There is always competition, sometimes in the form of substitutes.One of the forms of competition is “stealth” competitionYou can use suppliers, VCs, Angels, databases, etc. to track down “stealth” competitors9.What can an entrepreneur do when there are no business opportunities at all?There are always opportunities.Don’t be all negative about an idea; try to find positive sides in it.Modify your business model to eliminate its weaknesses.Don’t be rigid with your idea, constantly adjust it.10. Give a brief checklist of information that an entrepreneur should investigate.Customer, Market Size, Trends, Market growth Rate, Price/Frequency/Value, Distribution, Competition, Key Success Factors, Vendors.11.Discuss the limitation of first mover advantage in an emerging market where intellectual property protections are not a major factor.
It is uncertain if the position occupied by the first mover will remain the dominate position as the market developsSecond movers have the advantage of conserving resources that the first mover must expend to learn about the marketIf first movers increase operating scale by incurring fixed costs before a general understanding of the dominant offering is understood, its risks being out-maneuvered by an agile entrant with a differentiated offering and a more variable cost structure. 12.Why can’t companies raise prices after using penetration pricing strategy?First, attractive ventures are often launched in emerging markets where demand exceeds supply.Second, many new products are designed to be better than existing alternatives.Third, price sends a signal to the customer.Fourth, even if customers flock to the low-priced product, this rapid increase in demand can sometimes cause serious problems for a startup.Finally, these same customers may resist when companies try to recapture value by raising prices in the future.13. In contrast to the dangers of employing a penetration pricing strategy, describe the dangers of employing a maximal pricing strategy.A maximal pricing strategy can signal to other potential entrants that the market is attractive and increase competition.Maximal pricing with an early offering can reduce volume and make your operations vulnerable to fast followers and substitutes.A maximal price can slow the diffusion of your offering through customers segments, which in an emerging market risks early success at the expense of longer term dominance.In short, neither extreme is wise, and pricing decisions have implication in both the near and long term to your volume, positioning, competition, revenue, and margins. 14. List some vulnerabilities of competitors in larger, mature, consolidate market vis-à-vis a new entrant.High fixed cost structure, slower to respond to customer needs, limited by boundaries of its “brand” (i.e. people may not buy food from a washing detergent company), focused only on the needs of current customers, and optimized to compete against current rivals.15.Give two examples showing vendor power, both strong and weak.