This is the third post of eight in the History's Greatest Strategists Reminder Series, Assembling Your Ultimate Business Advisory Board, by Ashton Bishop, Head of Strategy at Step Change Marketing.
In the last post we looked at the health of your category. Today, we're looking at the competitive environment.
Check out the full presentation below.
The following text is the video transcript.
Having a broader view of your competitive environment can throw out different challenges but on the other side of every challenge, is an opportunity. If we can have a broader view, we can test tactical campaigns, we can see if we can grow a business, take tactical initiatives and also it really helps us get a sense of whether we should be attacking new categories or defending our core, which is one of the challenges we always need to be aware of when planning our resources in business.
Most competitive environment assessments only ever look at direct competitors - the same noun, the same verb - people who we consider in our competitive set. We can also look at alternative competitors who have the same noun but a different verb, or substitute a different noun for the same verb.
Then we need to be aware of our economic competitors who have a different noun and a different verb but still, we're competing against them to make sure the customer's dollars come to us.
Let me give you an example of those four that might make a little bit more sense.
Here's one that we just made up for Gloria Jean's Coffees. So let's look at direct competitors. That's easy to do. When we look at espresso coffee, we go Starbucks, McCafe, Coffee Club, Michel's Patisserie and our local cafè.
These are the direct competitors we're all easily familiar with. If we look at alternatives, we go same noun, different verb. So instead of espresso coffee, this is still a coffee, but it's a quick coffee. This is instant coffee and filter coffee. In here, the rise of the Nespresso machine is a real competitor that needs to be in Gloria Jeans' strategic radar.
On the image above, over to the right, we see substitute products. These are different noun, same verb. One of the aspects or verbs of the coffee is the caffeine hit. We can get this in a caffeinated soft drink, tea and certainly those easy way bubble drinks which are very big with the Uni students, are very popular for a caffeine hit.
And then there's the economic competitor. So if I wasn't going to spend my money on coffee, I might spend it on a snack or soft drink, better lunch, to buy petrol or cigarettes. Some other low cost, easy impulse purchase.
In mapping out our competitive environment as you see, you then open up challenges of people which are potentially coming, and also opportunities to have campaigns take tactics that get the dollars that were going to those other alternatives, to come to us.
So, that's the competitive environment overview, a different way to look at it.