Potential Entrants:
Businesses that are easy to startup and will increase rivalry and competition. For example there are many bars in Jamaica per square mile, as its an easy business to start up. Another example is an increase of vendors selling fruits (one that I love by the way) but you find that they tend to be centralized, selling side-by-side, so its good for me because I get to pick, chose and refuse but it's bad for he first individual who saw an opportunity and tried to fill a need, as now his competition rises.
Here are some key things to pay attention to when looking at Potential Entrants:
- Brand Identity: some people stick with the brand that works for them. Why should they switch to your brand? Especially if the company has been around for years, like Grace or LASCO.
- Switching Cost/Maintaining Cost: do this by doing a cost structure. Look at your profit margin, then at the prices of similar products both locally and internationally, then decide if you want to keep your current price for another year to facilitate customers despite of increase in the price of your materials or do you want change or switch your prices each time a raw material goes up? At this point I suggest that you structure your cost to facilitate increases that may occur on the manufacturing end.
- Access to Distribution: Corporate Business have a great distribution channel and seeking to partner with with one may just be what you need. I still searching for a distribution company here. In the meantime use Sales Representatives, friends and relatives. Get people talking abut your service and products. get your little piece of the pie to aid your distribution. Spread your wings. Don't be afraid to approach businesses and individuals. Don't be afraid of rejection. Someone will say yes :)
- Expect Retaliation: see what's coming before it hits you. Watch your competition and make preparations for their comebacks. Be ready and WILLING TO CHANGE to meet the market demands. Its like Digicel and LIME competing here in Jamaica, each trying to offer a better plan, better rates, better marketing strategies. And some things might work and some things won't. Let's use the same Companies. From my observation Digicel uses more young, vibrant and fresh faces to market their products, while LIME uses veterans whose voices are spectacular when your hear them, but not so appealing to the eyes when you see them. they should change the people we see and use the voices we hear. Digicel makes try to appeal to people from a different demography, geography and psychography, while LIME needs to improves on this area greatly. I use both service providers. But I think LIME needs to Retaliate much stronger.
Substitutes:
Substitutes are competitors. If the customer doesn't use your product or service then they will use another. Buyers tend to substitute for varied reasons, some being affordability, quality, better customer service, quantity, trends and so on. Why should a customer not use a substitute to your product or service? What makes you SPECIAL or UNIQUE?
Buyers:
Bargaining Leverage: can customers bargain with you or you with them? I know some friends who buy slippers from a vendor than from a store because they can always negotiate a price lower than the offered price. Is there credit available or not. I like layaways I think its great bargaining. So for Example at Lucky Dollar you can do a layaway (product remains in the store until your payment is completed over a given period, with no increase on the initial price). You might prefer something else, Courts offers higher-purchase which is exactly what the name suggest, you pay a 'higher' price for your product over and extended period but you get to bring it home right away.
Buyer Volume: the more people are aware of the product the more they purchase and the closer you are to reaching your target audience.
Buyer information: Let people know the great things about your products or service. Who? What? Why? Where? When? Are important questions to answer.
Price Sensitivity: How do you price your products or services to attract buyers?
Suppliers:
Are there substitute suppliers? Are their prices better? Have more than one supplier of the same thing you never know what can go wrong. If you are the supplier, reliability and quality are very important. I find it quite easy to be able to sit in my house and have suppliers deliver to me. It saves me time and money, especially if the businesses are far away.
No comments:
Post a Comment