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15 Cards in this Set
- Front
- Back
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The Core Three (Four) |
Customers Company Competition (Product) |
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Customer Questions |
1. Who is the customer? 2. What does each customer segment want? 3. How price sensitive is each segment? 4. What distribution channel does each segment prefer? 5. What is the customer concentration and power? |
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Who is the customer? |
1. What are the customer segments? Ex. women 2. How big is each segment? Ex. 30 million 3. How fast is each segment growing? Ex. 10% annually 4. What percentage of the market does this segment represent? Ex. 2/3 of buyers are women |
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What is the customer concentration? |
Customer concentration describes what percentage of your business is made up of your top 3-5 customers. Ask: How many customers exist and how big or small are they? |
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Customer vs Vendor power |
With a highly concentrated customer base your strategy is often dictated by the key customer needs and preferences. If vendors are more concentrated, then they have the power to set high prices, and customers have no choice but to buy at those prices. |
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Company Questions |
1. What does our company do well? 2. Where does our company excel compared to competitors? 3. What distribution channels do we utilize? 4. What is our ratio of fixed costs to variable costs? 5. What intangible assets (brand name, reputation, culture, value proposition) do we possess? 6. How is our company doing financially? |
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Competition Questions |
1. How do our competitors behave? 2. What is the competitor concentration and power? |
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What is the competitor concentration? |
Competitor concentration describes what percentage of the market is made up of your top 3-5 competitors. Ask: 1) How many competitors exist and how big or small are they (in terms of sales or market share)? |
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Between us and our competitors, who hold the power? |
Power typically comes from two places: 1. A dramatically lower cost structure that can support lowering prices while maintaining profitability 2. A concentration so high that customers have no alternatives (competitor can raise prices and “force” customers to buy because they have few or no other choices). |
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How do our competitors behave? |
1. What strategic choices do key competitors make? 2. What are our competitors doing better than us? 3. Who are their customers? 4. What products do they offer? 5. What distribution channels do they use? 6. What pricing strategy does our competition utilize? 7. What intangible assets do our competitor possess? |
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What are our competitors doing better than us? |
Once you know options include: 1. Beating your competitor in its area of strength 2. Refocusing your client’s business on a competitor’s weakness |
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How much power do suppliers hold in this industry? |
A concentrated supplier environment means suppliers may wield enormous influence over how a company operates. Keep in mind that a competitor may act in response to the dictates of a handful of powerful suppliers. |
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Investment Questions |
1. What does it cost us to invest in this (new option)? 2.How does our company's organizational structure (existing infrastructure, chain of command, global presence) affect its ability to implement this change? |
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Industry Questions |
1. Are there barriers to entry in this industry? 2. How much power do suppliers hold in this industry? 3. What is the regulatory environment? |
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Market Questions |
1. How big is the market? 2. Is it growing or shrinking? 3. How profitable is the market? 4. What is the probability of success in this market? |
