Competitive Intelligence? What’s competitive intelligence? According to Wikipedia, “Competitive intelligence (CI) is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization.“
For the day to day, it means understanding what your competitors, direct and indirect are doing, how big their war chest is, whom they’re hiring, and then trying to figure out how you can outcompete them based on your realities. Competitive intelligence is an ongoing process. It is about accumulating relevant knowledge that your entire executive team can implement into the overall company strategy. (more…)
“Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.” reads the inscription at the James Farley Post Office here in NYC, and perhaps it was true in 1912 when the building was erected but a hundred and two years later, the USPS has seen a bit of vision misalignment, or at least they ought to consider chipping away at that whole “swift” thing. Does the USPS need to hire ogistics planning consultants, the TL;DR is yes, but here’s the why. (more…)
Design should never compromise functionality, nor should functionality ever compromise design
Design is something that startups tend to miss, forget about, or pay little attention to. This is especially true for those with an engineering background.
Engineers tend to think that as long as it’s functional, and works right, it will appeal to the masses. These engineers forget that the majority of the population are not engineers. They’re everyday folk, and if your product targets the masses, one of the best pieces of advice we can offer is – DON’T SKIMP ON THE DESIGN.
Remember the Volvo’s from the ’80s and ’90s? Great cars on the inside, but ugly, real ugly. Then comes Ford, buys the car division, redesigns the body and sales go through the roof, the cars, are now not only safe but cool. (more…)
When you’re developing a service strategy, you have to take a number of things into account. In this post we’ll cover what those things are and how you can apply them.
The first thing to note in developing a service strategy is to identify who exactly is your customer, and what is their perceived value to the service that you’re offering them. Undeniably whatever industry you enter you’ll have competition, be it from a direct competitor, i.e. a new MVNO operator who enters a market that is saturated with MVNO’s or from substitutes, a MVNO whose potential substitutes are landlines, phone cards skype an other VOIP services, and as such you’ll have to identify the customer that would want to buy your product specifically as opposed to those of your direct competitors and substitutes.
To effectively identify your customer take into account these two concepts.
The Service Qualifier: Those Aspects that must be satisfied to a minimum level to hold a position in the market that is alreay defined by other market players. i.e. low drop rate for a MVNO, service coverage, or access to a wide range of mobile phones.
The Service Winner: The competitive dimension used by the customer for a final choice between several competitors. i.e. the costs of SMS’ or phone calls, local, international, etc…
At the end the criteria for selecting a service provider will typically fall into one or a group of the following offerings.
Availability, Convenience, Responsiveness, Personalization, Price, Quality, Reliability, Reputation and Safety.
If you’re a startup, chances are that your quality, reliability, reputation, and safety track records are non existent, these are things that are inherently a part of word-of-mouth marketing, and that you’ll have to build them up over time. At the same time depending on your distribution medium, availability of your service may be an issue as well. Which is why knowing your customer is just so important.
But how do you know who your customer is? This all falls into doing the proper marketing, and breaking the market down into segments. But what is a market segment you ask? and for that matter what is market segmentation?
A market segment is a a group of individuals that is distinct from other segments, has a specific need, responds similarly to market changes, is homogeneous in expressing its needs and can be reached via market intervention. In layman terms it’s the people who you are selling to, it’s your customer base.
To get your market segment you’ll need to do the following.
Research – Discuss, Observe, Interview and Survey those individuals who you assume would be your target customers, and based on their inputs and your findings you’ll be able to identify what is important is to those individuals you’re targeting. Be it Availability, Convenience, Responsiveness, etc… etc…
Be sure to structure your questions and research in a way, that will ID the problem, get you valid information on the current market, any alternatives, driving purchase decisions as well as post purchase behavior. After all, getting customers is one thing, retaining them is another.
Now that you have all those findings, identify two variables that are the most important to your customers, are they image consciousness, price sensitivity, customer service, support, what have you.
Once you’ve identified these who, we recommend putting together a quick 3×3 matrix on a piece of paper, and identifying where in those 9 boxes based on those 2 variables your target customers belong, and boom, market segmented.
Easy peasy right? Good. But now it’s time to start thinking about the strategic vision of your service concept, these are the Service Qualifier and Service Winner we mentioned, and then the operations strategy. How will you develop, operate your service and finally a delivery system. Will you sell your services online, will it be a very personalized person to person thing, do you need a distributor, do you need a store? What about the sales team?
Remember, the design of the strategic vision of a service company goes something like this.
Target Market Segment -> Service Concept -> Operations Strategy -> Delivery System.
In 2002, Joan Magretta published a very interesting article in the Harvard Business Review titled “Why Business Models Matter”, this was right after the internet bubble burst and your everyday investor was keen to stay away from anything and everything that could in any such way be associated with the dot com boom, the term “business model” was one of these and the sheer sight of a “business model” ran shivers down people’s spines.
However, Joan made a very good observation, this was that a “good business model begins with the insight into human motivations and ends in a rich stream of profits”, and whether dot com companies were here to stay, one could not disagree with the fact that human motivation will lead to some form of behaviour, in this – one that leads to purchases. Which is in the end a business model.
Telling a Good Story
Creating a business model is like telling a story. Take the example of J.C. Fargo, the president of AmEx who in 1982 during a European vacation identified the need for the travelers cheque.
The story associated with the business model was easy peasy for customers to grasp. For a small fee, the traveler could buy a secured against theft product that was convenient as it was widely accepted. On the other side of the table, AmEx was a trusted name, and businesses happily accepted the cheques, as more businesses accepted the cheques, and more individuals used them, more businesses would subscribe as not to stand on the sidelines and get in the game.
As for AmEx, well, we don’t have to go into details, but surely the equivalents of an interest free loan from customers and the nearly risk free nature of the business (customers always paid in cash), made this one of AmEx better business ideas.
But what’s all this have to do with business models? It’s simple really, a business model represents a better way of conducting something, improving on the current alternatives, it may offer value to a group of customers, or it may revolutionize processes until someone else revolutionizes those processes. In the end it tells a story about how something can be done better than it is now.
Doing the Math: The Numbers Test
Does it add up? Are your profits more than your losses? What is your burn rate? How long until you’re out of the red? Will my customers buy my product or service? Changing something and making it better is one thing, there have been millions of Euros, Dollars, Pounds, Yen or whatever currency you’d like to use, thrown at project that were simply put unsellable. These projects had great technologies behind them, they were innovators in their fields, they were new and something truly special, but they flopped.
Why? Because no one bought them, many were simply too expensive, i.e. various online grocers who’d bet that consumers would pay more for the same jar of jam if it could be delivered to their home, or in the 1980’s when Sears decided it would give its customers the option to purchase financial products. Why anyone would purchase an investment to add into their portfolio while shopping around for a car tire is beyond me, but hey, the exec’s thought it’d work. It didnt.
The moral of all this is basically, 1. Tell a good story, see if there’s a need and reason to develop a product or service you’re thinking about developing, who will your customers be, and will everyone involved benefit, and 2. will it be profitable based on a series of critical what-if assumptions focused on your business and product.
And if after all that, you’ve still got a green light. Well… then it’s time to think about scalability and strategy.