Identification and Analysis of Competitors

Competitive analysis is an important part of any business plan, because it explains who our current and potential competitors are, what are their strengths, weaknesses, what is our competitive advantage compared to them and what place in the market we are going to have. Despite the fact that our product is innovative and such kind of product does not exist in the market, we cannot say that we do not have any competitors. Our product has both current and potential competitors that will influence both our strategy and decisions made within the strategy.

Current competitor

First of all, our direct competitors are traditional paper books provided by the Universities and offered for students at libraries. This system has been existing for many years and it is a fact that students and Universities are used to it and are quite resistant for any changes, even small ones. Nevertheless, we are living in the edge of technology and sooner or later the system of traditional paper books will face difficulties, because more are more people are using eBooks. Compared to the Smart Tutorial Books (STB), traditional books have their own strengths and weaknesses, which are presented in the table below:

Traditional paper books at the Universities
Strengths	Weaknesses
1. Feeling that traditional books give	1. Inconvenience: size, weight
2. Possibility of sharing	2. Possibility of damaging
3. Students are used to them	3. Impossibility of annotating
4. More focused	4. Storage
	5. Shortage of books
	6. Environmental issues

As you can see, traditional paper books at the libraries' have both their strengths and weaknesses, but let us start from the strengths first. Many people enjoy the process of reading itself: they like to hold books in their hands, to turn the pages and to feel the paper. Same with the students, many of them like to study with paper books, because they understand and memorize some things better when they see them on a paper. In addition, some of the students share their books with friends or classmates, because it is cheaper and even if your friend does not have a book, you can always lend him yours for some time. Furthermore, students are used to paper books, because this is the way how it worked all the time and actually, this is a big advantage, because it is difficult to change people's perception, attitude and minds. The last, but not the least is that students feel themselves more focused reading a paper book, because there are less distractions compared to the eBooks.

On the other hand, paper books have some of the disadvantages that we are going to discuss in this paragraph. First weakness is that paper books are inconvenient: they are big and heavy, you can not carry them with you every day and this is the reason why many students do not have books during classes. On the contrary, each student could have his STB during the classes and professors could use this possibility as a big advantage in their teaching process. Secondly, there is a possibility of damaging paper books, which may lead to additional undesirable payments for students. Third weakness is the impossibility of annotating, because books are the property of Universities' and students are not allowed to draw or write something on the papers, although some of the students violate these rules and as a result damage books. Fourthly, some of the Universities may face a problem of storage, due to the fact that Universities store books in big quantities and sometimes they may not have enough space for all the books. Fifthly, because of the storage issues Universities may face a new problem of the books shortage, due to the fact that it is physically difficult for the Universities to have hundreds copies of different books available. Sixth weakness is that nowadays we are facing big environmental problems and paper books have their own contribution to the increase of such problems.

Potential competitors

We assume that in the future we could have two possible competitors. Firstly, lots of students are looking for the online versions of paper books on the Internet and despite the fact that usually they cannot find a copy of the whole book, it is possible to find some of the book chapters or descriptions. Currently such kinds of competitors have a lot of weaknesses compared to their only strength – zero prices. The major weakness is that it is illegal to post online versions of books for free without the author's permission and these actions may lead to big consequences. At the same time it is legal to buy online versions of books on special sites, such as Amazon.com, but these sites charge high prices for books, because they do not lend books, but sell them. Thus, students will not buy books for their classes online, because prices are higher compared to the traditional books or STB. Nonetheless, if someday the legal issues about the authors rights change, online books will become our real competitor.

Moreover, our second potential competitor could be another firm that decides to open same business in our country or open it in another country with a d rights. Because of this our company should use the advantage of becoming the first company that will sell the STB for the purposes of studying in Kazakhstan. In order to use the advantage, we need to carefully prepare our business plan and follow the guidelines in implementing all the steps. By following the plan we will be able to establish our company as a market leader and deserve a reputation of market innovators who are not afraid of taking risks.

Competitive Strength Grid

Due to the fact that we have two competitors – the major competitor is a producer of paper books and a second competitor (potential) is legal online version of paper books. Based on the strengths and activities of these two competitors we are going to create a competitive strength grid, which includes the comparison in possession of key assets and skills:

Assets and skills	Weaknesses	Strength
Materials needed	Paper books	Online books
Legality	Online books	Paper books
Costs for the production	Paper books	Online books
Prices	Online books	Paper books
Storage	Paper books	Online books
Connection between a reader and a book	Online books	Paper books
Time needed for the creation of a book	Online books	Paper books
Experience	Paper books	Online books

Despite the fact that paper books and online books have the same number of weaknesses and strengths, traditional books remain our major competitor, due to the fact that online books have big problems with the legality and high prices, which does not allow them to compete in a market with the paper books. Based on the analysis we assume that our competitive advantage consists in the product differentiation, due to the fact that we are offering innovative and environmentally friendly product, which will satisfy the demand for low book prices and will represent in itself the new technological era. It is obvious that competitive advantage can not be permanent, because sooner or later your competitors will come and try to imitate you. For this reason we are going to constantly improve our performance, change technologies when needed and listen to the customers' needs.

The main point here is that we are going to compete based on the differentiation strategy, which will be supported by the primary areas. In order to deliver our competitive advantage to the customers' minds and attract the market share, we will implement a competitive strategy in product, distribution, pricing, promotion and advertising areas. Many of the factors concerning these areas were mentioned earlier, but we will shortly describe each of these area in the following paragraph.

In the product area we will pursue a product differentiation strategy, due to the fact that it is innovative product that offers something new to the market, which other competitors are not offering. Moreover, we will use a manufacturer's representative's distribution channel including e-book manufacturers, book authors, universities and our company. In the pricing area we are going to use a markup strategy and a retail price will be 12,000 tenge, which is different compared to our competitors. In addition, our promotion and advertising strategy will be based on the presentations, product trials, discounts and it will heavily rely on the positive word of mouth promotion created by students who will tell their friends about the advantages of our product. Following these strategies we believe that the competitive advantage of our product will become real and sustainable.