Competitive Strategies and Business Plans for Eco Entrepreneurs

1
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• There are two primary competitive strategiescost
  leadership and product differentiation.
• Both require market segmentation
• Identify the market segment that values lower
  costs or product differentiation.
• Demographics, socio-economic, political,
  locational, ethnicity, consumption patterns
• IndustrialSIC codes, products, industry rivalry,
  size, growthhow and where can lower costs or
  product differentiation assist the client?
• It is generally not possible to be the low-cost
  leader and adopt a product differentiation
  strategy. Why?

2
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• What is cost leadership?
• Cost leadership depends on ability to lower costs
  across the value chain in a manner that your
  competitors cannot match.
• Lower costs provide your venture with superior
  returns.
• Some of these lower costs can be passed on to the
  target market and this is the PRIMARY way in
  which your venture provides value.
• Your venture is known as the low cost supplier.
• The reputation for the low-cost leader is just
  that low cost.

3
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• Value chain analysis is essentiallower costs in
  inbound logistics, operations, outbound
  logistics, marketing, service, as well as in
  support activities. Not all organizations can do
  this, and hence this is the basis for COMPETITIVE
  ADVANTAGE.
• Costco versus Sams Club
• Walmart versus Kmart
• Also must have a value chain analysis of the
  target market so that the cost advantages that
  matter to the target are identified.
• Cost leadership value chain example

4
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• What is Product differentiation?
• Value chain analysis to determine how and where
  product/service differences can be adopted that
  MATTER or are valued by the target.
• Value chain example.
• Requires investment in knowledge of the target,
  precise identification of the target, and
  knowledge of competitors.
• For these reasons, product differentiation is
  costly and difficult.
• Essential.
• Identify your target and how product/service
  differentiation will be valued by the target, how
  your venture will provide it, and why your
  competitors will not be able to provide it.
• This is your major source of competitive
  advantage.

5
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• Business Plan
• Monday, March 10thpresent key problems you face.
• Wednesday, March 12thplan due and presentation
  by all teams10 minutes, time your self.
• Use Green Sun, Inovest, or other plan examples as
  guides, as well as Timmons, Chapter 6.
• Plan should include
• Title, team, table of contents
• Vision and mission statements

6
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• Executive Summary
• The problem, the opportunity, the client, how the
  problem is addressed for them, returns to
  investors, core competencies and competitive
  advantage, team.
• Body of the Plan
• Opportunity, size of problem, size of the market,
  timeliness, growth, value to target and value to
  investors, rates of return and time to payout.
• The solution you offer
• Firm legal structure

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Competitive Strategies and Business Plans for Eco
Entrepreneurs

• The team and member qualifications
• Target marketdetails
• Marketing strategies, pricing
• Industry analysisnature, competitive pressures
  (buyer, supplier power, rivalry, entry,
  competitive pressures within the industry), SWOT
  analysis of competitors
• Financialssales, costs, break even, rates of
  return, assets, liabilities
• Competitive advantageteam, barriers to entry,
  core competencies, value chain analysis, IP
• Key strategiesproduct/service differentiation
• Risk analysis and contingencies.

8
Competitive Strategies and Business Plans for Eco
Entrepreneurs

• Time line
• Exit strategy
• Appendices
• This is a tangible product that you can show to
  any potential employer.