One thing that I always try to push myself towards is trying new things and having new experiences. The problem is that I’m also super competitive (I can totally beat anyone at steak). This usually means that when I try something, I usually go all in – which means investing a significant amount of time, energy, and mental fortitude. Because of this, I have to weigh-in whether or not this new experience is going to be worthwhile for me.
- Threat of New Competition - How easy it for your competition to copy you? If there are barriers (i.e. costs, regulations, etc), then you are fairly protected in your decision.
- Threat of Substitutes - How easy is it for your customers to switch? In the case of a new product, this could involve the initial investment - for example, it is pretty easy to switch coffee brands but quite difficult to switch cars. In the case of marketing, this could involve where else customers see your message.
- Rivalry - How many companies are you going head to head against? The more you're going against, the more you're advertising is going to have to stand out and the more effort you're going to have to put into customer acquisition and retention. (By the way, have I mentioned how Cidewalk can help you stand out against your competition and grow your business?)
- Customer Power - Can your customers directly affect price? If you're in an arena with a limited number of customers and similar products as your competition, you likely have to compete on price to make your business look the most attractive.
- Supplier Power - On the other end, can your suppliers directly affect price? If you have to purchase from one (or a limited number) of suppliers, then they have the power to increase price. In terms of local marketing, this is why print and radio ads are usually so expensive - there are limited options to reach your targeted geographic area.