Question

Topic: Strategy

How To Obtain A Share Of The Market. (monopolized)

Posted by raphaelfu on 9/1/2015 at 1:28 PM ET 250 Points
Hi, I work on a strategy for a new shuttle company that operates in Central America.

There is only one competitor and currently controls the whole market. Its strategy is to pay a fixed commission to sellers, (inns and hotels). Approximately 7% and 10 % of the sale value, this is not variable or scalable.

Their service is announced at strategic points where potential customers are staying, they also have a website where people can buy your ticket online.

The market opportunity is really good. They travel at least 4 times a week.

The company I work for has the same cars and possible routes. We want to improve the service.

What strategies can I use to enter this market?

What benefits can I offer to sellers?

I appreciate any ideas or advice.

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RESPONSES

  • Posted by Mike Steffes on 9/1/2015 at 2:23 PM Member
    "We want to improve the service."
    Improving the service for the customer may not be as good a strategy as improving the price for the seller.
    Look into combining and scaling.
  • Posted by Jay Hamilton-Roth on 9/1/2015 at 6:42 PM Accepted
    It sounds like you're simply considering on offering the same services at similar pricing. If so, why would someone use your service instead of the competition? They have a trusted name and people know what to expect (including the inn and hotel keepers). What's needed that others cannot do? Smaller/VIP offerings? Larger/tours? Business people?
  • Posted on 9/1/2015 at 7:14 PM Moderator
    What unique benefit or advantage do you offer? If you're a me-too offering, then why would anyone switch? Price isn't a reason-for-being ... and may even be a losing strategy.
  • Posted by dalcid on 9/2/2015 at 10:16 AM Accepted
    If I were sitting with you right now, over a cup of coffee, chatting about this, the one question that would always come up is: What is the one thing that customers really want from these shuttle services? Do they just want to get from point A to point B... the fastest? cheapest? in the nicest car? by themselves (ie. not shared with other riders?). Customer satisfaction is your bread and butter, so definitely make sure you understand and can deliver what the market wants, as you will ultimately benefit from word of mouth.

    Once you answer the Customer question, then you will at some point need to consider differentiation - "improving the service" is way too loose of a statement for us to understand what your competition offers. You can set yourself apart by being the fastest (fewer stops per car, but you need a bigger fleet), the cheapest (smaller fleet, more stops), and so on... or you can combine two benefits or a benefit with a feature (nice cars; free bottled water; option for a tour; partner discounts....). Finding differentiation is not easy in a saturated market as EVERYONE is trying be different in some way; the trick is to be different by offering a better experience.

    To this end... as our first question was about the customer, now the question is: What shuttle benefit is missing from the market? If you can offer that missing benefit that also delivers "what customers want", then that's your formula. You probably know that it's going to take some serious resources to answer these questions - whether it's a lot of time, or money, or both. Hopefully we have given you a head start.

  • Posted by dalcid on 9/2/2015 at 3:52 PM Member
    [good grief i just went verbal overboard and basically said what Jay had written up there, and quite succintly might I add]
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