Acquiring data to map the market in which your company operates in order to have an accurate position of the firm versus existing competitors is an ongoing requisite. The process is dynamic, as increasing market share, a key element for success, requires simulating the evolution of all actors in the market, and therefore to have supreme intelligence on strengths and weaknesses of each. The fundamental purpose is to optimize the value proposition to the segment of customers you target best, and craft differentiators that will define the segment you can “own”.
One must never underestimate the adversary. J&M Lab is here to help you analyze your market with a critical view. So many entrepreneurs rely upon an over optimistic view of their strengths and of competitors weaknesses. Assessing how loyal some competitors’ customers are can make you avoid costly mistakes. This is especially true in B2B offerings.
1. Competitive Positioning
Competitive analysis is an indispensable tool to project the landscape in which a business is marketing and selling a product or a service. There are multiple layers to a competitive analysis. The first layer gathers all the apparent direct competitors. However, a good startup, by definition, has no direct competitor as it launches a product with a novel technology addressing a recognized problem that a certain population (consumers or businesses) faces.
The second layer covers the indirect competitors who serve that population with an alternate solution but do not really solve their problem. Some are the disrupted firms. It is important to assess the strength of these firms, their capacity to react, the resources they can apply to potentially exert a power of nuisance. Others are startups who engineered a new approach and partially solve the problem. It is your ideal competition and a comparative matrix of strengths and weaknesses between your offering and theirs generally illustrates the differentiator in your value proposition to the customer.
The third layer, harder to identify, covers the competition in the waiting. These are generally bigger businesses that are watching the emergence of a new market, who will consider entering the field of participants once the market has reached a certain threshold. They operate in adjacent market and have considerable resources to bring to market a competitive product and quickly gain a significant market share. It is to be accepted that your startup addresses a market segment with a high estimated growth, therefore your own success will inevitably attract the interest of such competitors. You must be prepared to build a moat against them.
2. Market Trends
Analyzing market trends brings a valuable perspective on the how and the why of the evolution of the market you serve. Customer responses to changes in technology, changes in processes, or changes in attitudes are key indicators that must be well understood. Disruptions are triggered by various factors, bringing obsolescence when it was not expected. Startups are well advised to stay on top of the analysis in order to create a new rule in the game. Are there leaders in this market? How can they be tricked by a new entrant? Do they have the capabilities to lock you in and expose your products, hence your business, with the wrong image? Characterizing the drivers of the market is the most appropriate starting point. Then assessing how the main actors have either been proactive or have reacted provides relevant data to best position your product/service and anticipate your next two moves to be the disruptor.
3. Pricing
Our experience with startups is that pricing is decided frivolously without serious consideration to the value brought to the market. A startup, by definition, is solving an issue so far unmet by any offering. Assessing what value your customer may assign to your startup product or service is a fundamental, hardly trivial, task worth spending weeks, or even months, in order to come up with the right pricing strategy. Technology startups are not in the commodity business where a lower price than competitors' is the only differentiator that can yield a higher market share.
We attach considerable importance to pricing and assist our clients in moving out of their idiosyncratic views on pricing.
4. Co-opetition
How to achieve win-win situations between two competitors? And why? Cooperating with competitors on some issues does not mean you are not fiercely competing against one another on other issues. Each competitor adds value to the total market, as well as the absence of one competitor retrieves value to the market. We help our clients identify the complementing parts between their venture and competitors’. We also argue as to when it may be useful or not to ally and swim together in a bigger pool. And for how long, because positions never stop moving.