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Acquisitions
Corporate acquisitions, a phenomenon that is increasingly prevelent in today’s news media. Companies will buy up smaller competitors. Others will buy related businesses to leverage the competitive advantages of each. In a heavily saturated market, acquisitions are one way to get ahead, but only if pursued correctly. Buying a competitor just to reduce competition is a poor investment. You buy a competitor when the purchase would enhance both brands’ performance. Do you produce similar goods in two different facilities? After the purchase, use just one facility and thus improve your bottom line, freeing capital for other marketing investments. Does the…
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Red Ocean Islands
If a move into a new blue ocean is impossible, consider setting yourself up as an island in your red ocean. There are techniques you can use to establish yourself as the market leader and provide a level of insolation from attack. Never be satisfied with your current products – Always fight for new product innovations and be willing to incorporate your competitions’ successful ideas. This establishes you as a thought leader in the industry and new entrants will look to your company for inspiration. Set standards – Offer your way of doing things as an industry standard. VHS was…
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Blue Ocean Strategy
My first article was a recycled business strategy essay on Blue Oceans. I wanted to recap on that by explaining once again what they are and how they can be useful to businesses in existing markets. I competitive market saturated with successful companies is best compared to an ocean heavily populated with sharks. After a while, their food source (customers) hides from the aggressive businesses that are tearing each other to pieces and making the water red. An old paradigm suggested the best way to win in this world is to be the bigger shark. The new paradigm suggests you…
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Comparative Advantage
If your market is saturated, it might be difficult to find a competitive advantage over others. Your products are likely identical, and your prices very much the same. Production is as optimized as it can be, and there are few to no differences between your and your competitions’ company structure. What you need is a comparative advantage – something your customers will see not when they look at your offering in isolation, but something recognized when they compare you to others in the market. The easiest route to take is insurance. The extended service plans on cars or computers typically…
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Staggered Entry
Any entry into a new market needs to be taken in steps – the first of which is brand advertising. You need to build brand awareness and demand for your products long before you make your first sale. This can be costly, but not nearly as much as a premature product launch. Previously, I talked about brand advertising. It is an absolute necessity when you begin to build any new brand – even when you intend to re-release an existing brand. Brand advertising builds a public knowledge of your project and creates anticipation of your product release. It is easiest to…
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TOWS
As you have probably learned by now, marketing is an on-going process of both self- and competitive- analysis. You need to understand who your company is, who your customers are, and who you are competing with – information that can stay fairly constant over time, or suddenly change overnight without warning. Analysis must start from the day you first enter the market, and there is a very effective tool for quickly understanding why you are and what you are up against. SWOT analysis is a common business tool. It’s an acronym standing for Strengths, Weaknesses, Opportunities, and Threats. In a…
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Landscaping
The first thing any entrepreneur looking to enter the market must do is survey the landscape. While standing atop a hill and peering down at the city might sound like a fun activity, this has nothing to do with the landscape I’m talking about. There are three questions you have to answer in detail before entering the market: 1) What is the market? Without a clear concept of the market (or market segment) you wish to enter, you have no grounds on which to build your brand or product. A concise yet accurate definition of the market helps you determine…
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Public Relations
PR can be a powerful weapon, but it is also a two-edged sword. Good PR can build your reputation in the community and better your chances at scoring new customers. Bad PR can damage your existing customer base and cost you much needed sales throughout the year. You can’t really predict what kind of PR your company will receive, though, so it is best to plan for the worst and hope for the best. If you keep track of your story tellers, chances are good that you will have an idea what kind of PR is coming down the pipe. …