Posts tagged "competitors"

Strategy

Chess

0 Comment read

“The chessboard is the world, the pieces are the phenomena of the Universe, the rules of the game are what we call the laws of Nature and the player on the other side is hidden from us” Thomas Huxley

Chess is a game that fascinated me during my teenage years. Like most strategy games, the rules for the game are fairly straightforward and, anyone can learn the basic rules of the game with relative ease. Developing deeper insight into the game is a completely different ball game. I developed an interest in the game after seeing a chess tournament in school. Seeing two players go at each other, in a mental dual was rather exciting. My learning was accelerated as I played against the computer initially, and spent countless hours learning to understand the intricacies of the game. Chess has many parallels to strategic thinking, and is often quoted as being “the” strategy game to play. Some of the parallels are:

1. Preparations and Foundations: I spent a lot of time studying the games of the grandmasters. This expedites and accelerates learning of the game. What is important at this stage is that you take the time to understand the reason for the  moves, and the rationale behind them. It takes much time to learn and understand certain opening formations and moves. The same applies to strategic thinking, we need to ensure our plan is backed with substantial research and thought, before we begin execution. 

2. Patience: One rash move in chess has the potential to unravel the entire game. It takes much patience and restraint to avoid making certain decisions without fully understanding their implications. A lack of patience  usually indicates a weaker player, one who is not thinking through the moves, and is often without a plan. Such players only evaluate the game on a move by move basis. I see this happen oftentimes with start-ups and younger organizations. Many of them are looking for instant results and success. Working towards such targets they often make rash decisions, don’t stick to the plan and give up too early. 

3. Sacrifices: Sometimes, we need to make sacrifices in chess to gain a position advantage, to get a win. Sacrifices and exchanges take place when a player is thinking past the monetary value of each piece. What often happens is that if your opponent is just looking at the game from a basic level, and is only concerned about collecting material, this is a perfect vulnerability to exploit. In business as well, we sometimes need to sacrifice current profits or even business units to help strenghten our position in the market. These are difficult moves to make and require foresight and trust in your instincts.

4. The Bigger Picture: When an opponent loses sight of the board as a whole and begins to only concentrate on a particular area he/she is attacking or defending, this is another exploitable vulnerability. It is critical to use all your pieces to their maximum potential during the game. This is a vulnerability that one will find in many strategic plans as well. The organization becomes so focused at times on one particular division that it fails to pay attention to what is happening on a macro level. By the time they zoom out, the damage is done and has the potential to be critical to the business as a whole. 

Listed above are just some parallels which can be drawn from the game of Chess. It is a game I recommend to all entrepreneurs. It can be studied on your own, and provides you with the ability to flex your analytical capabilities on a daily basis. It also tests your endurance and discipline levels, which are critical characteristics for all entrepreneurs. 

Inspiration Strategy

Developing Strategic Thinking

0 Comment read

“I hear and I forget, I see and I remember, I do and I understand.” Confucius 

Strategic thinking is the ability to look at a situation from multiple angles and find potential opportunities therein. It requires keen insight into the playing field, the players, the circumstances and the way related events, affect your position. Personally, I find such analysis invigorating, this is a key motivating aspect in my becoming an entrepreneur. Is thinking strategically something that you are born with? Or, is it something that can be learnt ? The answer to this question has been tackled by several noted authors and management gurus Most of their answers lie somewhere in the middle of these two questions. I agree entirely with them. Thinking in this manner comes naturally to some, and takes time to develop in others.

The key is, to continuously flex the brain muscles, and get into the habit of looking at situations from different angles. Through such a process, one is able to unlock dormant capabilities and to further develop inherent capabilities you may possess. One of the most enjoyable and instructive ways to develop this capability is to play strategy based games. I have enjoyed doing so since I was very young. Even though I was young, and totally naive and unaware to many of the fundamental concepts introduced in games like bridge, monopoly and chess, a subconscious learning was taking place. I was learning concepts of team work, planning and understanding your opponent.

Over the next week I plan to outline five of my favorite strategy based games. Games I have been playing for a long time. Playing card and board games is something I remember spending a lot of time on. Being an aggressive competitor, I learnt about losing gracefully, planning and endurance. Today, these skills are key drivers which push me forward and most importantly, help me keep an eye on the larger picture. I would be most interested to learn about strategy games which you play, and have played, games through which you can draw parallels to the business world. I hope you enjoy this series. 

 

Marketing Strategy

5 Steps to Writing a Marketing Plan

0 Comment read

“As real estate is location location location, marketing is frequency frequency frequency.” Jay Conrad Levinson

Marketing is a critical component of any business strategy. Unfortunately, it is not often given the importance it deserves. This is due to a multitude of misconceptions. For starters, it is treated as a cost instead of an investment. Using this stance, it is often one of the first things to take a cost cut when controls becomes tighter. Secondly, younger organizations hardly ever commit to long term campaigns with consistency, primarily because of lack of instant results. Along with a few other misconceptions involving lack of expertise and experience, marketing is often left on the back burner. If you are a startup or an upcoming organization, please bring this component to the fore.  Listed below are five steps to get your marketing strategy in place, with a plan.

1. Situational Analysis: Prior to starting any marketing campaign, it is essential you do a thorough analysis on the industry you want to operate in. Facts such as market share, growth, trends and economic policies are critical pieces of information. Next, find out about the entrenched competitors. Who are they ? What is their market share ? How fast have they been growing? Find out about major distributors in the industry, discounting policies, strategic alliances and any other information that may help you get a better understanding of where you may want to take a stance. To read more about doing a thorough situational analysis please click here.

2. Marketing Objectives: Every plan needs to have specific goals and targets that it wants to achieve. Use this section to plan what your organization’s major marketing objectives need to be. This could include market share, customer acquisition, customer retention, website traffic or expected ROI on certain marketing tactics. These need to be thought through, and be strongly linked to major objectives set out in your business plan. To read more about setting marketing objectives please click here.

3. Marketing Strategies: This section is a major component of the entire plan. The marketing objectives outlined in the previous section, need to be translated into strategies now. This is best done by segmenting the market, and identifying areas that can be most effectively targeted.  Correctly positioning yourself in the market place, and ensuring a differentiation strategy to the entrenched competition will be an added help. To read more about correctly formulating marketing strategies please click here.

4. Marketing Tactics: After formulating broad strategies regarding marketing stance and positioning, we need to convert them into executable actions. These can be done effectively using the 4P’s structure, which helps identify executable strategies for the product, price, placement and promotion. Each section can have specific strategies to help market the product/service and reach designated targets. To read more about specific marketing tactics please click here.

5. Marketing Budgets & Controls: The last section requires the marketing budget to be structured. This budget must be strongly correlated to marketing objectives and be allocated accordingly. There needs to be a strong focus on controlling costs and creating feedback loops to ensure that relevant information is being gathered, to help identify the most effective tactics. This budget must be treated as an investment and should therefore be pegged to ROI figures. To read more about marketing budgets and controls please click here.

These five steps constitute a simple marketing plan. The entire objective of this exercise is to bring structure to marketing activities, as well as to have clearly defined goals for what we expect it to do for our organization. Marketing is not limited to super bowl ads or billboards in Time Square. It requires you to be creative with the limited budget allocated. It must be used in such a way that activities are continuously monitored and tracked, and at year end, provide a significant ROI. Just make sure you stick with the marketing plan and do not bail out halfway through. Two things your plan should incorporate, consistency and SMART objectives. Best of luck!

Marketing Strategy

Marketing Budgets and Controls

0 Comment read

“An important and often overlooked aspect of operational excellence is regularly comparing actual costs to budget assumptions – not just the numbers in the plan. Understanding assumption deviations will help improve the accuracy of future forecasting.” Bob Prosen

Budgets are a necessary evil, they draw boundaries to ensure we know how far to go with the marketing plan. With entrepreneurs , the boundary perimeter is often small and limited. This calls for ingenious tactics to make full use of creative and deal making mindsets. The budget of a marketing plan is directly correlated with objectives set by the team. The progress towards those objectives, must be monitored constantly by using control measures. These measures act as feedback mechanisms to help identify each tactic’s input. There are a few things I like to keep in mind when in the midst of setting budget and control measures:

1. Are our objectives and marketing budget in sync?: For a new business, it is important to outline realistic and attainable marketing objectives. I am all for optimistic and large goals, however, often these objectives are set without necessary resources allocated for realistic follow throughs. When discussing numbers, this is a good time to go back to objectives, and see whether attaining a 3% market share with your marketing budget, is a realistic target.

2. Have we committed more than 35% of our budget to one particular tactic, if so, is it justified?: I once had the misfortune of committing a large part of my marketing budget to running print ads in a particular magazine, specific to my target market. Unfortunately it didn’t go as well as planned, since then, I have made sure that committing a large part of the budget to one tactic or promotional activity is based on substantial research.

3. Have we established tactic specific controls?: As entrepreneurs we do not often have access to a lot of funds in our marketing budgets. It is hence essential, to ensure that control measures are established for every tactic, to maintain monthly or quarterly monitoring. If you notice the tactic is consistently not delivering as planned , adjust the plan accordingly. Having control measures in place also forces the responsible individuals to provide constructive feedback.

4. What is our expected return on investment (ROI) on our marketing budget?: This is a complex topic, and has been written about widely. To keep it simple, we have to look at our marketing budget as an investment rather than a cost. Whenever we make an investment, we look for a certain ROI to justify it. We must do the same for our marketing budget. Keep tracking your investments meticulously, and see how to improve on your investment to ensure your expected ROI. This must be discussed with the finance people at the company. I have found, they remain impartial and are able to see the forest from trees.

A well defined marketing budget can be the difference between, a good and a great result. If you have not developed one for your company, there is no better time than, now. It is important to keep in mind, that funds are wisely invested, and that you have the ability to adapt to feedback along the way.

Marketing Strategy

Marketing Tactics

0 Comment read

“We can never have enough strategies. We have enough tactics but not enough strategies.” Matthew Dowd

After all the research and strategizing is done,  the strategies need to be translated into executable actions. It is important to remember that without the effort that goes into correctly identifying strategies for your business, marketing tactics will not work. Their success is largely dependent on how clearly and thoughtfully the strategies have been laid out. Once you have established goals, objectives and marketing strategies based on segmentation, positioning and differentiation,  selection of marketing tactics can begin. The first thing that comes to mind about tactics, the 4P’s ( Product, Price, Placement, Promotion ). The next thing that comes to mind is the lecture I had regarding them, then it becomes fuzzy.

I am all for structured frameworks, however, structured frameworks should enable you to develop executable strategies. If they become roadblocks, you have a problem. So keeping the 4P framework in mind you can devise tactics to drive sales and push your company further. These are four questions I like to ask when determining marketing tactics:

1. What is unique about our product/service that our customers should know?

For example, the MacBook Air did really well ( I really admire Apple’s corporate branding efforts). They brought out an ultra portable laptop and when it was revealed to the world, it came out of a manila envelope. Such a simple, yet effective introduction, made this product the talk of the town.

2. What is our price point strategy and why?

As mentioned earlier, competing on price is a losing strategy, one which entrepreneurs frequently use unfortunately. The inability to set correct price points can make or break a business. Pricing strategy must be based on comprehensive market research and comparison. Take a look at the competition,  then take a decision on how you want to be perceived by the market. Use pricing as a strategy to help slot you in a particular segment in the customers mind.

3. How are we going to get our product/service to our target segment?

According to objectives regarding volume, there needs to be identification of channels, to reach those targets. Do a thorough analysis of available channels of distribution, target those which can be used most cost effectively. However, keep in mind, the more channels you open up, the more resources required. Choose your channels carefully, focus on developing them to reach their potential.

4. How best can we promote our product/service to our target audience?

This is the segment that entrepreneurs need to get creative about. We usually don’t have large marketing budgets at our disposal, hence need to come up with ingenious ways to promote ourselves. One book which I would recommend to entrepreneurs with tight marketing budgets is “Guerrilla Marketing” by Jay Conrad Levinson. It is full of ideas which can be used by organizations on tight budgets.

These questions should help spark conversation,  and get you to think about marketing tactics to be used. Remember, remain focused on bottom line objectives, it is easy to slip into heated discussions about specific tactics and forget about end goals. Marketing can be simple and complex, it is advisable that at the onset of your entrepreneurial ventures, to keep things simple!

 

Marketing Strategy

Marketing Strategies

0 Comment read

“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” Sun Tzu

Strategy and tactics formulate the heart of a marketing plan. What happens is, these two sections are often thought of as one. This is a critical error. These two segments are interlinked closely, they do however, serve two very different purposes. The marketing strategy segment, uses marketing objectives discussed earlier, as end goals, which need to be achieved. In order to reach those goals it is not however advisable, to start planning how many brochures you require to be printed, or your next marketing seminar. Before you go into any of these detailed tactics, you need to take time out to think through the best ways to reach your goals. Some important points to keep in mind when developing your marketing strategies are;

1. Market Segmentation: Identify a niche in the market where you will be able to use your strengths to their maximum potential. I know first hand, treating everyone out there, as a potential customer is appealing. However, as a startup with limited resources, you need to focus on one segment initially. This will allow you to consolidate your efforts and resources. It is true, putting all your eggs in one basket may appear risky, but experience says, a startup needs to be focused from the beginning, getting distracted by other potential opportunities usually gets you into deeper water than can be handled.

2. Positioning: Once you have identified the segment you will be operating in, the next step will involve a most important aspect of your marketing plan; positioning. Who is your target customer and why? What benefits can you provide to them as compared to taking a completely different positioning stance? For example, If you are developing a new media company, have you positioned yourself in a manner which provides a certain segment more value?  Positioning will be a reflection of your organization identity. Make sure you do this step correctly, it has long term impact.

3. Differentiation: Once you have selected a segment, and certain market positions, you are likely to find direct and indirect competition. This is the time to think how you are going to differentiate yourself from the others. For example, if you selected the educational segment of the market for your company events and positioned yourself to specialize in planning graduation ceremonies, what will set you apart from other events and companies who provide the same services? Some differentiation points could involve the development of a unique alumni website or specialized gifts for every graduate. The last thing you want to do is, differentiate on price!

Use this section to develop a strategy which will complement the objectives that you have set for yourself. It is very important that these go hand in hand to ensure desired results. By selecting a narrow niche or one too overpopulated with strong competition, will make reaching your targets that much more difficult. Once you have outlined a strategy, you are ready to drill down to specific tactics through which your strategy will be deployed.

Marketing Strategy

Marketing Objectives

2 Comments read

“The major reason for setting a goal is for what it makes you accomplish. What it makes of you will always be the far greater value than what you get.” Jim Rohn

Using the opportunities identified in the situational analysis post, we will construct the next part of the marketing plan, which includes establishing objectives. These objectives will serve as beacons to be used as guides when developing specific strategies. It is important that these objectives should be specific, measurable, attainable, realistic and time specific. Without clearly identifying targets, is like throwing darts blindfolded. Listed below are some broad segments, for which specific objectives should be established:

1. Market Penetration: Using data collected during the research phase, should give an approximate idea of the market share held by the competition. Sometimes this data is difficult to come by, in the past, my teams and I have drawn up simple lists of our major competitors when adequate information was not available. The point of this task is to identify the competition, and set realistic targets of where you want to be on that list. The important part is setting a target. GE set targets of being number one or two in a particular segment or exiting the business line.

2. Marketing Metrics: When setting yourselves objectives, it is important to use key benchmarks which you can continuously compare yourself with. These objectives can be pegged to major activities such as website traffic, newsletter sign-up rates, number of queries, pipeline activity, deal closings or sales staff turnover. These numbers will be a reflection of whether your promotional strategies are paying off or not. More importantly you can develop your promotional strategies around these numbers as well. If your current website is attracting a 1000 visitors daily, what will it take to hit your website traffic objectives of 2000 visitors? When establishing these metrics make sure they are realistic and attainable.

3. Financial Objectives: The company CFO is always wary of the marketing budget. The reason being, there are often no clear financial objectives justifying marketing plans. This section of your plan should outline specific financial targets that need to be achieved when devising your plan. This would include turnover targets, profitability targets as well as improvement of product/service margins. At the end of the quarter or year, there should be justification for the expenditure incurred on marketing. It is important for a startup with limited resources to think this section through carefully. Usually the opportunity cost is high, it is imperative that it is used correctly.

It is upto the team to set objectives in such a manner, that responsibility for certain key metrics and objectives, is person specific. It is that individual’s responsibility to continually monitor  progress and provide feedback to the team. This will create a culture where responsibility will be shared, and more importantly, will help the team realize the importance of good marketing. If you have developed a business plan, use this section to support the financial objectives outlined in it and make sure that your marketing objectives are in sync.

Marketing Strategy

Situation Analysis

1 Comment read

“A man who does not plan long ahead will find trouble right at his door.” Confucius

Marketing was one of the more exciting classes I took at college. There was however, a part of the marketing course that required a massive amount of research and data collection. Looking at the title of this post, I remember vaguely, a class I took, where we talked about this topic at great length. I say vaguely, because in all probability, I must have tuned out when the word “macro economic factors” was used. Don’t get me wrong, finding out about macro conditions before entering a particular industry is critical. However, my only complaint was, the discussions were too detailed. I experienced this when we started writing our first couple of marketing plans as well. When you go into minor details, you begin to lose focus on the end goal, a balance needs to be maintained here.

Listed below are some of the critical things I look at when doing a situational analysis:

1. The Industry: Before going any further, you need information regarding the growth rate of the particular industry. What are it’s historic trends? What were the revenue figures for the segment? Have any major technological innovations taken place in it recently? Is the industry very segmented? These are some preliminary questions of interest and importance when looking at an opportunity in a particular industry.

2. Competitors: This is an important segment, one in which you need to document as many direct and indirect competitors in the market place as possible. Look at their teams, products/services, pricing and any other marketing collateral which you can find. Remain constantly vigilant about your competitors, this is a must for any company regardless of size. Create document files which can be referenced easily, this will come in handy during later sections, when you are positioning and promoting your product as well.

3. Distributors: Is the industry dependent on any major suppliers or distributors? If this is the case, then find out maximum information regarding their operations, team, pricing and discounting practices. Developing strategic partnerships with key distributors in the market place can become a very strong competitive advantage in the market place. Dell has executed this superbly in partnerships with Intel and Microsoft.

4. Internal Assessment: If you have already developed, or are in the process of developing a product/service line, this section will highlight where you stand in the current market place. Through this section, a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is available. This analysis will also help identify your strengths, and pinpoint where you should avoid competing in the market place.

Using data assembled in this section, you will be able to identify, where you face major threats and where the most opportunities lie. It will also help you gauge market demand with a closer and more precise perspective. This step requires considerable searching and scouring for data, do this as a team,  it becomes a little more exciting!

Related Posts:

– Market Risk

Risk Strategy

5 Steps to Manage Startup Risk

2 Comments read

“I think that only daring speculation can lead us further and not accumulation of facts.” Albert Einstein

In the first post of this series, I added a video which stated life = risk. If we shield ourselves from all sorts of risks by staying in our small comfort zone we will not be living life fully. It is our perrogative to find a balance to ensure that we live life to its fullest. The points below relate how to find that balance when starting a business.

1. Market Risk: Our world is in a constant state of flux and with mind boggling technological advancements taking place, we have to be constantly aware of the changes taking place around us. This requires us to monitor our competitors, be in touch with our customers and suppliers, and watch for trends which could potentially make your business extinct. To read more about how to manage market risk please click here.

2. Operational Failure: All companies operate on a set of processes. These processes drive all avenues of business, ranging from Internal operations, business development, sales, marketing and execution to name a few critical functions. When these processes are not optimized or closely scrutinized a business will not be able to scale effectively and reach its target goals. To read more about how you can avoid operational failure please click here.

3. Financial Risk: Without financial controls a business loses its foundation and is on shaky grounds even when the company is making steady profits. Ensuring that you have sound and reliable financial controls in place will allow you to minimize your exposure to financial risks and allow your business to grow more effectively. To read about how you can add financial controls to your startup please click here.

4. The People Risk Factor: You hear it all the time, “Our people are our most important asset”. Its like a mantra that has been wedged into our sub conscious and is constantly repeated from board meetings to your daily staff meetings. However, I am always surprised that though this is such an important asset, very few steps and measures are taken to mitigate the risk associated with this asset. To read more about how you can add effective control measures to mitigate these risks please click here.

5. Lessons in Risk: Having been in this line of work for some time now there have been several risk factors which I have witnessed or experienced first hand. These cover the time you should start, what the risks of starting without a plan are and the kind of risks you have to deal with on a daily basis. To read more about these lessons please click here.

In life and business, if you stop taking calculated risks, or if you let doubt  paralyze you, moving forward becomes close to impossible. It is only when you make mistakes that you learn from them and eventually move forward. Along the way we have to manage the types of risk faced and ensure that we take precautionary measures to avoid risking it all if we do not know where we are headed. Once you know what you want and how you want to get it, take action , because thinking ‘what if’ is just about the worst thing you could do to yourself!

Advice Risk Strategy

Personal Experiences With Risk

0 Comment read

“Be brave. Take risks. Nothing can substitute experience.” Paulo Coelho

The risks mentioned in prior posts provide a framework on mitigating risk in various divisions of business. Some of the risks and counter measures mentioned in this post are general and some those I have personally encountered during my journey as an entrepreneur. 

1. Start as early as possible: The younger you are , the lower the  risk level when embarking on new startup ventures. This is a point in life when you do not have many personal responsibilities and can hence take on greater leveraged risks, for greater payoffs. There will never be a right time. If you wait around for it, you drastically reduce the level of risk you can take . 

2. Don’t start without a plan: Starting a business is a lot of fun and very exciting, however, if you do not have a solid business plan which has been well researched and developed, get working on that first. I am not a fan of shotgun startup ventures who are clueless about where they want to go and how they plan on getting there. 

3. Learn to trust your gut: There will be times when the plans looks too good to be true on paper, but your gut feeling is to be wary. On the other hand ,there are times when the pieces do not fit into place initially, yet, your gut says this is worth exploring. Learning to trust your gut allows you to hone into your inner guidance system and intuitive capabilities.

4. Don’t forget your core values: We are constantly faced with challenges where compromising on core values could lead to substantial benefits. However, going down that path poses great personal and moral risk . I have personally known someone who went down this path and ended up losing everything that mattered in his life. It was an incident which left a deep impression. Compromising on core values is one of the greatest risks you can take and one where the consequences are long lasting & long term.

Some of the concepts mentioned in this posts have many counter arguments. Such as the first one, which is to start early. Some argue that it is better to get some work experience before venturing out into the startup world. Others believe in just starting a business and hoping to eventually make some money. I would really like to hear what your thoughts about this are. Look forward to hearing from you.