Business Plan Preparation Frank Moyes Leeds School of Business

Business Plan Preparation Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado Competitive Advantage 1

Identify Your Resources Human: social, employee knowledge, experience, accumulated wisdom, labor cost and skills, etc. Intangible: patents, trade secrets, know-how, copyrights, databases, etc. Organizational: culture, contacts, policies, Boards of Directors & Advisors, suppliers, service providers, etc. Financial: access to capital (equity & debt), cash reserves, government grants, etc. Physical assets: plant & equipment, raw materials, location, working capital, etc. Competitive Advantage 2

Identify Your Capabilities Network - well developed, high-quality, accessible contacts that take years to build Marketing - differentiation, branding, positioning Product/service - design features & benefits Sales & distribution - rep organization Total operational approach - Dell, Wal-Mart Supply chain management - Asia contacts Relationships - regulators, politicians, investors Competitive Advantage 3

Barriers You Can Establish Intellectual property Switching costs to your target customer Customer loyalty Agreements with customers, suppliers, strategic partners Control of the distribution channel Competitive Advantage 4

Competitive Advantage Challenges Intellectual property Agreements with customers or suppliers Long term contracts Control of costs Control of prices Control of channel Location Differentiation Competitive Advantage First to market Intellectual property World class management Development lead time Brand Quality Service Execution Relationships 5

Sustainable Competitive Advantage Differentiation Innovation Resources & capabilities Really understand the market & competition Competitive Advantage 6

Competitive Advantages Difficult to Sustain Most are easily copied Must be intellectually honest Entrepreneur not realistic about own resources & capabilities Entrepreneur ignorant of or ignores competition Entrepreneur ignores future Market, competition, resources, and capabilities are continually changing Competitive Advantage 7

A Model of Competitive Advantage Resources Distinctive Competencies Cost Advantage or Differentiation Value Creation Capabilities Competitive Advantage 8