Magic Culture Company Competitive Positioning - Case Study Example

Students Name and Number: Lecturer’s Name: Institution: Course: Date of Submission: 1.0 Competitive positioning The competitor analysis is a necessary background research for our business plan. In this section, our focus will shift from our competitors to our business; specifically what factors will set our products and services apart from our competitors such as Timberland, Patagonia ,Bass Pro Shops, Cabello’s, L.L. Bean and REI. Previously, we had highlighted the business potential sources of competitive advantage through writing a mission statement, conducting a market analysis, and determining the value proposition in the competitor analysis above. This section will examine the competitors’ analysis section closely; formalize the sources of competitive advantage for the business where we are going to use two approaches to explain Magic culture sources of competitive advantage 1.1 Opportunities-threats approach The competitor analysis grid shows the weaknesses and strengths of a company’s competitors and the other half of SWOT analysis looks for opportunities and threats that a company can use. Basically, there are two types of strategies under the competitor analysis grid, namely; weakness-opportunity strategy and strength-threat strategy. 1.1.1 Weakness-opportunity strategy Magic Culture Company will use a weakness-opportunity strategy to create an opportunity for its business based on a weakness found in competitors such as Timberland, Patagonia ,Bass Pro Shops, Cabello’s, L.L. Bean and REI to make them sources of competitive advantaged against these competitors. Using this grid one of the source of competitors’ advantage for Magic culture is that it the only website that will displays a specific target audience (women aged between 25 and 40 who buy outdoor clothing) as a quick scan through the websites of our competitors does not reveal who the website is targeting. This will be a source of competitors’ advantage for Magic culture online clothing business as customer want to deal with specialists as they believe they understand their deep-seated needs and desires at a core level, it will be easier to for Magic Culture keep on top of trends and best practices, it has more value and the business name will spread rapidly, and it will be easy and less expensive to get customers to know, like, and trust the company. In our competitive analysis section, we found out that some of the competitor’s website like Patagonia had a problem loading. The speed of loading is slow. This will be a source of competitive advantage for Magic culture as customers will switch from our competitors websites which are taking too long to load to our website which will be fast to load we will reduce the number of background images and flash objects so as to increase on the speed of loading. We will also make sure that the images are optimized and that the codes are clean. The other source of competitive advantage for our company from the competitor weakness will be easy navigation on our website. Some of our competitors’ website like Timberland is very difficult to navigate on them. It is not easy for a visitor to navigate through the website easily. Magic culture will take up this weakness as an opportunity and develop a website will ensure that the visitors are able to find all the desired information without having any difficulty. We will place our navigation menu right at the top where all the visitors can locate it with ease. We will also make sure that the navigation links anchor texts are easy to understand and are relevant. The other source competitive advantage from our competitors’ weaknesses will be offering a money back guarantee and warranties for our products on our website as none of our competitors website has warranties to let the customers know what the terms and conditions are of purchasing a particular product. Magic culture intends to have this unique feature which will ensure that the customers are sufficiently informed of our terms and conditions of purchasing each product. Lastly, we are going to put in place a tracking system on our website to allow our customers to track where their goods. This has not been implemented by any of our competitors’ websites which makes our website to be attractive to customers as they need a website will assure them they will get their cloths on time Also, none of our competitor’s website has put in place chatting system where customers who have difficulties purchasing online or have inquiries can have an immediate response. Magic Culture website will have a chat system where will have customer care representatives who will be attending to the customers inquiries. This is better than sending their inquiries through email which may a lot of time for us to respond making it a source of competitive advantage. Competitor analysis grid Magic culture Timberland Bass pro shops Patagonia Specific target audience YES NO NO NO Easy navigation YES NO YES NO money back guarantee and warranties YES NO YES YES Strong Brand Name NO YES YES YES 1.1.2 Strength-threat strategy Our competitors’ websites such as Timberland has a strong brand name which makes popular to customers. To counter this threat we will launch a $200,000 advert campaign targeted at our core customers group. The slogan of our campaign will be “keep the money you give to the middleman and use it to get outdoors and enjoy life”. This campaign will discourage customer from buying outdoor clothing from timberland retail shops as it’s is expensive as compared to the price that we sell on our website. Moreover, we will offer discounts at various times of the year to even out seasonality and build awareness of our website. 1.2 Competitive Advantage Approach According to Porters, generic / competitive strategies can be adopted so as to achieve competitive advantage. These strategies relate to what degree the activities of a business are broad or narrow and also to what extent the business intends to differentiate its products. There are four competitive strategies which are cost leadership, differentiation leadership, cost focus and differentiation focus (Riley, 2012). Magic Culture intends to adopt two of the generic strategies so as to achieve competitive advantage over our competitors these strategies are: 1.2.1 Cost leadership With this strategy, Magic Culture will aim at being the lowest cost producer in the online textile industry. We intend to do this through cost minimization. The Magic culture agreement with Magic’s Indonesian-based manufacturing Company is our competitive advantage. The Magic manufacturing company will manage the inventory and produce what is needed to meet the demand (Just In Time Concept). This will ensure that the cost of production are kept low and will keep liquid Culture ahead of its competitors. If we are in a position to be the lowest cost producer, we will be able to enjoy the best profits in the markets and hence have a competitive edge over our competitors. We will discount our products so as to maximize our sales and thereby increase our market share. 1.2.2 Differentiation Magic Culture intends to differentiate its products so as to fit the needs of the clients through sustainable competitive advantage. We intend to introduce a new clothing measurement feature which will be easy and fun to use and will help the customers now how the clothes will fit. None of our competitors has this feature which will increase our customer’s satisfaction and give us competitive advantage. With this strategy, we will focus on generating value which will allow us to charge relatively higher prices and hence earn a better margin as compared to our competitors. 2.0 Domain Name We recognize the great need for having our own domain name for it will represent part of our identity that our customers and our business associate can easily remember and recognize. The domain name of magic culture will be www.magicculture.com.au. We intend to register our domain name with Domain Names Registrar (Australia) so as to prevent someone else from using it. There are several factors that we had in mind while trying to come up with the best domain name. To begin with, we wanted a Domain name that was unique so that our website would not be consumed with website of other website owned by other people. We also needed a domain name that would be easy for our customers and business associates to type and remember. It is for this reason that we used our brand name as part of our domain name since the customers could easily associate it with us. We also opted to keep our domain name as short as possible with only 23 characters so that it can fit perfectly in our client’s business cards as well as other offline media. We also ensured that we checked whether someone else had registered our domain name to avoid infringing on someone else’s copyrights. We visited http://www.domainregistration.com.au to ensure that this not domain name had not been registered before by any other person(s). We decided to go for a Dot com domain name as opposed to other domain names because of its credibility. The dot com domain name has more credibility. This is because it is the domain extension with the highest recall and almost everyone is familiar with it. Using other less familiar domain extension for our website may not be the same credibility as the one with a dot com selection. 3.0 Website host requirements: When we were searching for a website host, they are several things that we were looking. To begin with, we wanted a website with FTP access. Some host providers did not allow access of the website server through a web form. This means that it would limit our control and access over our web pages for this reason, we needed a website host provider that would has FTP access. We also needed a website host provider that will offer us with adequate disk space. Space may vary from one provider to another but if we would have preferred to have a website provider that can add us space. We expect that our website will require a lot of hard disk space considering the products we are dealing with. We were also looking for a website host provider with reasonable bandwidth. This refers to how much data will flow through a network in a given period of time. We were looking for a website provider that can offer a monthly at least 5GB. Based on our website host requirements, we decided that we would go for an online store builder. This is because it would give us the advantage of customizing our website. More over it was expensive and easy to use to build our website. 3.1 Store builder service A store builder service will allow webhosting as well as templates, storage space and allow us to build our website as inexpensively and as quickly as possible. Our preferred store builder service is Yahoo Web Hosting. We will go for the professional package which offers customized templates and other support services for $12.95 per month. There are several factors that made us chose Yahoo as our preferred store builder service. To begin with, yahoo has unlimited disk space which is ideal for our business. It also has an unlimited bandwidth while our minimum requirement was 5GB.it also allows FTP access. Yahoo store builder service also offers 330 website design templates that will allow us to quickly and easily build our website. Yahoo store builder service offers marketing tools such as Affiliate Program, Social Media Connectivity, Coupons, Search Engine Optimization, Loyalty Program, Daily Deals, Multilanguage Storefront, Gift Wrap and Product Comparison. These marketing features which will assist us to customize our marketing strategy, assistance in domain name selection, shipment services which are very important for our business, payment gate and storage space. All this website tools will allow us to customize our website so that it will be unique from the websites of our competitors. In addition, Yahoo webhosting administrative tools that will save us frustrations and time. It has plenty of inventory space and it can allow our company to sell both downloadable and physical tools. It also offers a variety of payment options for our customers including credit cards, PayPal, e-checks and other online payment mode which will be of advantage to our customers. Moreover, the shopping cart offered by Yahoo Webhosting allows for live order tracking, automated email confirmation and mobile access application all of which will allow our customers to keep track of their orders. Yahoo Web Hosting usually offers a Web Security features aimed at protecting the dozens of online transactions. Some of these features include: Secure Socket Layer and Fraud Protection Tools, PCI DSS, Backup and Restores Fraud Score. Finally we fund Yahoo WebHost to be suitable because it offered Help and support features. These are very important features for all those clients who may have questions or concerns while using our website. The Yahoo Webhost offers features such as telephone, email contact, Frequently Asked Questions, User Guide and live chat all of which will assist us to communicate with our clients in case they have any queries of any nature. References Riley J (2012). Competitive Advantage Retrieved on 7th October 2012 from http://www.tutor2u.net/business/strategy/competitive_advantage.htm Read More