copyright 2007 Urbany and Davis, Revised and used with permission Smith Design, Ltd.: Applying 3-Circles Strategic Insight in 3 Circles Prepared for

*copyright 2007 Urbany and Davis,Revised and used with permission

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Smith Design, Ltd.:Applying 3-Circles

Strategic Insight in 3 Circles*

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Prepared for Toro/EIGCA seminar October, 2011

©copyright 2007 Urbany and DavisA

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The Case of Hop-n-Scotch

• Bad things can happen when tactics take the place of marketing strategy!


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Smith Design, Ltd.

Applying the 3-Circle ProcessAn Illustration

The 3-Circle Elements

• Market - organizations with needs to satisfy, money to spend, and a willingness to spend it.– Market segments - sub-groups within a

market that share important demand features but differ from others in the same market

• Firm - firm or a unit of the firm• Competition - one or more organizations

pursuing the segment being analyzed


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Smith’s Market Options

• What markets might Bradley Smith consider for the Context of the 3-circle analysis?


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Selecting a Market

• Group of Prospects with:– Needs to satisfy– Money to spend– Willingness to spend it

• Issues to Consider:– Strength of the need(s)– Size of the group (segments?)– Alternative solutions

Market Context Statement(step 1 to be revised later)

“My goal is to figure out how (I/we/my company/division) can grow by

creating more value for (customer/market segment) than (my competitors) do.”

“My goal is to figure out how Smith Design, Ltd.

can grow by creating more value for

Multiple use course adapters than

competitors for this market do.”

Customer Analysis (steps 2, 3, & 4)

• Customer Value Basics– Attributes/Benefits sought by the market and

its segments, along with importance

• What does Bradley Smith know and what can he learn about this market?– Sources of information?– Are there market segments - Subgroups

defined by important demand features?

Begin with the circle, the area of which represents

requirements, needs or desired seller attributes

of courses seeking multiple use adaptations.

1. Customers’ Desired Attributes


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Benefits Sought by Market

• What are some attributes or desired benefits you might expect of this (adapters) market?

Market’s Desired Attributes

• “Before” analysis (data from inside Smith Design)– Sources?


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Market’s Desired Attributes

• “After” analysis (data from actual or potential customers) – Sources?


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• Heavy usage• Permanence (durable)• Design competitively priced • Aesthetically pleasing• Low maintenance• Easily accessible• Broadly appealing• Urgency (immediacy)• Etc.


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Importance and Reconciliation

• Estimate importance (low, moderate, high) for “Before” and “After” worksheets (column 2)

• Reconcile differences– Potential insights?


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• Heavy usage - H• Permanence (durable) - M• Design competitively priced - H• Aesthetically pleasing - L• Low maintenance - M• Site easily accessible - L• Broadly appealing - L• Urgency (immediacy) - M

For courses seeking multiple

use adaptations…


• Price• Heavy usage• Permanence• Low maintenance• Urgency

assume these are the most desired attributes


• Heavy usage• Urgency• Permanence• Competitive price• Low maintenance

…but even if they have the same needs, not all market members have the same need priorities

• Low price • Low maintenance• Heavy usage• Permanence• Urgency



Priorities define market segments



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Attribute Importance Rating

• Segment 1– Heavy usage– Urgency– Permanence– Competitive price– Low Maintenance

• Segment 2– Price– Low maintenance– Heavy usage– Permanence– Urgency

1. Customers’ Desired Attributes• Heavy usage

• Urgency• Permanence• Competitive price• Low maintenance

“Private Developer”

A segment is selected for analysis based on several criteria…


“Municipality”

?

?

Selecting a Segment for Analysis

• Readiness to Act

• Accessibility

• Size

• Compatibility

• Competition

1. Segment’s Desired Attributes


PrivateDevelopers

This segment best meets the conditions

What might some

“Deep Diving” reveal?


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Segment Context Statement(step 1 revised)

“My goal is to figure out how Smith Design, Ltd.

can grow by creating more value for

Private developers of multiple use course

adaptations than

Green Space Providers, Ltd. and others do.”


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The Firm: Smith Design, Ltd.(step 5)

• Identify Smith Design Ltd. CRA’s for this segment– “Before” Analysis and Worksheet (column 3)

• Smith’s view

– “After” Analysis and Worksheet (column 3)• Market’s view

• How is Smith Design perceived by this market?– Does Smith have an accurate notion of what this

market believes about his firm?– Can Smith identify the market’s perceptions of his

firm?

Smith Design Attributes

• “Before” Analysis– Experience– Staff– EIGCA membership– Time– Relationships– Reputation

• “After” Analysis– Experience– Reputation– Time

2. CompanyEquities/Disequities

1. Customers’Desired AttributesSmith Design, Ltd.

Smith’s reconciled capabilities, resources, and assets are represented by this circle


1. Customers’Desired AttributesSmith Design, Ltd.

Smith’s reconciled capabilities, resources, and assets

Time

Experience

EIGCA member

Relationships

Staff


1. Customers’Desired Attributes

This overlap represents the value customers in this segment believe Smith can create for them

Smith Design, Ltd.



… in other words …

Smith Design, Ltd.



This overlapping area represents Smith’s positive value or “equities.”

Equities

Smith Design, Ltd.



Disequities andPotential Equities

Smith needs to determine how much his firm’s equities overlap with this segment’s needs…

Unmet needs

Smith Design, Ltd.



Here we match the overlap of Smith’s CRAs with this segment’s needs?

Smith Design, Ltd.

Urgency&Time

Permanence&EIGCA

Private Developersegment

Aesthetic&Experience



These areas are also meaningful

Smith Design, Ltd. Private Developersegment



Customers feel they don’t need some of the value Smith creates (yet?)


Smith Design, Ltd.



Here Smith has his unmatched and matched CRAs

Smith Design, Ltd.

Urgency&TimeStaff

Relationships Permanence&EIGCA


Aesthetic&Experience




… and there are needs of the segment neither Smith nor his competitors recognized so they go unmet…

Unmet needs

Smith Design, Ltd Private Developersegment




… an unmet (or unrecognized) need might be…

Smith Design, Ltd Private Developersegment

Environment friendly




Next Smith must recognize…

Unmet needs

Smith Design, Ltd

Equities





Some of this space is shared with competitors

Unmet needs

Smith Design, Ltd

Equities



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Competition (step 6)

• What other firms are pursuing this market segment?– Likely sources of information?

• “Before” Analysis Worksheet– Smith’s view of competitors (Green Space Providers,

Ltd.) resources (column 4)

• “After” Analysis Worksheet– Segment’s view of competitors (Green Space

Providers, Ltd.) resources (column 4)

Equities

Disequities/potential equity

Unmet need

1. Customers’desired attributes

2. Companyequities/disequities

3. Competitor equities/disequities

… there are competitors who also create value for customers…

Smith Design, Ltd.

Green Space Providers, Ltd.


Points ofParity


Equities


Unmet need




What both Smith and his competitor offer…

Smith Design, Ltd.



Points of Parity





Once Competitors are added…




Every unique area in the model takes on meaning…




BPoints of Parity

… Area B contains the table stakes… value Smith must provideto be in the game…



Absolutely must have…


Aesthetic & Experience






BPoints of Parity

… Area A is Smith’s unique value to customers, the most important concept in his competitive strategy…

ASmith’s points of Difference



Smith has these advantages over the competition…

Smith Design, Ltd.

Urgency& Time

Permanence& EIGCA







BPoints of Parity

Yet, the competitor has desirable points of difference as well…


CTheir pointsof Difference



Smith must neutralize or duplicate this…


Broad appeal






BPoints of Parity

Smith’s profitability depends upon the relative size and importance of his Area A compared to competitors’ Area C





Are Smith’s advantages more attractive than the competitor’s?

Smith Design, Ltd.

Urgency& Time

Permanence& EIGCA


Broad appeal






BPoints of Parity

Area D is value competitors create that currently is not seen as valuable by the segment!

AYour points of Difference


DCommon disequity/Potential equity



Possibly essential resources but often ignored by the market…

Smith Design, Ltd.

Staff







BPoints of Parity

… and each competitor has its own unique area of Potential Value




ESmith’s disequity/Potentialequity

FTheir disequity/Potentialequity



Opportunity exists here…

Smith Design, Ltd.

Relationships



Size 3. Competitor equities/disequities




BPoints of Parity

Significantly for the future, every customer/segment has “white space”






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“White Space”


2. Smith’sequities/disequities


BPoints of Parity

… an area representing customers’ needs that haven’t yet been met…






G

“White Space”



Can Smith do something about this unmet need?






2. Smith’sequities/disequities


BPoints of Parity

This illustrates the model… it captures the market segment, the firm, and the competition.




ESmith’s disequity/Potential equity


G

“White Space”



So in the final analysis, the 3-circles might look something like this…

Smith Design, Ltd.

Urgency& Time

Staff

Relationships Permanence& EIGCA


Broad appeal


Aesthetic & Experience


Size 3. Competitor equities/disequities


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Alignment (step 8)

• Does Smith Design have a “Competitive Advantage” in this market?– Points of Difference– Sustainable CRA basis for points of difference


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Dynamics (step 9)

• What changes are predictable in the:– Market– Competition– Environment


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Finding Growth Opportunities (step 10)

• Is this a viable segment for Smith?– Can Smith meet its needs better than the

competition?– Is it financially attractive?


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Positioning Statement Format

• For (target customer)

• Who (statement of need)

• Our (product/brand)

• Is a (product category)

• That (key benefit/reason to buy)

• Unlike (primary alternatives)

• We provide (differential advantage)


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Smith’s Positioning Statement

• For Private Developers adapting existing golf courses for multiple uses

• Who require rapid design responses that provides durable facilities,

• Our staff at Smith Design, Ltd.• Are highly capable and experienced land planners • that provide customized designs for multiple use facilities

including aspects of golf.• Unlike Green Space Providers, Ltd., • We provide designs that incorporate golf with regionally

appealing outdoor recreation and spectator venues that are environmentally friendly.


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Adding Tactics

• Now (and only now) Smith is ready to devise marketing tactics:– Assess the offering (learn new skills, acquire

equipment, adapt staff?)– Plan sales contacts– Design messages (presentations, media)– Set a price

Documents

*copyright 2007 Urbany and Davis, Revised and used with permission Smith Design, Ltd.: Applying 3-Circles Strategic Insight in 3 Circles* Prepared for

copyright 2007 Urbany and Davis, Revised and used with permission Smith Design, Ltd.: Applying 3-Circles Strategic Insight in 3 Circles Prepared for