How many competitors do you think you have? Are you sure your environment isn’t more competitive than that? It is easy to underestimate how many competitors a company has. While finding out about direct competitors is easy, the threat of indirect competitors (or threat of substitutes) can be more difficult to evaluate. Ultimately, when does this competition matter, and when is it less of a problem? Let’s find out!
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Even with a great idea in mind, starting a business is tough. It may require resources, knowledge, capital, and even a permit or license – and existing competitors won’t make your life any easier. Entrepreneurship is an exciting adventure, and we are all attracted by potential profit. But aspiring entrepreneurs must consider how tough the barriers to entry are to see if entering a market is technically possible.
Even when it is technically possible, entering a new market does not guarantee success. That is why I like to differentiate the two types of barriers to entry: those that prevent access to a market and those that prevent new entrants from having a fighting chance at making a profit.
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If you’re anything like me, you get way too excited when you receive a notification telling you something you ordered was delivered. Unpacking and having to remove tons of tape and packing materials can kill this initial excitement. However, some companies manage to make this process exciting and provide a fun and enjoyable “unboxing experience”. You probably even came across content creators posting these “unboxing videos” and showcasing products they like. Is it worth putting so much effort into making the packaging as attractive as possible? Would every entrepreneur benefit from offering their customers this experience?
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If you shop online, I’m sure you’ve been there: you find an item you really like at a decent price, you add it to your cart, begin checking out, and find out that shipping will add an extra $7 to your bill. What an awful surprise. The idea of paying for shipping greatly upsets you, and you give up on your purchase. Does this sound familiar? I’ve certainly done that many times. In the age of Amazon Prime, should other online businesses offer free shipping? Is charging for shipping a thing of the past?
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People will buy products that solve their problems and/or make their life better.
That is for me the main idea on what’s an attractive value proposition and I could stop writing here. But as the basketball coach John Wooden said, “It’s the little details that are vital. Little things make big things happen.” Let’s see how the customers evaluate a value proposition, make their decisions, and why this isn’t easy for them.
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Premium means more than just good quality.
I remember going out with this girl a couple of years ago. She was really into fashion and always wore a stylish outfit. In a conversation, she was very excited to tell me that she was carrying her rare Louis Vuitton purse that day and the story behind that purchase. I know absolutely nothing about fashion, but I know these are not cheap. Sure, her purse looked good. But why was she so excited about it? Was it because of a unique design? Or extremely high-quality materials? What justifies the four-figure price tag?
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The other day, I ordered a pack of two bottles of a health supplement I wanted to try. Two days later, I received a large cardboard box, inside of which was a smaller box between the bubble wrap. And guess what I found inside the small box? Each bottle was individually packaged in another box! It’s not like I ordered fancy crystal wine glasses; all of this packaging was protecting two small plastic bottles. I am grateful some companies are using more sustainable practices, and I am sure this excess use of packaging will make this company lose its most environmentally-conscious customers. But what can businesses do to minimize their impact on the environment? Besides the ethical issue, how does this affect their bottom line?
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“Metaverse”, “Cloud Computing”, “Datafication”; these days, it feels like every other news article about business is trying to use as many technology keywords as possible. We hear about innovation and disruption in the entertainment, medicine, and transportation fields everyday. I’d say that half of the people using these buzzwords have no idea what they are talking about, but they feel they have to use them to sound smart. It is easy to get a sense of technology being important for businesses and entrepreneurs, including those operating online. A huge part of top companies are tech for certain reasons. Technologies and technical processes can create opportunities and improve operations. After all, the internet is the reason ecommerce exists in the first place. But technology can also kill businesses unwilling to adapt to the ever-changing environment. Let’s see how.
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I recently purchased a Fitbit watch, and I fell in love with it. I now spend more time tracking my heart rate and sleep patterns and finding ways to “improve” my scores. Maybe I am a fitness nerd, but I find all this data and fancy reports addicting. But why did I buy this watch in the first place? In my last two articles, I talked about how politics and inflation affect business and Ecommerce strategies. Today, I want to discuss the impact of societal factors and give a few examples of opportunities they have created over the last few years.
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At the beginning of 2022, we all realized how crazy inflation is. It hit me hard when I saw the price of my favorite brisket sandwiches increase by $1.50. Everything becomes so much more expensive : our favorite foods, plane tickets, housing, gas, etc. Many of us changed our shopping habits in response to the high inflation rates (I still buy the brisket sandwiches but sadly travel less often). Businesses had to adapt to maintain their profitability but also to keep customers interested. Let’s see how inflation impacts ecommerce and businesses in general.
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My name is François, I’m the author of this blog. I love writing and talking about business and ecommerce. I hope you enjoy my work, feel free to contact me for any suggestion!