Week 6 - Leases and Competition Flashcards
10 Goals od Competitive Intelligence
- Improve your product features (esp. Price) and customer benefits
- Improve your customer service
- Find new ways to distribute your product/service
- Improve your advertising and promotions
- Develop more efficient production processes
- Reduce your reaction and delivery time
- Add value to your product or service
- Find new alliances and strategic partners
- Find new ways to grow your current product/service
- Develop new product/service opportunities
5 Steps to Building a Successful Niche Business
Create a Simple Service Craft Your Niche Marketplace Become the Niche's Leading Authority Be Specific, Distinctive and Relevant Copy, Paste, and Repeat
4 P’s of Market Mix
Price
Place
Product
Promotion
Distribution Methods
Directly to Consumer Selling through Retailer Selling through Wholesaler Franchising Licensing Using an agent Outsourcing
A distribution system in which one company (the franchisor) grants the right to sell its products or services to another company (the franchisee). Usually involves selling a format or business process.
Franchising
Distribution Considerations
Consumer goes to supplier
Supplier goes to consumer
Arms-length
Self-serve
Increasing the number of ways in which a consumer can find your product or service has the potential to increase sales
Distribution Channels
Drawn up by the property owner’s lawyer
The terms proposed are a starting point for negotiation
Lease
Is expressed as $ per square foot
Based on average sales per square foot of retailers in the area
Basic Rent
Re-writing a Lease
Escape hatch
Option to renew
Right to transfer or assign
Cost-of-living cap (rent increases based on inflation)
Percentage lease (base + % of gross sales)
Floating rent scale (increases as occupancy increases)
Start-up buffer
Improvement costs
Restrictive covenants (things you or your landlord can’t do)
Maintenance agreements
Those companies or individuals that provide similar products services, or benefits, as perceived by your target customer.
Competition
Types of Competition
Direct Competitors
In-Direct Competitors
Invisible Competitors
Offer same products or services as perceived by your customer
Direct Competitors
Provide the same benefit, as perceived by your target customer. Compete for “same occasion” dollars.
In-Direct Competitors
People or businesses that have the capacity or desire to provide the same products, services, or benefits that you do.
Invisible Competitors
Who is the Competition of Time Hortons?
Direct Competitor
Other Tim Hortons, Country Style, Starbucks
Indirect Competitor
Bakeries, breakfast restaurants, home brewers
Invisible Competitor
McDonalds
CI – Competitive Intelligence
The process of learning, collecting, and using information about your competitors for the purpose of growing your business.
Primary Research Sources
Customers
Suppliers
Employees
Trade shows
Primary Research Techniques
Focus Groups
Be the customer
Surveys
Interviews
An instance when the customer has contact with anything affiliated with the business:
products
advertising, packaging, public relations
building
Thouchpoint
Competition Secondary Research
Competitors’ literature Trade magazines Business directories Resource centres Internet (company websites, discussion forums) Franchise information
Competition Primary Research
Analyzing customers’ perceptions of the competition to find out what benefits and features are important to them.
Process of establishing unique benefits and features that the target customer values relative to the competition
Competitive Strategy
Positioning Strategies
Niche Strategy
Differentiation Strategy
Cost Leadership Strategy
Target a very narrow segment within a segment of the market (specialists)
Bearskin Airlines (geographic niche)
MapleArt Custom Furniture (product niche)
Other
Niche Strategy
Maintain a unique perception of its product/service Design/quality Service Image Technology
Differentiation Strategy
Some exceptions, but not usually a recommended strategy for small business
Success at this strategy is usually based on efficient production, distribution, and purchasing power
EXAMPLE: Walmart
Cost Leadership Strategy
The Competition Lifecycle
Growth
Maturity
Decline
Embryo
Your objective is to keep your product or service positioned in a growth market
How?
Change Differentiate Continuous learning Constant addition of product/service benefits Partnerships
To avoid the Decline Stage, you must ______
constantly be in touch with the market and compete with the right strategies accordingly
