After Opportunity Seeking and Screening, the entrepreneur is ready for Opportunity Seizing, the final stage. By now, the entrepreneur has an idea as to where he or she will locate the business and how he or she will market the product or service. At this stage, the entrepreneur must be able to determine the critical success factors that enable other players in the same industry to succeed while, at the same time, be vigilant about those factors that cause other businesses to fail.
The question for the entrepreneur in Opportunity Seizing is “Will I be able to manage, to my advantage, the critical success factors and avoid the critical failure factors?”The critical factors may change depending on what market segment the enterprise is addressing. If the market segment wants very high-quality products and can tolerate higher prices, the critical success or failure factors here would be different from a market segment that is very price-conscious but is not too demanding on quality. Thus, it is important for the entrepreneur to establish the positioning of the business enterprise in the marketplace. What market segment would be best for the enterprise to enter into?
Crafting a Positioning Statement
In order to craft a positioning statement, the entrepreneur is advised to look at other competitors (or substitutes) in the marketplace. Details such as their major buyers, attributes or features that make the competitors’ products attractive should give the entrepreneur an idea. Customer profiling will come into the picture—their characteristics and traits, behavior and usage, pattern, preferences and dislikes.
Going through the process of questioning, the entrepreneur will be able to come up with each of the competing products’ Main Value Proposition (MVP) and from there, work on his own positioning. The following key points can help out the entrepreneur on how to go about this ‘questioning.’
- What are the main customer segments?
- What are the different product attributes and features of each of the competitors?
- What are the existing marketing practices of the various competitors?
- What are the market preferences of consumers when it comes to the products being offered?
Below are examples of the grids for competitor analysis that the entrepreneur can follow.
Grid 1 arranges the products according to their quality levels along the horizontal plane and according to their prices along the vertical plane. Grid 2 arranges the products according to their sales volume along the vertical plane and according to their main value propositions in the horizontal plane. A more complex analysis of the competitors’ products is presented in Table 1. which addresses key questions such as information on the customer segment being served, product attributes and features, marketing practices, market performance, strengths and weaknesses, as well as the main value proposition of these competitor products.
Grid 1: Quality versus Price Positioning of Competitors
Note: Letters represent competitors
Grid 2: Sales Volume versus Main Value Proposition
Note: Numbers represent competitors
Table 1. Analysis of Competitors’ Products[doc id=8029]
Conceptualizing the Product or Service Offering
After making an assessment of the competing products, the entrepreneur must then conceptualize his or her own products. A concept is an ‘idealized abstraction of the product or service to be offered to the preferred market of the entrepreneur.
Case Example: Cozy Condo Cocoon Product Concept
Here is an example of a product conceptualization. This is a furniture concept for the cozy condominium cocoon.
After noticing the trend toward condominiums, condotels, townhouses, apartment lofts, second homes, and vacation houses among the upper middle to the high-income segments, a furniture maker scanned the competitors’ product offerings.
Upon closer observation, there seemed to be more and more L-shaped sofas, sofa beds, pullout beds, adjustable dining tables, lighter chairs, stackable chairs, compact kitchen furniture and complete bathroom sets being offered in the market.
Since these dwelling places cost anywhere between four to twelve million pesos each, they cannot be “cheapened” by low-end furniture. Otherwise, the value of the place would get diminished. Also, since the units are relatively small, the owners can spend a little bit more per piece of furniture.
Given these motivations, the furniture has to be of the right size to fit the dimensions of the unit. To make the furniture flexible in size, function, and appearance, they can come in modular, rearrangeable designs. The furniture must be light and appear light for easier movement and to project a roomier image. The furniture has to be comfortable and appear warm to create that “cozy cocoon” feeling. If plastics or light metals are to be used, they must be ergonomically engineered and creatively styled so as not to be hard on the body and stiff to look at. Colors and curves can do the trick. The furniture has to be multifunctional, like an ottoman that serves as a “coffee table,” a kitchen counter that serves as a dining place, a sofa and a bed at the same time, and a working desk, entertainment cabinet, and bookshelf rolled into one.
To appeal to his chosen customer segment, the furniture maker decided to display the furniture in “matched showcases” where the buyer could easily “visualize” their final arrangement in his or her unit.
To make the display area more attractive to customers, the entrepreneur added lamps, lighting fixtures, home accessories and decorations, kitchen appliances for the kitchen display area, wallpaper and coverings, and flooring materials to complete the display ensembles.
The concept must be compelling and unique to the customers targeted, meaning that the product should contain the attributes or features desired by the targeted market that make up the product’s main value proposition.
In order to come up with the product or service concept, the following options or directions may be considered by the entrepreneur:
- The first is to create a concept similar to the winning products in the marketplace and ride with the obvious market trends. (Tip: Use the information gathered from Table 2.6. Analysis of Competitors’ Products.)
- The second is to find a market niche that has not been filled by the competitors. (Market niche means small segments of the market where discriminating customers are searching for special product/service features and attributes.)
- The third is to conceptualize a product in a positioning category where the participants are rather weak. (Tip: Again, use the information gathered from Table 1. Analysis of Competitors’ Products.)
- The fourth is to conceptualize a product that would change the way customers think, behave, and buy, thus making existing products “obsolete” and “old-fashioned.”
Designing, Prototyping, and Testing the Product
From conceptualization, the entrepreneur proceeds to the design, prototyping, and testing of the concept. Designing means that the entrepreneur must render the concept and translate it into its very physical and very real dimensions (measurement). This entails building a prototype of the product that will be ready for actual testing by the entrepreneur and then, later on, subject to testing by potential customers through focus group discussions (FGD), surveys, product demonstration sessions, and the like.
The entrepreneur must be able to ‘perfect’ the product or service as it goes through the above processes while the product or service is continuously subjected to testing and improvement.
The next thing the entrepreneur must do is to assess how much resources are available in order to seize the opportunity and what kind of organizational set-up will work best for this kind of opportunity.
Implementing, Organizing, and Financing
Good planning and good programming are essential to have good implementation. The entrepreneur must begin with the end in mind, or his or her desired end results, for the chosen opportunity. End results refer to the final outcomes of the business, such as highly satisfied customers, huge sales realized, large profits generated, etc.
A good planner and programmer must make several important choices to achieve the desired end results.
First is to choose the correct technology, the one that would produce the output that would meet the quality specifications of the customers.
Second is to choose the right people who can perform the technical and managerial functions necessary to realize the desired end results.
Third is to design the operating workflow that would assure the effective, economical, and efficient production of the output.
Fourth is to specify the systems and procedure§ that would govern the enterprise, motivate and discipline the work force, and satisfy the customers.
Fifth is to design the organizational architecture that would allow the people to function at their best.
Given the above considerations, the entrepreneur must be diligent in taking the necessary steps toward determining the required resources. These resources include people resources, physical resources, and peso or money resources,
People and physical resources are dictated by the sales volume targeted, the technology to be utilized, and the capabilities needed by the workforce. The sales volume would then determine the quantities of materials, supplies, power, space, people, operating expenses, and other requirements. Technology would define the Capital expenditures and work processes necessary to get things done. The capabilities of the people would calibrate the salaries and wages, benefits and allowances, travel and transportation, and other people-related expenses. The peso Or money resources would, in turn, depend on the people and the physical resources, plus other financial requirements related to establishing and nurturing a business.