TECHNO week 5

• Steps in analyzing building a differentiable and sustainable competitive advantage

  1. Identify direct and indirect competitors
  2. Research and apprise your competition
  3. Conduct a Competition Analysis
  4. Identify your Competitive Advantage
• There is nothing known as a level playing field and business is all about creating an unfair advantage. However, business is also not a zero-sum game – which means that you don’t necessarily have to lose for me to win
• The trick is in creating a space where you can exist, sustain and grow steadily
• Simply put, if you collect enough info about your competition, you already have a reference on how they are running their business, how they built their product, how they distribute it and other info that can generally benefit you.
• 
  

  A general rule is, competition will always exist, except in very few cases when you are the first one to go to market. Even in similar cases you probably have indirect competition.
• What is important is to know how to collect the info. Worse than not knowing about the competition is collecting the wrong info. It could be misleading and lead to negative results.
• 
  

  Here are a few questions that you are trying to answer:

  • What is the state of the target market? How large is it and how many companies dominate it?

  • What are the odds of surviving in the given niche?

  • What promotional channels do your rivals use?

  • What are the target audience interests and how do different companies try to engage with them?
• Your brand isn’t what you say it is, it’s what Google says it is”, – British businessman, Chris Anderson once said.
• to find who your greatest competitors are, you can just ask the biggest search engine in the world (google). Run additional searches on portals such as Staista, Alternative to and Owler
• Step 2: Analyze your competitors: Go through their website and gather information on the following parameters:

  • Product offering
  • Unique Value proposition
  • Pricing
  • Market reviews
  • Branding: How well known the brand is
• someone that offers the same products, with in the same category as you”

  Direct competitor
• example of Direct competitor

  McDonald’s and Burger King
• a business that sells a product or service in the same category as you, but it’s different enough to act as a substitute for your product or service.

  Indirect competitor
• example of Indirect competitor

  McDonald’s and Subway.
• a business that sells a product or service that’s both different in category and type than you, but one which your customers could choose to spend their money instead.

  Replacement competitor
• example of Replacement competitor

  McDonald’s and ready to eat / frozen dinner meal
• To get ahead in the game, a business needs to survive the competitive landscape , and this requires the business to create a competitive advantage.
• generates greater value for customer and the business due to certain strengths or conditions.

  Competitive advantage
• The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.
• This strategy works very well when you are a first mover in the market.

  Speed
• Raising a lot of capital can build confidence of other investors in your company and scare them from investing in your competitors as well.


  Capital
• Hiring great talent as they know that great talent is the key to creating and selling great products, especially in a market where employability is very low.

  Team
• Provide access to content that wasn't available to the customer before. Accelerate the growth of this content and also maintain its quality till the point that there was no other place to get such quality content.


  Content
• Having a great relationship and reputation with potential customers helps you acquire early users before your competitors can. Your network also helps you identify and convince the right stakeholders and investors.


  Network
• Companies located in a conducive startup ecosystem have a competitive advantage because of access to capital, press, talent, expertise, mentorship, suppliers, and startup communities.


  Ecosystem
• A far superior product gives you a great competitive advantage. To differentiate your product, you can focus on various aspects of the product like Price, Form, Features, Ability to Customize, Performance, Quality, Durability, Usability, Reliability, Reparability, Style, Distribution system and Customer Service. Identify your strengths and capabilities and focus on one of the above.


  Product
• Apple on User Experience is an example of

  Product
• Silicon Valley is an example of

  Ecosystem
• AirBnB and Craigslist Airbnb created a way for its customers to cross-post their listings on one of the world's most popular listing website. is an example of

  Network
• Zomato, Medium is an example of

  Content
•  Google and Facebook have legendary recruitment processes

  is an example of

  Team
• Ola, Uber, Walmart

  is an example of

  Capital
• WhatsApp was a first mover, kept providing their product for free and aggressively acquired users so that no other mobile IM service could keep up

  is an example of

  Speed
• Create your Competitive Advantage

  Speed

  Capital

  Team

  Content

  Network

  Ecosystem

  Product
• Although competitive advantages help you create your differentiation, it is even more important to defend and sustain that differentiation. This is called


  defensibility
• Competitive advantages grows your company's value linearly as you increase traction and grow your revenue. However, if you are able to protect your castle of competitive advantage from your competition with a moat of true defensibility, then your business value grows exponentially.
• helps in sustaining the relationship with the customer and prevent customer chum, mitigating costs of acquiring new customers to replace them.

  Defensibility
• methods to create defensibility are:

  Economy

  Network

  Brand

  Switching Costs

  IP
• Economies of scale come into play when you get bigger and your operations become large scale, as a result, costs get reduced and there is better operating leverage. This translates in to lower costs and lower prices.


  Economy
• If each additional user of your product adds more value to every other user, then your product is creating a network effect. The more users have, the more irrelevant your competitor's network becomes.


  Network