[MUSIC] Hello, by now we have learned what makes a business idea really great and how to design a proper business model to implement it. In this part of the course, we're going to talk about a most subtle tuning of your value proposition. Unlike the two previous modules, in this one you will have less theory and more practical guidance to specific actions and methods. The first key idea I'd like to start with is competitive capacity. It is how strong a company is within a competitive environment. In other words, it is the capacity of a company to achieve its goals and objectives, not withstanding all the threats and initiatives that are produced by the competitors. Suppose you have a very attractive offer, then ask yourself, is it competitive? How big is its competitive capacity? In order to answer those questions, you may use quite a simple, though efficient method. First, ask yourself, what are you good at? What are the strong sides of your offer? What makes you proud of your business idea? What is so good and efficient in your business model? Make a list of no less than 20 lines. If you do not see at least 20 positive sides of your business, you'd better not to run it. You may ask your friends and colleagues to help you. Just focus and think. Be positive. Then delete from the list everything that is not appealing to your clients. Very often, clients appear to be truly indifferent to what we believe to be our strong sides. Get rid of your delusions. Ask your clients instead. Repeat this procedure for each separate client group. And the third step, compare your offer with those of the competitors. Are you sure you're unique and unrivaled? Are there any competitors that are offering the same or even better advantages? Choose the options where you can be recognizably better than the majority of your rivals. Finally, if you still have any options at this stage, ask yourself if you're able to sustain them on the regular basis. The advantages that have no firm ground in your processes and competencies very often turn out to be not reliable at all. They can either be easily copied or failed. If, after all, you have at least one option, my congratulations. You have a sustainable competitive advantage, and this is good basis to build and develop your business. The battleground for competition is in clients' minds. The value proposition is like rifles and cannons, it is your main weapon. We deliver messages about how our value proposition through commercial offers. They have a greater chance to succeed if there are some true competitor advantages. But there is something more than that, wars are not just the battles of armies but also the competition of industrial and logistics infrastructure. Business is just the same. It is not an attractive offer or competitive advantage that leads a company to victory, but also its ability to operate, communicate and produce. I'm talking about the key success factors, the peculiarities of organization and management system. It is the set of key success factors that provides true competitive capacity. The strongest company survives, wins and prospers. Competitive capacity needs to be tuned. That means you have to adjust your business model and organization to the specifics of competitive environment and to the demands of your clients. Tuning competitive capacity starts with the understanding of your competitors, their activities, offers, strong and weak sides. Compare them to your company, try to understand where you are weak or insufficient, that is dark blue zone. You definitely fail there. Then enlist options where you are the same good or are able to become the same good in a short period of time, the light blue zone. You can hold your positions there or keep pace with your rivals. Finally, think where you can be better, recognizably better or even unique. The white zone is where you possibly have advantages. Then add clients to the picture. Find out where your advantages are truly appealing to clients. This pink zone is the basis for your competitive capacity. There are six simple but very useful questions that may help you to formulate the sustainable competitive advantages. Here they are. Number one, what is being sold and bought? Understand current market and the rules of the game. Pay special attention to the current market leaders, companies, and offers. Think why they're leading. Are you able to represent this? Are you able to manage this race? If not, what are the other groups? Which one do you fit most? Number two, how do they sustain this? Think of the success factors of the most prominent players of the group you analyze. What organizational factors are the key to the success in the market? Number three, what about your company? Are you able to be the same good, or vice versa? You hopelessly lag behind. Number four, where you can be better? Think of your possible success factors. What can you do better? Where you can have a more solid ground. That is what will drive your success. If you have nothing at this point, don't give way to despair. Think of your possible partner's competencies, resources, or know hows that can possibly make your success factors. If you have nothing right now, there are still many opportunities to pursue. As soon as you have at least one key success factor, proceed with a step five. Analyze client's needs. Think how they can be better satisfied with the use of your success factors. Formulate the advantages that this will present. And the last, sixth step, try to formulate your offers. This should be a value proposition that appeals to clients, has competitive advantages and is based on the key success factors. If you are successful in this way, you get competitive capacity. The more factors and advantages you have, the better offers you can provide and sustain, the higher capacity is. What we've just taught is the basic structure and the process for tuning your competitive capacity. Research the market and understand your competitors. Then put your own company to the frame and find out where you are weak or strong. Add clients dimension to this, find out what they want and how your competencies can be used to create better offers. Whatever business you are involved into, this precision is extremely useful to tune your competitive capacity. [MUSIC]
