Business Plan Preparation Frank Moyes Leeds School of
Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado Competitive Advantage 1
Tonight’s Agenda n n n n Opportunity/Need Financial COMP’s Model Company Customer Research n Importance of validation Locomotion Business Plan Elevator Speech Hand-in Interview list Competitive Advantage 2
Next Week Value Proposition n Business Analysis Assignment n Elevator Speech n In the Fire – Opportunity/Need n Competitive Advantage 3
Opportunity/Need What is the pain? n What problem is being solved? n n n Dissatisfaction with current products/services Poor quality or service Must be compelling n Must be easily understood by TM n n Must provide validation Competitive Advantage 4
Financial COMP’s n Company in your marketplace. n n n NAIC code Publicly traded Industry ratios – see Selected Resources Guide Library Key financial measures to compare when developing strategy and projections n Reality test n Competitive Advantage 5
Financial COMP’s Competitive Advantage 6
Model Company Identify company in your marketplace n Different segment, products, target market n Has done just what you want to do n Provides credibility n Competitive Advantage 7
Customer Research Revisited Do customers recognize that they need your product/service? n Are features compelling? n Criteria for buying decisions? Who influences the decision? n How much will they pay? n Why would they not buy? n Do they understand the benefits? n Competitive Advantage 8
Customer Research Revisited II Conduct 20+ interviews with users, buyers, distributors n Basis for questions should be George Deriso’s Qualitative Customer Survey n Questions will change as you learn more about the customer n Competitive Advantage 9
Competitive Advantage 10
Identify Your Resources n n n Financial: access to capital (equity & debt), cash reserves, government grants, etc. Physical assets: plant & equipment, raw materials, location, working capital, etc. Human: social, employee knowledge, experience, accumulated wisdom, labor cost and skills, etc. Intangible: patents, trade secrets, know-how, copyrights, databases, etc. Organizational: culture, contacts, policies, Boards of Directors & Advisors, suppliers, service providers, etc. Competitive Advantage 11
Identify Your Capabilities n n n n World class management (serial entrepreneur) Network - well developed, high-quality, accessible contacts that take years to build Marketing - differentiation, branding, positioning Product/service - design features & benefits Sales & distribution - rep organization Total operational approach - Dell, Wal-Mart Supply chain management - Asia contacts Relationships - regulators, politicians, investors Competitive Advantage 12
What Barriers Can You Establish? Intellectual property: patents, trade secrets, copyrights, trademarks, etc n Switching costs to your target market n Customer loyalty n Agreements with customers, suppliers, strategic partners n Control of the distribution channel n Competitive Advantage 13
Competitive Advantage Challenges n n n n Intellectual property Agreements with customers or suppliers Long term contracts Control of costs Control of prices Control of channel Location Differentiation Competitive Advantage n n n n n First to market World class management Expertise Development lead time Brand Quality Service Execution Relationships 14
Sustainable Competitive Advantage Understand the market n Understand the competition n Differentiation n Innovation n Resources & capabilities n Really understand the market & competition n Why is this so hard? Competitive Advantage 15
Competitive Advantages Most are easily copied n Entrepreneur ignorant of or ignores competition n Entrepreneur is not realistic about own resources & capabilities n Entrepreneur ignores future n Entrepreneur must be intellectually honest n Competitive Advantage 16
Sustaining Competitive Advantage Is a Dynamic Process Market, competition, resources, and capabilities are continually changing. Competitive Advantage 17
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