MOVING ON 105
Moreover, make sure that you think cross-industry. An unusually large warehouse might
be converted into a retail outlet for any business, an entertainment complex, a housing
development, etc. Equipment that you acquired for making one item might be applied in
a totally different industry. And beware that competition against you might emerge from
exactly the same lateral thinking.
Once you have identified your competitive advantages, you have just about everything
you need to develop a competitive strategy.
Now write about it
By now, you should have a fairly thorough view of the external environment in which you
operate. If you have created a suitable framework for analysis, you will have brought order
to chaos and you will find it easy to document.
Two pages in your business plan usually cover it sufficiently. At the end of Chapter
4, you wrote about your product. You can follow this logically by describing first your
market, then your competition. At this stage, the description will be fairly historical and
factual. Later, when you have developed a competitive strategy, you will add to these
descriptions – and maybe amend them – to take account of your plans for the future.
Figure 5.4 shows a sample extract from a business plan. As you can see, writing this sec-
tion is straightforward enough once you have completed your analysis.
Moving on
I might have misled you when I said that you had only a little research to do when work-
ing through this chapter. I didn’t want to scare you. However, if you have made it to here
without suffering nervous exhaustion you have done very well. You will probably agree
that the research was not really too hard. The results are, or will be, well worthwhile. If you
got this bit right, it is a downhill ride to business success. Now you can have the fun of
converting the effort to date into a strategy. The rewards are very satisfying.
106 CHAPTER 5 KNOW THE WORLD
Figure 5.4 Market and competitive analysis in the business plan
TETRYLUS BUSINESS PLAN Doc 20110136 Competitor Analysis
Market and Competitive Analysis
Product classification
The product class is industrial health and safety monitoring and com-
pliance equipment (HSMCE). There are two product categories: non-
automated and computerised. Tetrylus is in the latter category.
Market segments
The market divides into six segments. There are three industry
types (construction, mining and petroleum) each divided into large
and small companies (the boundary being 2,000 manual workers
and above). Tetrylus is targeting primarily large petroleum compa-
nies. The other large companies are secondary targets for us, but
are not ruled out (see The economy). Small companies are currently
not viable prospects on cost grounds.
Territory
Tetrylus is operating in Asia-Pacific. Mining and petroleum compa-
nies have fairly homogeneous buying characteristics throughout
the region, but the construction industry is more fragmented. Hong
Kong and China …
Competitors
Four major international competitors are operating within our terri-
tory. Together they dominated 94% of the market last year, as Table
7 indicates:
Table 7. Asia-Pacific HSMCE sales by competitor
Company Sales, $m Market share, %
Pacific Link 166 46
Atlantic Watch 87 24
Indian Continental 74 20
Arctic Assets 13 4
Other 21 5
SafeTRAK 1 1
Total 362 100
However, when taken by market segment the picture is rather differ-
ent. HSMCE sales by competitor, market segment, and territory are
shown in Table 8 …
Tetrylus seems to have
done its homework. This
exposition is tackling
a complex market and
apparently explaining
the analysis simply and
factually.
However, it looks wor-
rying that Tetrylus is
dependent on three
highly cyclical industries
– although they do not
necessarily move in step.
A ‘heavy acronym’ for an
unfamiliar reader.
A table like this is very
useful – but it does high-
light that Tetrylus
is battling three very
large players. I’d want
to see which companies
were in ‘other’ or maybe
even not active in Asia
at this moment (the
unseen competitors).
I hope that Tetrylus is
leading to a conclu-
sion that supports its
expectation of being able
to compete.
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