Competitor Analysis [1] · Scope Creep Mitigation 255 •Ensure all stakeholder requirements are documented properly. If there are clashing requirements, mitigate accordingly. Document
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• Michael Porter’s competitor analysis framework is very useful where it is based on four key aspects: o Competitor’s objectives
o Competitor’s assumptions
o Competitor’s strategy
o Competitor’s capabilities
• Objectives and assumptions are referring to what drive the competitor, while strategy and capabilities refers to what are the competitor is doing or is capable of doing.
• Further, the competitor analysis should include existing key competitors as well as potential competitors in order to develop a strategic plan.
• The two most important key factors about a competitor’s strategy is about what the competitor says and what they do.
• All these information can be found in: o Annual shareholder report, interviews, press releases and etc.
• However, all the stated information might be different from what the competitor is doing. Thus, it is important to investigate competitor’s cash flow direction. o Hiring activity, R&D projects, capital investments, promotional
• The assumptions that a competitor made reflects the moves that they will consider.
o E.g. If the competitor had introduced a product in the past and the product failed, the executives may assumed that there is no market for the product.
• However, based on the situation, such assumptions might not be accurate and it might reflects opportunities.
• Thus, new entrants can may have the opportunity to introduce a similar product to the market and the existing company will not take the threat seriously as they had failed previously.
o E.g. Honda was able to enter US motorcycle market with small motorbike due to US manufacturer assumed that there was no market for small bikes based on their past experience.
• After knowing competitor’s assumptions, objectives and current strategy, it is very important to understand how the competitor might respond to a competitive attack. o However, all the decisions made are linked directly to the resources and
capabilities the competitor has and its ability to respond to the attack effectively.
• Competitor’s capabilities can be analyzed by using SWOT analysis where competitor’s strength reflects its capabilities.
• Financial analysis can be done as well to reveal competitor’s sustainable growth rate.
• Other factors such as cash reserves, investments, fixed assets and etc. must be taken into account as all these reflects the competitor’s ability to react in the competitive environment that is dynamic
• Summarizing all the information such as competitor’s objectives, assumptions, strategy and capabilities can be compiled into a response profile of possible decisions that might be made by the competitor.
• The profile will includes both potential offensive and defensive moves which can ease the business in their strategic planning to create competitive advantage.
• Further, specific moves and expected strengths can as well be predicted using the response profile.
• A process whereby an individual identifies all main issues such as specific research goals, deliverables, tasks, costs and deadlines, that have the potential to cause problems during the implementation stages.
• It is a continuous process; effective scoping will prevent too much diversion from the main goals set out prior to implementation (research creep).
• Scope creep a.k.a. focus creep/ feature creep/ function creep/ requirement creep, occurs when the scope of a project is not properly documented, defined, or controlled
• Inclusion and introduction of more requirements that weren’t part of the initial scope will cause a project to divert from its schedule and budget.
•Ensure all stakeholder requirements are documented properly. If there are clashing requirements, mitigate accordingly.
Document the Requirements
• If there are changes to be made to the original project scope, ensure that any and all changes are done in a systematic manner
Set Up Change Control Process
•The schedule will show all requirements and how they are to be achieved i.e. via tasks. Indispensable for determining project progress according to requirements.
Create a Clear Project Schedule
•Show the stakeholders the project scope and schedule and explain everything to them in detail. This ensures there is no unnecessary confusion, and that the stakeholders understand the limitations of the project.
Verify the Scope with Stakeholders
•Regular communication will prevent unapproved changes, proper documentation, and identification and mitigation of any problems that might arise during the implementation stage of the project.
When to launch – is the current market conducive? Are there any improvements to be made to the product? Will the product interfere with the company’s existing products?
How to launch – how much allocations have been made for marketing and promotions? Is it feasible to use several mediums for launching?
Where to launch – single/ multiple locations, single/ multiple regions? Does available resources allow for multi-area launching?
Whom to target – who is the main intended demographic of the product? Has a primary consumer group been identified? Is there leeway to allow product adoption by other non-target consumer groups?
• Properly structured company or business is crucial
• Top level management such as board of directors and employees are very well focused and must share a common vision, mission and strategic goal.
• An updated strategic business plan with 3-5 upcoming years have to be open to all employees for their better understanding. o The business plan has to cover new and existing products/ services.
• There must be a good corporate culture of caring, sharing and excellent communication in place.
• All employees are encourage to provide innovative ideas and good ideas that move forwards will be given rewards. o Employees are encourage to work together and observe the
customers.
If all the 5 listed best practice are in place, the business is said to be meeting the definitions of commercialization and is ready to move forward to take up the challenge of commercializing new products.
• Developing the “right” corporate culture is very important for a leader as it emphasized that without management commitment, improvement efforts fail.
• This is to develop leadership that is open-minded, supportive and professional.
• Commercialization involves different people and departments with different perspectives about how things are to be done.
• Thus, conflict might occur and top management plays an important role in dissolving all the conflicts.
• Top management should generate enthusiasm, provides clear vision, assures sufficient allocation of resources and etc.
• It is critical to have a well balanced team to plan and implement the commercialization of a product.
• The team must consist of people that had experience to understand the needs of the commercial markets and how to serve them.
• Research shown that failures that happened were due to lack of a full analysis of commercial market needs and the development of an effective market penetration strategy.
• Thus, if the company does not have in-house team who have commercial experience, talents can be found by hiring consultants or strategic partners.
• One of the most effective strategy will be developing a clear understanding of customers’ buying behaviours.
• Conjoint analysis will be best in understanding customer behaviours as it enables companies to forecast price elasticity of demand and sales potential.
• It is important to consider the fact that most of the time, customers may not know their true preference. o E.g. Customers may think that they are brand loyal, but in reality, they are
more sensitive to price or a specific feature.
• Thus, by conducting conjoint analysis, companies will gain all the market information they need. o E.g. What pricing strategy should be use.
• A company’s orientation towards customers or competitors is likely to influence how they respond to changes in the highly competitive marketplace.
• If a company is market orientated, decisions made will be based on customers’ needs and wants, rather than what the company thinks that it is right for the customer.
• Thus, most of the successful businesses take a market oriented approach.
• In addition, great potential benefits can be achieved by the company if customers and suppliers are involved in the commercialization process as early as possible.
• The current high competitive market environment rewards businesses that are able to develop and commercialize products quickly and on-time.
• This is due to companies who rapidly develop new products enjoy substantial competitive advantage.
• Speedy, reliable new product development and commercialization will help companies to gain higher returns in the marketplace.
• Early product introduction can improves profitability by extending product’s sales life, charging premium price as well as achieving economies of scales.
• Knowledge management is very important to a company as knowledge that has been created can be transferred from one to another within the company.
• Thus, maintaining good management will lead to a positive effect on commercialization process.
• Further, integrating internal and external knowledge (knowledge integration) would reduce market uncertainty and obtain comparatively high success opportunities.
• Companies with good knowledge management method will be successful in commercialization.
• In developing new products the word commercialization gets thrown a lot but what actually are the key drivers/component of commercialization.
• To break it down in a simple manner there are two components to making it work. There is the supply and demand side of it. If one were to use and analogy it to answer the above question it would be the key and lock.
• The appropriate key is needed to unlock the market potential in order to obtain success.
• Product differentiation is what makes the product different when compared to all other products in the similar class segment. It is done in order to make the product more attractive and appealing to consumers.
• There are 3 types of product differentiation:
SIMPLE
• based on a variety of characteristics
HORIZONTAL
• based on a single characteristic but consumers are not clear on quality
VERTICAL
• based on a single characteristic and consumers are clear on its quality
• The SCM system is a management flow of goods that start from the point of origin up to the point of consumption.
• How this affect the commercialization is through the level of infrastructure needed in order to get the production process up and running.
• Questions such as Is there sufficient infrastructure in place to ensure the success of the product?
• The SCM normally draws from areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach
• The production is a another key element in affecting the commercialization drive.
• Critical success factors such as skill set, raw materials, labour and cost of production are contributing factors that is needed for the purpose of production.
• However today these factors have become less focused upon due to the ease of outsourcing production floor to countries such as China, Philippine and Indonesia.
• The proliferation of internet has provided information at the tips of our fingertips making the process of obtaining information much more easier.
• It can be said that the more easier it is to create production facility will undeniably make it easier for commercialization to happen.
• The market conditions is capable in influencing commercialization activities.
• Its evident during economic downturn commercialization activities reduces as investors are reluctant to spend resources investing when the risk factor is much higher of possible product failure.
• The situation is vice versa when the market conditions are performing well the ease of capital expenditure occurring is higher as the markets condition is favourable with everyone doing the exact opposite of hording resources.
• This however is not a certainty but a mere general outlook that give the feel product performance.
• The most important factor that need to be consider is that the end stage consumer. Does the product meet their needs or does the product possess unique traits that will be desired by the consumers.
• At the end of the day if there isn't any need or want from the consumers then regardless of how well the product is it will fail to be successful.
Lack of time & difficulties regarding financing Economic risks Lack of personal interest in commercialization Friction with the local university administration Difficulties related to ownership rights Lack of services related to the commercialization of research Lack of support from the work environment
• This issue is not very alarming but they are nevertheless non‐negligible.
• Researchers who have explicitly decided not to commercialize a particular invention assess the lack of support from the environment to have influenced the decision to “some extent”.
• Not enough knowledge in utilizing the research. • No clear Goals and Strategy • Unclear Policies • Funding mechanism • Lack of human resources • Industry's lack of interest in the results of public research • Researchers’ lack of interest in business • Researchers’ denial of support for TLOs • Financial problems • Lack of dynamism in the surrounding society • Incubation challenge • Organizational boundaries and location • Overvalue technology
– Development takes many folds cost of research – Marketing requires many folds of cost of development – Market changes – Price or cost of the research does not create value – Value is only what others are willing to pay