As entrepreneurs, one of the first and essential steps we must understand is how our product or service fits into an existing market. This may be true for most small businesses unless it is a startup that brings a new product and creates a new market. Sam’s Medical Lab is a full-service medical laboratory that operates in a moderately competitive and attractive market. Medical laboratories play a vital role in healthcare systems and are critical for patient diagnosis and treatment. Understanding who the customers are and what they need is crucial in gaining an advantage over the competitors. Understanding the market and the value our competitors bring to the table is a vital step in determining the competing forces we are battling (Blank 2020).
Many businesses fail to understand the different types and believe that all startups are the same and that one strategy that worked with one is appropriate for others (Blank 2020).
Blank describes four different types of startup markets.
- Startups that are entering an existing market.
- Startups that are creating an entirely new market.
- Startups that want to resegment an existing market as a low-cost entrant.
- Startups that want to resegment an existing market as a niche player.
Sam’s Medical Lab is a business that fits into an existing market and provides laboratory services that outperform the competitors in efficiency, price, and turnaround time. To succeed in the existing market, the business must understand who the competitors are and what market share belongs. Furthermore, we must understand what is essential to the customers and what drives them to use the competitors’ products. Are there existing standards, and how we plan to embrace the standards? One way to capture this is through a competitive diagram.
Through series of surveys and analyses, Sam’s Medical Lab developed a competitive diagram based on two key factors that customers deemed as most important to them, affordability and convenience.
However, competing for market share in this market involves more than just the ability to turn the results around in record time or charge the lowest possible fee for service. The difference-maker is in new trends such as mobile phlebotomy, home-bound laboratory services, value-add services to assist with patient management, assist with treatment monitoring, and provide real-time decision support.
As Joan Magretta writes, a competitive advantage is not about trouncing rivals but about creating superior value. Only if a company uses resources effectively can it deal with rivals sustainably (Magretta 2012). Sam’s Medical Lab is focusing its efforts and resources on precisely doing that. We plan on achieving the short- and long-term goals by perfecting our strategy, investing heavily in training our managers and supporting teams, and implementing new technologies that will set us apart—building a reputable business that clients recognize and appreciate is more critical than trouncing the competition. We are open to working with our competitors on mutually beneficial solutions for improved patient health and well-being.
We support healthy competition and innovation and strive for excellent service that sets us apart.
Blank, Steven G. The Four Steps to the Epiphany: Successful Strategies for Products That Win. John Wiley & Sons, Inc., 2020, Amazon Kindle.
Magretta, J. (2012). Understanding Michael Porter: the essential guide to competition and strategy. Boston, Mass: Harvard Business Review Press.