2015-02-13

Market Analysis
Market Analysis
and Business Plan and
Business Plan
SVEN OLSSON, LU INNOVATION

The Market Analysis is a part of the Business Plan

That is where it all begins…

© LU Innovation 2015, SOL

Business Plan Why do we need a business plan?

Business
Idea »  Describe goals internally, externally
Financing
»  Answer all kinds of questions

Organization »  Different target audience

Market Business Market
analysis concept plan »  Dynamic document

»  Helps in the decision-making process

Production
Writing a business plan, makes you think through
Economy
the business idea thoroughly.

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

Target groups The decision process

»  Investors » First an emotional decision…
Note! Usually
»  Customers different versions » …then ”Cognitive motivation”
»  Suppliers »  Nano robots that clean blood vessels

»  Car tires that never wear out

»  Potential board members, key persons
»  Powder that eliminates contaminations and salt from
water
»  Control document for management, staff
»  Activated nano particles that eliminates virus
»  Bank, Auditor, Partners, Distributor »  Bacteria that produce snow

» The Elevator Pitch

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

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The elevator pitch Communicating what ?

»  Limited amount of time »  Business ideas

»  Seize the opportunity when it comes –  Customers

»  Create interest –  Investors

»  Communicate the essentials »  Applying for funds

»  Give an easy-to-remember summary »  Making a scientific speech

»  Applying for a job

»  …

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

The Elevator Pitch The Elevator Pitch

The Core - your Value Proposition
Hook Hook

Core The Elevator Pitch – three parts

The Hook - Create interest:
Core
NABC
Close Ex. Close The Close - What is the request ?
“Are you having trouble hearing? You are not alone.”
A new meeting?
Funding?
“More than two thousand ideas have been patented for
Additional partners?
new mousetraps and only two are really used.”
A reference to another person?
…?
Tell a story
© LU Innovation 2015, SOL © LU Innovation 2015, SOL

NABC NABC
»  Important Need »  Benefit per cost
–  What is the user benefit ?
–  What problem do we solve ?
–  What is the superior customer value ?
–  Define the playing ground, state of the art
–  How does it compare to the cost ?
–  Provide facts, scientific background »  Competition and alternatives
»  Our unique Approach –  Who are the competitors ?

–  How do we solve the problem ? –  What alternatives are available ?

–  Now ? In the future?
–  What is our approach for addressing the need

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

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Pitfalls The Business Model Canvas (the BMC)

»  Do not concentrate on the approach

–  nAbc

–  NabC

»  Do not just say “faster”, “cheaper”, “better”

–  Be specific and quantitative

–  If you don’t know, guess - take a “SWAG”

»  Do not forget the Close

–  What do you want to achieve ? Next step ?

»  Iterate, iterate, iterate … N: What the world needs is a little red wagon
A: Our approach is to build a little red wagon
B: The benefits are that we will have a little red wagon
C: There is no competition, since our wagon is a nice
shade of red.
© LU Innovation 2015, SOL

The Business Model Canvas (the BMC) The Business Model Canvas (the BMC)

Market Analysis
Part 1 A.  The Market
MARKET ANALYSIS
B.  The Customers

C.  The Competitors

D.  The Market strategies

© LU Innovation 2015, SOL

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A. The Market A1 Market – The Present situation

»  Description
1.  The Present situation –  Consumer clients/ Business clients

2.  The Future »  B2A, B2B, B2C, B2D, B2G

–  Conservative/Dynamic
3.  Trends
–  Size, potential growth

–  Segments, Target groups, Localization

–  Delimitation of the market

–  Other properties

»  The positioning
–  Present situation

–  Target positioning
© LU Innovation 2015, SOL © LU Innovation 2015, SOL

A2 Market – The Future A3 Market – trends

»  Maturity »  Fashion trends

»  Market share, forecasts »  Seasonal dependence

»  Threats? »  Market dependence

–  How to overcome? –  Boom, recession, ...

»  Specific opportunities, potentials »  Other visible trends

»  Factors that influences the development –  Advantages

–  Disadvantages

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

B Customers B1 Customers, general

1.  Customers, general –  Where are the customers?
–  How many?
2.  Most important customer(s)
–  How dependent is the company of (a) certain
3.  Customer benefit customer(s)?
–  Customer’s decision process
–  Capability to pay
–  Price sensitivity, purchase amount
–  How to tie the customer to the company?
» Contract, subscription, updates

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

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B2 Most important customer(s) B3 Customer benefit

»  Which customers are the most important? »  What need do we satisfy? (“Important problem”)

»  Few customers, how to handle the risk? »  How are we better than the competitors?

»  How is the customer dependent on the Company? »  How do we get feedback from the customers?

»  Describe the sales process »  What alternatives does the customer have?

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

C The Competitors C1 Who are the competitors?

1.  Who are the competitors? 1.  Who are the main competitors?

2.  Competing products, offers –  Owners

3.  Rights, patents, licenses –  Turnover, Sales volume, profitability, debts

4.  Reactions from the competitors when the product –  Weaknesses, previous mistakes
is launched
–  Distribution channels

–  Price, offer, service

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

C2 Competing products C3 Rights, patents, licenses

»  Offer
»  Trademarks
»  Product function
»  Reliability, durability
»  Registered design No patent is
»  Environmental impact, sustainability »  Copyright
stronger than the
one who defends it
»  Design »  Patent
»  Delivery reliability
»  Licenses
»  Service
»  Goodwill
»  Price
»  Financing (leasing, interest free purchase) »  Reputation

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

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C4 Reactions at product launch D The Market strategies

»  Prepare for counter action 1. Business model
»  Price reduction
2. Pricing
»  Suppliers
3. Sales
»  (Counter-)Market campaigns
4. Distribution
5. Service
6. Marketing
© LU Innovation 2015, SOL © LU Innovation 2015, SOL

D1 Business model, examples D2 Pricing

»  Printers, color cartridges »  Market price

»  Elevators »  Penetration pricing

– (Low price for vast spreading)
»  Cellular phones
– Example: Media Markt?
»  TetraPak
»  Skimming pricing
»  ECOS, heater process control – (High price at start for high gros margin)
»  Leasing – Example: Apple, Cars, Hi-Tech

»  Christer Ericsson fixation belt »  Difficult to increase price significantly

»  24kr*135%=32,40 cp. 175kr -> 167,25 – (Easy to decrease discount)
© LU Innovation 2015, SOL © LU Innovation 2015, SOL

D3 Sales D4 Distribution
» Build global sales organization (expensive)
»  Retailer
» Whole sale dealer, Agents, Retailers
»  Agents
» Web shop, Mail-order
»  Franchising
» Segmentation
»  Whole sale dealer
–  Geographic division
–  Customer type »  Shops (owned by the company)

–  Submarket »  Employed salespersons

» Exclusive contract »  Web shop, mail order

–  combine with minimum quantities »  Call center
© LU Innovation 2015, SOL

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Margins, retailer Margins, whole sale

Medicine 33% Medicine 9%
Textile fabrics 50% Groceries and 5%
Sports equipment 30-40% beverages
New cars 10-16%
Cellular phones 10-20% (previously
50%)

Supermarket 25-30%
(groceries)

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

Margins, manufacturer D5 Service

Medicine 58% »  Service level important for re-purchase frequency

Computers (PC) 10-15% »  Who makes the service

Apple (previously) 50% – Supplier
Computers (servers) 20-25% – Retailer

– The Company
Source: Affärsplanering -en handbok för nya tillväxtföretag, McKinsey&Company, Ekerlids förlag,
2005
»  Quality of service

»  Post market

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

D6 Marketing
»  Conventional Advertisement Part 2
THE BUSINESS PLAN
– Papers, periodical, radio, TV, The Internet

»  Direct marketing

– Direct mail, telephone sales, The Internet

»  Media

– Editorial articles, press releases, directed

information

»  Exhibitions and fares

»  Customer visits © LU Innovation 2015, SOL

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The Business Plan Shaping

»  Max 25 pages (VentureCup: Max 15)
Shaping »  Keep a simple language

»  Focus on essentials
Disposition –  What do you want to communicate?

»  Facts, state the references

Contents »  Always stick to the truth

»  Be ”down-to-earth” and tangible

»  Practice the presentation

»  Let ”external” people read and give feedback

© LU Innovation 2015, SOL

The business shall attract investors Disposition

» Truthful
Summary 6.  Owners
» Vigorous 1.  Business Concept 7.  Production
» Comprehensible 2.  Management 8.  Economic
overview
» Tangible 3.  Products
9.  Realization
4.  Market Plan
» Fact supported Supplements
5.  Organization
» Well edited

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

Disposition Focus
Vision 7.  Key Resources
1.  Business Idea »  Idea, Appetizer, the Elevator pitch
8.  Key Partners
2.  Background 9.  Cost Structure »  Customer benefit
3.  Business model 10.  Competitors »  Management
Extended BMC 11.  Trends
»  Exit
4.  Value proposition 12.  Team & org
5.  Customer Segment 13.  Implementation
Distr./Relation/Revenue 14.  Profitability & Finance

6.  Key Activities 15.  Risk analysis

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

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Supplements Literature
»  Så skriver du en vinnande affärsplan
1. Income statement
– en praktisk handledning
2. Balance sheet »  How to succeed in Sales and Marketing

3. Liquidity Plan – Advice for start-up companies

– www.connectsverige.se
4. Finance
»  Affärsplanering
5. Technical descriptions – En handbok för nya tillväxtföretag
– McKinsey&Company, Ekerlids förlag

© LU Innovation 2015, SOL © LU Innovation 2015, SOL

BMC Venture Cup

Business Model Affärsplan FTW
Generation: A
handbook for Jesper Forslund
Visionaries, Game
Changers, and Lean Publishing 2014
Challengers.

Alexander Osterwalder
and Yves Pigneur,

John Wiley & Sons

English version That´s it!

»  How to write a…

Available at

www.connectsverige.se

© LU Innovation 2015, SOL more questions ...?