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Trump University Entrepreneurship 101: How to Turn Your Idea into a Money Machine, Second Edition by Michael E. Gordon

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Plan for the War with Your Competitors
all of your competitors, as well as the industry dynamics. That knowledge will
give you insights to pursue your own opportunity in a way that can maximize
your chance of success and profitability. You can absorb your competitors’
best practices.
Is the opportunity you’ve identified in a good or a bad industry? You can
use the checklist in Exhibit 10.1 to find out.
No matter what the nature of your industry, your challenge is to figure out
how you will gain competitive advantage. When the customer has choices,
why would you be the preferred supplier? (see Chapters 15 and 21).
Competitor Sleuthing
The Art of War was written by Sun Tzu, a mysterious Chinese warrior-
philosopher, more than 2,000 years ago.
3
His writings teach us to achieve
victory over our enemies through understanding the opponent’s military lead-
ership, organizational efficiency, vulnerabilities, momentum, strengths, and
many more parameters. This is competitor sleuthing. The more you know
about your competition, the better prepared you will be for the coming never-
ending battle. Knowledge is power!
Begin competitor sleuthing by defining your geographic market. This is the
actual geographic region in which you will compete. Recall Maria’s beading
business from Chapter 5. Her business was going to be local, perhaps within
a 5- to 10-mile commuting distance of Brookline, Massachusetts. Our plastics
injection-molding business was regional; the majority of our customers and
competitors were located in New England. The geographic market for our
static-control business, in contrast, was global; we had sales representatives
and distributors in North America, Europe, and Southeast Asia. My web
business, www.AngelDeals.com, is virtual and global.
Once you’ve defined your geographic market, determine which firms you’ll
be competing against. For each of these, systematically analyze the following:
strengths, weaknesses, strategies, size, market share, similarities and differ-
ences of products and services, business designs (how they make money; see
Chapter 11), methods of competing, market penetration strategies, customers,
and best practices to copy.
There are many ways to obtain that information about your competitors.
Here are some that I have found useful:
r
Competitor Web sites: This method is immensely productive; your
significant competitors will certainly have web sites. Use a few differ-
ent search engines, because many of them employ different searching
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Downloadable Exhibit 10.1 Industry Analysis Checklist
*
What You Need
to Know
Specific
Analysis
Your
Conclusions
Growth rate and stage
of your industry?
Emerging, rapid growth,
flattening, maturing, declining
Present size of total
industry?
If you had every dollar of
sales for your product or
service, what would your
total sales be?
Is the industry susceptible
to disruption?
Are there emerging industry
threats?
Is it a good industry? Growing, opportunities for new
developments: Will you be able
to gain market share?
Is it a bad industry? Stagnant, dominated by
powerful competitors, in
decline, impenetrable
Do you have competitive
advantages that can
enable market
penetration?
Why would buyers do
business with you? Are you
unique?
Buyers: Nature of their
power?
Do buyers control the industry?
How do they exert control?
Suppliers: Their power? Do suppliers control the
industry? How do they exert
control?
Substitutes: Who are
they?
Are there substitute products
that you have not considered?
New entrants: Who are
they?
Who else might come into this
industry and disrupt the
balance?
Can you gain sales
and market share?
If you cannot capture
customers on an increasing
basis, the industry may be
unfavorable, or your products
may be lacking.
Other specifics to
your industry?
Source: The Center for Competitive Success, www.CompetitiveSuccess.com, “Industry Analysis
Checklist.” Copyright
C
2000 by Michael E. Gordon. Used with permission.
*A blank version of this page can be downloaded from www.trumpuniversity.com/entrepre
neurship101 for your personal use.
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