target Market Social Trends

• Consider changes in target market affecting
• Ability to Afford Product/Service
• Need for Product/Service
• Use of Product/Service
• Ties into Value Prop
• Social Values/Concerns Affecting Product/Service
• What else is happening in society that affects
  your target market and feasibility of your
  business

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2c. Target Market Psychographics

• Psychological factors that influence purchasing
  decisions
• Consumer Techie, status, trend-setter,
  socially responsible, family-focused, bargain
  seeker
• Business Industry leader, innovative,
  conservative, fiscally prudent, green

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2c. Target Market Social Trends

• Consider changes in target market affecting
• Ability to Afford Product/Service
• Need for Product/Service
• Use of Product/Service
• Ties into Value Prop
• Social Values/Concerns Affecting Product/Service
• What else is happening in society that affects
  your target market and feasibility of your
  business

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2c. Target Market Social Trends

• What else is happening in society that affects
  your target market and feasibility of your
  business
• Time starved dual income families
• Busy kids
• Singles
• DINKs
• Aging Boomers

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Feasibility Competition

• X Q Who is your competition? A No One X
• 1. Name Direct specifically and Indirect
  generally
• 2. Distinctive Competencies of Direct Competitors
• Brief summary of products/services
• Specifically why are they a threat (educated vs.
  naïve)
• 3. Your Strategic Differentiation How are you
  different?
• Tip Think about the term unfair competitive
  advantage or what would keep someone else from
  replicating?

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E-Scan Competition (Rhonda Abrams)

• External (Customer Perception)
• Service/Features
• Purchase Price
• Quality
• Durability/Maintenance
• Image, Style, Design
• Perceived Value
• Brand Recognition
• Location, Delivery time
• Credit Policies
• Customer Service

• Internal Operational Factors
• Financial Resources
• Marketing Budget/Program
• Technological Competence
• Access to Distribution
• Access to Suppliers
• Operational Efficiencies
• Sales Structure
• Patents Trademarks
• RD
• Ability to Innovate

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SFL Strategic Differentiation Visual
Company B Company A YOU Company F
Company C Company D Company E
Quality of Trainers
Number of Services
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SFL Strategic Differentiation Visual
Age Specific Programs Value Priced Quality of Trainers Tutoring Leadership Development
S4L X X X X X
Comp 1 X X
Comp 2 X X
Comp 3 X X
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New and improved SWOT chart
Strengths Weaknesses
Opportunities Actions/stats Actions/strats
Threats Actions/strats Actions/strats
Link to SWOT template
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Feasibility Next Steps

• Financial Projections
• Sources of Funding
• Management team
• Operations/Action Plan
• Milestones
• Executive Summary (first in plan, last in prep)

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5 pitches 1-2 minutes each

• Court 4 volunteers (who did not pitch last
  week)
• Your idea in a sentence
• Who you serve (dig into market)
• Industry context
• Why youre better

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Presenter Summary 1 minute each

• Reflect on the comments of your peers.
• Jameise
• Lindsey

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For Next Session

• 1. Market Analysis Plan Draft
• DUE 9 am, Funger 315, WEDS!! 2 pg max. All else
  appendix
• 2. Reading
• Essentials Chapter 10 13
• Any additional readings posted on blog
• Hot Mommas Project case Susan
• 3. Skill Building Financial Literacy
• 4. Quiz Sessions 3, 4, 5
• 5. Provide online feedback Peer forum

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Your Market Plan Due This Week

• MARKET
• 1. General market Size/trends
• 2. Target market
• Description
• Size
• Characteristics social, psycho, demographic
• COMPETITION
• Name Direct specifically and Indirect generally
• Distinctive Competencies of Direct Competitors
• a. Brief summary of competitor products/services
• b. Specifically why are they a threat
• c. Your Strategic Differentiation How are you
  different?