Week 4 Flashcards
How to reach your end consumer?
- Complementary technology
- Production
- Marketing
- Distribution
Have a competitive advantage:
can be obtained in the value chain
How to protect your technology? (3)
IPR
Secrecy
Speed to market
What are IPRs and what are teh advantages and disadvantages?
Patent • Related to invention Registered design Copyrights Trademarks (organizational level) Advantages • Legal right • Tradable • Monopoly Disadvantages • Disclosure requirements • Invent around • Costly to enforce • Limited in time • Not always possible
What are the advantages and disadvantages of Secrecy
Advantages • No closure Disadvantages • Difficult to maintain • Costly • Resistance from inventors
What are the advantages and disadvantages of speed to market
Advantages • Competition is lagging behind • Costly to imitate • Quick profits Disadvantages • Over soon • Diminishing returns • Treadmill (time consuming and exhausting process)
Should you be on the technology market or the product market?
This depends on the:
o Protectability of idea
o Complementary assets and concentration
o Collaboration or competition (depends on 2 aforementioned factors)
Protectability and complementary assests matrix
P = protectability CA = Complementary Assets
P = low, CA = freely available
Difficult to earn money
attackers advantage:
Few contracting opportunities
Exploiting technological leadership
Stealth strategy in product market
P = high, CA = freely available
The inventor
Greenfield competition:
Choice between product and technology market
Exploit monopoly power
Performance depends on strength of technological competition
P = low, CA = tightly held
The holder of C.A.
Reputation-based idea trading
Few contract opportunities
Depends on incumbent commitment to idea trading
Entry in product market difficult
P = high, CA = tightly held
Best negotiator
Idea factories:
Contracting with incumbents
Product market costly or impossible
Bargaining power
what stages does the product life cycle have, the division of the market, and the onion of product thingy.
Lifecycle: completely new market emerging growing mature declining
market: innovators early adopters early majority late majority laggards
innovators - core product
early adopters - core product + couple aspects of 1st ring
early adopters - core product + full 1st ring
What are the price positioning and place regarding the 3 beginning stages of adoption?
price
positioning
place
Innovators:
free or cost-based
functioning
direct sales
early adopters
value-based
leapfrog competition
direct sales
early majority
competition-based
ROI
efficient channels
• 4 keys steps to cross the chasm between early adopters and early majority
o Launch the invasion with a direct sales force
o Target a niche market
o Offer a complete solution
o Create positioning to show you are the leader in that market
• Focus on early majority you need these 5 diffusion forces:
o Relative advantage o Compatibility o Simplicity o Trial ability o Observability
what are expert entrepreneurs more likely to do compared to managers?
• not to believe market data’
• to use previous experience than managers
• to consider available financial resources when making decisions regarding the scenario
• to think holistically about the scenario
• to identify or pursue markets no mentioned in the Venturing product scenario
• more open to considering new markets at least in part because they were not as tied to articulation of the product as presented in the scenario
• base pricing decisions on a skim pricing strategy, while managers are more likely to base pricing decisions on a penetration pricing strategy
o Skim pricing: start highest, and lower it over time
• to make initial sales themselves, while managers are more likely to engage a sales force to approach a segment
• to incorporate partnerships into their decision making as they solved problems during the scenario.
• Not much difference between the number of channels chosen, it was found that Managers are more likely to select more segments than expert entrepreneurs.
• Expert entrepreneurs’ use of effectual logic both coheres with and lends credence to several recent insights from marketing and the resultant angst toward the field.
o Effectual logic is relational, network oriented, equity driven, and cocreational.
• In uncertainty, try:
o Cocreational or partnership strategies with potential customers, suppliers, and investors who they work with directly.
What is an industry?
An industry is any group of firms that supplies a market, but markets are rarely homogeneous.
is likely to comprise a number of market segments.
Typologies (concentration of competitors)
Fragmented:
large market, similar sized competitors
well-established
competitive pricing, limited profit
can become market leader
Consolidated:
few large competitors (mature/declining industry)
well established
defensive pricing possible
high barriers to entry
little opportunity other than radical product/market innovation
Completely new:
not proven/demanding -> no comp
high risk/high return
first mover advantage
can dominate market
high marketing costs
Emerging:
proven demand/size uncertain
few competitors
customer identification
first mover
opportunity for dominance
high marketing costs
barriers to entry being set
Growing:
proven/growing demand
dominant leaders emerge
growing number of competitors
competitive pricing
buying patterns
aggressive marketing in competitive market
Mature:
well established comps
defensive pricing
high barriers to entry
innovate based on existing product/service
innovate based upon process or after-sales service
Declining:
established process/procedures/buying patterns
limited life expectancy
declining range of products
consolidate market by becoming market leader
can short companies (BAD BAD)
3 types of competitors
direct
indirect
future
what are direct competitors?
those offering similar or identical products. These are the most important because they compete directly and you need to understand just how you are different and
better than them, and how you will convince their customers to switch to you.
what are indirect competitors?
those offering close substitutes. Where you have an innovative product you may have no direct competitors but still need to persuade customers using the ‘inferior’ competitor offering to switch
what are future competitors?
those who could enter your market in the future. If your new venture is successful it will attract competitors. You need to think who they might be and how they might be countered.
What are values?
are core beliefs. The values you set for your business set expectations regarding how you
operate and threat people. They may well have an ethical dimension. Values form part of the cognitive process that will help shape and develop the culture of your business. Shared values form a bond that binds the organization together – aligning and motivating people
What is a vision?
it is important to create a vision for what the business might become – important for your motivation and that of all the stakeholders. Your vision for the business should be based around and grounded in your business purpose.
A vision is a shared mental image of a desired future state – an idea of what your enterprise can become – a new and better world
What is a mission?
the formal statement of business purpose is called a mission statement. The mission statement says what the business aims to achieve and how it will achieve it. The mission statement, therefore, usually defines the scope of the business by including reference to the product, value proposition, customer groups and the benefits they derive.
What is value driven marketing
Value-driven marketing seeks to actively use customers to help sell existing product and develop new ones. This is based upon establishing a good relationship with customers – one that is underpinned by mutual self-interest, where there is something in it for both the customer and the company with each helping the other in certain ways.
the advantage of branding are :
to customers: Easier product identification Clearer communication of value proposition Aids with product evaluation Reduction in risk when purchasing (homogeneity of offering) Can create additional interest of character for the product/service.
To product/service producers: Conveys emotional aspects of the value proposition Promotes product/service loyalty Helps target marketing Defends against competitors Allows higher prices to be charged Increases power in distribution channels.
Ethical values and corporate social responsibility (CSR)
At the base is CSR that delivers profit to the company. Next is CSR that comes through compliance with the law. Finally, there is CSR that is discretionary, based upon ethical norms and a desire to do the best thing for the community and society as a whole.
Three sound commercial reasons for having a strong CSR policy:
- Increased sales, brand identity and customer loyalty
- Reduced operating costs and productivity gains
- Improved new product development
