1. Investigating Entrepreneurial Opportunities
Competitor and market research
Professor Colin Gray
It’s very important to have a clear idea of the likely competitive forces that face a new venture.
The well-known management guru Professor Michael Porter of Harvard has developed a five
forces classification that’s widely used to analyse competitive pressures – these include
existing competitors, new direct entrants that are promoting similar products, and new indirect
entrants who offer different products that provide similar benefits. In addition there are
pressures from large dominant customers and large dominant suppliers. It’s crucial to know
what prices and promotional messages competitors are pushing, plus how reliable they’re
perceived to be. How does Julian analyse the competitive pressures facing him?
Julian Brower
For me as a learner I was very keen to get specific targets and goals and to break down the
whole concept of analysing competitors and the forces that were going to affect my business
and compartmentalising them was very, very helpful. I can actually now sit down and look
individually at say bargaining power of suppliers. What does that actually mean? And I could
do that without worrying about the other factors involved so for me compartmentalising. As
an engineer I think in specific chunks and lumps so you know looking at er threats of - of - of
other companies coming in and stealing or using my idea it was just a way of condensing out
important factors based on individual areas like new threats, bargaining powers of customers,
threats of substitute products and services. So I found that quite useful. Now I didn’t even
know it existed but once I knew it existed I could then apply my particular problems to it and I
came up with some very interesting areas. For instance threat of substitutes. You know there
are companies out there that are already doing exactly the same thing but not quite the same.
So you know Gum Tree which is already offering these advertising services. Well I don’t think
it would take much for them. But I happen to know that is not in their strategy because I did a
bit of research. I wouldn’t have done that had I not thought about the five forces. And other
Internet companies are already doing this and have the infrastructure in place. But they are
not doing it. Why aren't they doing it? That was the other thing that came out of it. What is it
that they are not doing? And I had to find out a little bit about that as well. Local newspapers
– so what's the threat from them? They could actually just come in and provide a substitute
service. But once again highlighting it, compartmentalising it, allowed me to actually go into it
in a bit more detail
Professor Colin Gray
And you didn’t see the traditional sort of er cork board or the notice board that was found in a
village shop or other community spaces as being a threat to you?
Julian Brower
Well that was in fact very interesting because that as a threat why would they bother to come
to me when they’ve already got a system? And we’re actually dealing with community
business people who don’t like change. But once again it highlighted it. It went into SWOT
as a threat and came out as an opportunity. How do I convince those people that it's worthy of
them pulling down their AO board which adds a little bit of variety to a relatively boring daily
life in a village shop – that’s maybe a bit unfair but that’s the way I thought of it. So I looked at
ways of overcoming er that idea so you know they don’t need to change at all. But I think my
idea was that eventually they would see the other shops around them doing it and they would
talk to their other village shops and they'd ask and eventually they'd cotton on and say well
actually we are getting a lot more money. Because I actually worked out roughly in my area of
the local fifty or hundred shops how much they were making out of it and one of my marketing
ideas was to say to them you know you're getting 50p per slot. You've got half slots there so
you're getting twelve quid a week. I can make that thirty five quid a week without you even
touching anything and I can do that by adding all these taxi companies, all these pizza

2. companies, all these kebab companies, all these take away companies, your local Sainsburys
who do a national thing. And I can turn that into thirty plus quid. So that’s how I could turn
them around I think – success or not depends on actually what happens. I actually got a
couple of local shops to analyse it in great detail.
I went out there and I spoke to my friendly local Indian gentleman who supplies my local
newspaper. He’s brilliant – brilliant businessman. He came back with loads of objections.
Throw me the objections I said. I don’t want to know what's good about it. I want to know
what's wrong about it because then I can look for opportunities. So the threat – the threat
section got bigger and then it sort of progressively got smaller over the month and then it got
bigger again as I went out and found – you know good business is about as much about
knowing your threats as - as developing your opportunities.
Professor Colin Gray
And there are no other people doing similar things? It seems to me that some of the things
you've said seem so straightforward – so obvious
Julian Brower
But you know – someone asked me this question about another business. Why aren't they
doing it? I said well – my argument to that is I was queuing up at a roundabout with a two-
lane queue and there was a queue a mile long on one side and nobody on the other side.
Why are they there? So I went down the other side. It’s because people go with what they
know - they know best. They think because there's a queue that must be right. So that’s the
way people think. Entrepreneurs don’t think like that. They look at a queue. They see a long
one. They go in the short one. They deal with the problem at the other end of the queue.
Because it's not being done does not make it wrong. It means that most of the people – eighty
per cent of the people – won't do it because they’re not risk – risk type people. So you know
when you see something like that you - you have to – you don’t accept other people’s opinion.
You go and find out for yourself why it doesn’t work. And if anybody comes back to them and
says no it can't be done any entrepreneur will know this. If it says "no it can't be done", that
means your ears prick up and off you go
Professor Colin Gray
And how did you find out for yourself what the competitive forces were that you actually were
potentially facing?
Julian Brower
That’s a tough one. That’s very tough because companies aren't going to give their
information away and I think it discusses this in a lot of detail in the in the course – course
notes – how to go to companies – you have to be a bit sneaky. You know you have to go to
your local newspaper. You say you want to advertise. Local newspaper is probably an easy
answer. But you have to sort of delve through – for instance you might want to go to
Companies House, spend three or four quid on the um electronic version of their financial
statement and try and work out how they’ve earned this sort of money. There are a couple of
big companies that I wanted to compete with. One of them um er is a national news company
who was a potential competitor to potentially provide a substitute product. And I needed to
find out a little bit more detail and they are very clever in their financial statements. They
don’t give any details away. So how was I going to do it? So um I actually went through to
one of their local newspaper shops and um and asked questions and managed to get details
about firstly who was involved, who was their area manager. Unfortunately I couldn’t take
that any further because I think they’re quite smart. But I think you have to be sneaky. You
have to be inventive in the way you as qu4stions. Competitors are doing it all the time.
You've got people going into one supermarket chain from another supermarket chain writing
down the prices. That’s the way it works. You go into a bookshop. You write down the ISPN
number and then you go off on line and you buy it cheaper. That’s the way you have to
behave in this business environment.
Professor Colin Gray
It struck me also some of the areas and some of the potential people advertisers were
actually pizza – pizzerias there was Sainsburys and the Tesco locals and so on and so forth.

3. They are the sort of people who advertise also in Thomsons and in um local Yellow Pages.
How would you see yourself competing with them?
Julian Brower
Well they are quite viable threats. But I think one has to look at what their offer is and –and
their offer is based on a one year placement. So you have no flexibility in there. So if you're a
company selling logs from oak tees and then you suddenly change to beech trees because
that’s the crop you're cutting, it's no good going into Thomson Directory. Okay you could say
logged trees but there are other areas where you want to publicise – three bags for two – the
thing about e-board was it was very, very geared into time and how you could utilise. You
could change it at any minute. When you bought a slot on e-board it was yours and you could
do what you liked with it within the profanity rules. You could do what you liked with it and you
could do quick turnovers so the sorts of markets we were looking for or I was looking for were
the markets that wanted a ver fast turnover. So the local er national um the local country
house – National Trust country house doing a special promotion on this Saturday 'oh I've got
someone from the Antiques Road Show coming down.' You're there. Bang.
Professor Colin Gray
So you could appeal more effectively to the customer’s time – timeframe of decision
Julian Brower
Yes I think that’s a very important point of this. So it's something that newspapers were
offering on a weekly basis but e-board was offering on a one-second basis. It was the ability
to get your change of - your plan out very quickly. So that was one of the marketing
strategies. Certainly in the sell that was that was what I was offering.