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Ivy Method

Entering a new market


Competition

Start from scratch If favorable, how to enter? Acquire existing player Joint venture with existing player

Market share Market favorable for entry? Comparative products and services Barriers to entry

Industry Analysis
Growth

How many?
Life cycle? Transition

Performance, margins

Maturity

Suppliers

Product availability Whats going on in their market?

Major players
Competition Market share Current industry structure New players Industry changes New technology

Expanding or shrinking? Future Mergers and acquisitions Barriers to entry or exit?

Brand

Drivers

Technology

Size

Mergers and Acquisitions


Increase market share
Diversify holdings Pre-empt the competition Objectives Tax advantages

What shape is the company in?

The industry? How secure are its markets and customers? Due Dilligence What are the margins? Competitive response to acquisition Legal issues

Incorporate synergies Increase shareholder value Fair? Affordable?

Price

How to pay?

How long to keep it? Exit strategies Divest parts of the organization?

If the company sours?

New Product
Special or proprietary?
Expanding customer base Prompting competitive response Market Strategy Barriers to entry

Financing?

Patented?
Major players and market share

Substitutions?
Who?

Product Advantages and disadvantages Place in product line Cannibalizing our own products Replacing existing product
Customers

How to reach them?


Retention - how to hold them?

How funded?

Financing

Best allocation of funds?

Debt viable?

Pricing Strategies
Value based pricing

Pricing
KEEP IN MIND 1. Price discrimination (1st/2nd/3rd degree) 2. Bundling 3. Competitors reactions 4. Behavioral Economics Anchoring, Prospect theory

Competitive pricing
Cost-based pricing Price-based costing

Growth Strategies
Is the industry growing?
How are we growing compared to the industry? Prices relative to competitors Assessment Competitors marketing and development Which segments have the most potential? Funding for higher growth

Increase distribution channels Increase product line Strategies Invest in major marketing campaign Diversity of products or services offerd

New Business
Management
Marketing and strategic plan Distribution channels Product
Barriers to entry

Who is the competition and their market share? Products comparison

Market

Cost Benefit Analysis

Customers

Finance

Competitive Response
Acquire a competitor

New Product?

Merge with competitor

Why?

Competitor's strategy changed? Other competitor's increased market share

Strategy

Copy competitor Hire the competitor's management Increase profile with marketing campaign

Increasing Sales
Growth relative to market share

Increase volume
Changes in market share

Assessment (increasing sales doesn't necessarily mean increasing profits)

Increase amount of each sale


Customer polls

How? Increase prices

Prices competitive?

Competitor's strategies (marketing and product development)

Create seasonal balance

Reducing Costs

Get cost breakdown Investigate for irregularities Benchmark competitors Labor-saving technologies
Cost analysis Internal

Union wages, suppliers, materials, economies of scale, increased support system Economy, interest rates, government regulations, transportation/shipping strikes

Assessment

Cost analysis - External

Increasing Profits
Indentify revenue streams

ID fixed costs

Revenue ;
E (P=R-C) M ; Always look at external factors first

Percentage of total revenue of each

ID variable costs
Unusual balance?

Have percentages changed? Expand into new areas Increase sales (volume and force) Volume Increase marketing

Shifts in costs Costs Unusual costs?

Benchmark competitors Reduce costs without damaging revenue streams

Reduce prices

Improve customer service

Turnaround
Learn about company Review services, products, finances Strategy Secure funding
Strategy (con.) Reassure clients, suppliers, distributors Prioritize goals and develop some small successes for momentum Determine short term/long term goals

Business plan

Review talent and culture

Factors to analyze competitors: - Market share - Relative strengths in Product categories, price, features, quality - Substitutability
Useful generic framework for yes/no cases Ex. Should Trevor Toys spend more on Low-tech toys?
PROs Customer Company Resources Competition Product etc CONs

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