BBVA API Market
How can an idea sketched on a piece of paper be successful when there are many similar ideas in the market? Surely this question has caused a headache to more than one person. But it’s normal; it doesn’t matter if you are an entrepreneur, a startup, an SME or a large company… there are hundreds of businesses that sell the same product or service and they are all profitable. So, how is that possible? What is the key to success?
The first thing you must have clear is that you must be passionate about the idea you’re going to turn into a business, because what really differentiates an idea from the rest is its execution, that is, they way implement it. And this is something that requires a great deal of commitment, perseverance, dedication and confidence in yourself. Therefore, if you are not passionate about the idea you want to transform into a business… think about something else.
The second step is to assume that, whatever you do, you will always have competitors. For this reason, instead of being concerned about your competition you should think of it as an incentive to embrace innovation and do things differently.
The key elements of a competitive strategy
We know that doing things differently is not easy, but not impossible. There are many tips on how to create a competitive and effective business strategy, but we are going to focus on what we consider essential for an entrepreneur or brand new startup.
1. Analysis of the competition
In the first place, and although it might sound cumbersome, it is imperative that you do a market study not only about the possible field of action of your business, but also a thorough analysis of the competition, which is one of the most important points in the planning of products or services. This analysis should describe the market conditions in which you want to operate, from the strengths and weaknesses of competitors to their tactics and goals. Therefore, you should identify all your potential competitors, their size and the type of market they are targeting, and also how they are competing, so you know what you can do about it and discover or enhance a competitive advantage for your business.
2. Customer segmentation
Once the analysis of the competition is done, it is very important to understand the kind of specific customers you are going to address with your products or services. Few companies are able to meet the needs of everyone, and for this reason most of them must differentiate demand segments and choose those it has capacity to serve. To do this, you must perform a market segmentation, which consists of dividing a market into smaller groups of individuals with similar characteristics and needs in order to serve them in a specific and differentiated way. This point is crucial, because if you don’t segment your customers, your business will not have the expected success. The process of understanding and segmenting your target audience is a key element for the efficient development of your company, as it allows you to place your products or services in that niche market where they can be more profitable and efficient.
3. Added value
Once you know perfectly your market and the competitors operating in it, it is very important to carry out strategies that add value to the products or services you will be offering. This will also allow you to be, at least, one step ahead of the competition.
To distinguish a product or service similar to the competition’s offering it is necessary that such product or service has a differential advantage able to justify the act of buying it and make a difference. Hence, after performing the customers’ segmentation it is key to understand those consumers and their purchasing decisions much better than your competitors.
4. A different format and presentation of the product
Finally, you should not neglect the way you present your product or service, as it is also essential when it comes to providing security and confidence to your clients. It is also a sign of distinction that will differentiate you from the rest.
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