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6 Steps To Laying Out Your Competitive Strategy

6 Steps To Laying Out Your Competitive Strategy

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Why do so many companies languish and watch as their business turns into a zero profit zone, while others seem to thrive?” />

6 Steps To Laying Out Your Competitive Strategy

Why do so many companies languish and watch as their business turns into a zero profit zone, while others seem to thrive?

When you look at your business, whether it’s a new venture or a company with a long history, can you answer the following questions?

  • What does my company do better than anyone else?
  • What unique value do I provide to my customers?
  • How will I increase that value next year?

Companies that fail to answer these questions, and don’t believe they are of paramount importance, relegate themselves to marginal profitability at best and failure at worst. But companies that can answer these questions are able to raise the value bar for their customers and reap the benefits of success.

Of course, being able to answer 3 simple questions does not ensure success, but it is an important step in creating a strategic and focused operation which leads to a successful business. With today’s business environment being so competitive, businesses need to re-invent the rules on which they compete in order to be successful. Companies like Wal-Mart have figured this out and have redefined competition in their market by delivering a unique value to a selected customer group. By maintaining a focus and discipline, they make it difficult for other companies to compete under old competitive terms.

Simply, competitive strategy has never been more important to success in today’s business environment. It does not matter what type of business you are in or whether you are small, big or just starting out, a company can not survive without an adequate and focused strategic plan to best the competition. Yet many companies fail to execute a successful strategy; it is these companies that languish in the zero profit zone.

In simple terms, for a company to achieve success and enter the profit zone it must first decide where it will stake its claim in the marketplace and what kind of value it will offer its customers. A company needs a clear marketing thrust, a precise knowledge of its customer base, and a product or service with a niche or some competitive advantage to be successful. Unfortunately, many entrepreneurs and business owners get stuck in the process of defining their competitive strategy. They often have the idea and the product, but being the technician they are not sure how to define its market. Even worse, many entrepreneurs assume or guess their target market and often glaze over a competitive strategy, usually to the detriment of the business.

So what are the steps to laying out a competitive business strategy? While there are different methods you can follow, I have laid a series of 6 basic steps to help you.

1. Financial perspective

This step may not seem to have much to do with strategy, but it is important to determine the value of success quickly. Why? Because, in simple terms if the venture can’t deliver significant returns, it may not be worth the risk, and you have to ask yourself if it is worth continuing with your business. In this scenario you complete a reverse income statement. You start by defining how much profit you want to see at the end of a certain time period, and then determine the amount of revenues needed to generate that profit and the costs to deliver that profit. Do the numbers add up and make sense? The goal here is to be objective, if the expected revenue is not sufficient to generate your required profit at the end based on an estimate of costs, don’t simply fudge the numbers and assume you can reduce costs or increase revenue. Be diligent in your assessment.

2. Understand the industry and competition

In step 2 you are going to assess your industry and the competition. This basically comes down to assessing 5 factors:

  1. Understanding who your competition is including factors such as competitor strengths and weaknesses, market position, pricing, new product development, advertising, marketing and branding. You should determine how you compare to your competitors.
  2. Assessing the threat of new entrants into the industry (which may include you) and any potential reactions from existing companies. There are basically 6 barriers to entry you can evaluate: economies of scale, product differentiation, capital requirements, cost disadvantages, access to distribution channels, government policy.
  3. Assessing the threat of substitute products (existing or future) that can place a ceiling on pricing.
  4. Assessing the bargaining power of suppliers who can increase prices, lower the quality of products or limit the quantity of supplies one can purchase. This all has an impact on profitability.
  5. Assessing the bargaining power of customers who can force down prices or demand better quality, more services and play you off versus a competitor.

3. Understand the Customer Perspective

In step 3 you assess your customer. This is a key step, get it wrong and you may not be able to recover. In fact, the customer value proposition and how it translates into growth and profitability for the company is the foundation of strategy.

Start by asking your self a couple basic questions: To achieve my vision, how must my customers look? Who are the target customers that will generate growth and a profitable mix of products/services?

Next, ask yourself what is the value proposition which defines how the company differentiates itself to attract, retain and deepen relationships with the targeted customers? There are basically 3 value propositions or disciplines that you can choose from:

  1. Cost leadership In this discipline you choose to provide the best price with the least inconvenience to your customers.
  2. Product leadership In this discipline you offer products that push the performance boundary (i.e. newer and better than competitors).
  3. Best total solution In this discipline you deliver what the customer wants, cultivate relationships and satisfy unique needs. In this case, you may not be the cheapest or the newest, but the total package you deliver to the customer cannot be matched.

In order to help you determine which of these value propositions you decide on, you may want to work through a value chain: 1. Determine your customer priorities 2. Determine the channels needed to satisfy those priorities 3. Determine the offering (products) that are best suited to flow through those channels 4. Determine the inputs (materials/knowledge etc) required to create the product 5. Determine the assets/core competencies essential to the inputs (ask yourself, in order to satisfy my customer at which processes must I excel? For example, product design, brand and market development, sales, service and operations and/or logistics).

4. Finish the business model

The business model shows how all the elements and activities of a business work together as a whole by outlining how the business generates revenue, how cash flows through the business and how the product flows through the business. By this time, you should understand the revenue capability of the business, how the industry works and your competition, who you customer is, what you are going to offer them and how you are going to offer it. By drawing a flow chart that shows how these activities are linked together you will understand how the business activities flow to generate projected profit, which you determined in step 1. This is also a good step to see if something is missing in your analysis.

5. Construct the business plan

By the time you get to this step most of your work is done. If you are looking for financing, a formalized plan will have to be completed. If you do not need financing, simply make sure the preceding tasks are documented so that they can be reviewed and changed as time progresses (strategy is an ongoing process, not a one time task).

6. Learning and growth perspective

In this last step, you ask yourself how/where the organization must learn and improve in order to become and remain successful. For example, determine the skills, capabilities and knowledge of employees needed, the technology needed and the climate and culture in which they work.

About The Author

You have permission to publish this article electronically or in print, free of charge, as long as the bylines are included. A courtesy copy of your publication would be appreciated. Send to:jeff@companyworkshop.com

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Coca Cola’s brand power

Coca-Cola: The Power of a Brand

Coca-Cola: The Power of a Brand

By: Bob Zurn

There are few images as recognizable throughout the world as the Coca-Cola brand. Travel to the furthest reaches of the globe and you will probably encounter it on a clock or a sign, if not on the drink itself. Marketers today look to the Coca-Cola brand as a model of marketing power. Its image has transcended national borders and cultural barriers to reach almost everyone on earth. How did the Coca-Cola symbol become such an omnipresent image?

Beginning in 1886, Coca-Cola president John Pemberton began traveling the country introducing pharmacists to the drink. At that time it was considered a medicinal substance that could relieve headaches and other minor woes. Candler distributed clocks, calendars and other items laden with the Coca-Cola logo as he toured the country, spreading the brand and selling his product.

From there the brand continued to penetrate further around the world. The bottling rights to Coca-Cola were sold in 1899 and in 1915 the Root family submitted a standard size bottle for distribution, but it was too fat in the middle. The Coca-Cola Company liked the bottle so much they thinned it down and has been used ever since and is called a Hobbleskirt Bottle. By 1920, with new bottlers springing up all the time, the brand had expanded into Cuba, France, Puerto Rico and other territories. Its world dominance would increase further with World War II, when Coca-Cola promised that “every man in uniform gets a bottle of Coca-Cola for 5 cents, wherever he is, and whatever it costs the company.” Suddenly Coca-Cola could be found throughout Europe as American GIs carried it with them, and by 1960 the number of countries with Coke bottling plants had doubled.

Today Coke remains a powerful brand with over a century of history behind it. As a result, items featuring previous incarnations of the Coke image have become classic pieces of Americana. The success of the Coca-Cola brand has made it an icon not just in the world of brand marketing but of American history. It symbolizes the popularity of a soft drink as well as the dominance of American entrepreneurialism in the twentieth century and beyond.

Author Bio
Bob Zurn and his wife Joyce own and operate Cola Corner, the leading online provider of Coca-Cola collectibles. Cola Corner provides a wide selection of Coca-Cola posters, novelties, clothing, and furniture. Visit them online today at www.colacorner.com/novelties.html to view their classic collection.

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Coke


Bringing Brand Benefits to Beer

Bringing Branding Benefits to Beer

Bringing Branding Benefits to Beer

By: Martin Williams

Ever since 1875, when the Bass red triangle became the first registered trademark, brewers have recognised the importance of on beer bottle branding, and now the latest printing technologies are being harnessed to achieve the best packaging impact for today’s brewers.

Beer bottle labels play a major role in ensuring that beer packaging has strong impact at the point of sale. Packaging technology is advancing dramatically, with innovations in the printing, production and application of beer labels, and a move away from the traditional wet glue labels to high impact self adhesive labels.

Recent developments in print technology have helped improve the aesthetic quality of self adhesive labels. High-end print techniques such as foils, special links and MetalFX provide a visually attractive label, able to fulfil brewer’s stringent brand values.

The economics of self adhesives have also been transformed with specialist label and packaging printers now available to produce high quality labels in economic short runs.

Traditional wet glue labels are applied by using adhesive on the bottling line. As they need to sit on the bottling line in a box or magazine each made specifically for a single label size and format, this process tends to limit the range of labels available.

By contrast, self adhesive label are pre-coated with adhesive and applied to bottles from a carrierweb. The process is cleaner, involves less complex machinery and can quickly be adapted to all label sizes and formats.

Traditional wet glue labels may suffer from the problems of drying out, tearing or fall off before they reach the customer. The technical specification of self adhesive materials can be tailored to ensure that each label type is fir for its purpose. By using appropriate adhesives, self adhesive labels can even be applied to web bottles on the line.

Such innovations ensure that labels remain in prime condition up to the point of sale.

Author Bio
Etiquette (www.etiquette.co.uk) are the UK’s experts in labels & labelling. For more information about beer bottle labelling, visit http://www.labelling-machine.com or buy online at http://www.thelabeller.com.

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Protecting Corporate Name is a Must for New Firms

Protecting Your Corporate Name

Protecting Your Corporate Name

By: Jonathan Brown

Imagine this: you want to sell widgets, and you’ve chosen the perfect name for your brand new widget business. You’ve made the name original and yet homey, easy to say, hard to forget, and you’ve checked databases everywhere to make sure that nobody else thought of it first. You’ve invested vast sums of money in marketing materials and storefront signs that include your wonderful new name. Best of all, you’ve already impressed some new widget customers with your amazing services and they are spreading the word that your business-yes, the one with your fabulously unique name-is the place to go for all their widget needs, bar none. You love your new name.

Then picture this: shortly after your widget shop opens for business, you learn that a guy two blocks over is using the same name, for a strikingly similar widget business. That’s your name hanging in his window, by God! Customers are getting confused. Your business begins to drop off and you suspect the other widget guy is getting the customers who were looking for you.

Is this nightmare scenario possible?

Sadly, yes-but only if you don’t know how to protect your corporate name properly.

The first thing a new business owner must do is register the name of the new corporation. The procedure for registration varies by state, but generally involves some very simple paperwork to be submitted to the state’s Secretary of State’s office, along with a small fee. The Secretary of State’s office will not register two businesses with the same name, so this procedure will prevent later businesses from incorporating in the same state under your corporate name. Registration with the Secretary of State’s office will also legitimize the corporate identity of your business as a legal entity separate from its founders, and will provide evidence to demonstrate that the name is being used in commerce when you next register the name as a trademark. Be aware, however, that a business can incorporate in any of the fifty states, so registering your business in your own state provides only partial protection of your corporate name. To provide greater protection, it is necessary to register the name as a trademark or service mark with the United States Patent and Trademark Office.

Registering your new business name with the U.S. Patent and Trademark Office will provide nationwide notice of your claim to the name as a trademark, and invokes the jurisdiction of the federal courts in protecting the name. To register a new business name as a trademark, an application may be obtained online at the U.S. Patent and Trademark website, http://www.uspto.gov. This application may either be filed online or mailed into the Patent and Trademark Office. Be aware that the processing of your application may take more than a year, so this application should be filed as soon as possible to begin the process. Status of your application may be checked online.

You do not need to wait until your trademark is nationally registered to begin protecting your right to it, however. When using your business name on marketing materials or other written matter, you can demonstrate your claim to the name as a trademark by adding a small “TM” at the end of the word. This provides notice to those who see the written materials that you consider the name to be proprietary and should not be “borrowed” by others. After you receive national registration of the business name as a trademark, however, it will receive the greatest possible protection and you may demonstrate this by including an R in a circle, “®,” at the end of your business name.

Once you have received trademark registration, you must file periodic Affidavits of Use with the Patent and Trademark Office to prove that the name remains in use. If you cease use of the mark for a period of years, you will lose ownership of the name as a trademark and others may be able to use it.

Next comes the business of “policing” your trademark. This involves online research and investigation within your own industry to determine whether your trademarked business name is being used by others in the same or similar business that might cause customer confusion as to your business identity. In that event, a judicious letter often dissuades the newcomer from using the business name. If a letter is ineffective, the matter may be resolved through litigation.

The founding of a new business is a busy time, but it is necessary to begin as quickly as possible to protect the new business name against infringement. In this way, it is possible to prevent customer confusion and retain all of the customer good will that they have come to associate with your company’s name.

Author Bio
Jonathan Brown recommends limited liability company for more information about protecting your corporate name.

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