[MUSIC] We've talked about competitive analysis and we've look at a tool for doing this work. And now I'd like to actually show you how you can actually construct one in real time. How you could actually build a competitive analysis matrix and use it. We'll look at examples inside arts and outside the arts world to kinda give you a concrete sense of how this work can get done. And I want you to also realize that, while I'm gonna show you some examples, you wanna find the right model for your organization. You don't necessarily just want to replicate what I show you. You're gonna wanna take it as a base starting point, but you need to customize and develop one that fits the kind of critical issues and traits of the field and organizations that you want to analyze. So let's start with the Corcoran in Washington, DC, a museum that recently announced that it's closing and it's merging with the National Gallery. What was its competitive position? What led to its decision to close and to change? I think we could develop a very simple matrix along the lines I'm showing here. Think about the kind of critical traits across the top. The hours of operation, the speed of rotation and change of exhibitions. Access to the museum in terms of public transportation, price of entry, and level of kind of interaction in the exhibitions. Think about those as critical traits. And then think along the other line about the competitive organizations in the immediate geography. There's the National Gallery, the Phillips Collection, the Freer, Portrait Gallery, and the Hirshhorn, right nearby. And if you would draw this picture, you'd start to see that well, I'm not sure that the competitive position of the Corcoran is really that strong. A lot of the other museums are free which is a huge issue. The level of rotation is fairly uniform, there are a couple that don't rotate as much. But there's nothing really here that the Corcoran has that really separates it from all the other organizations. It has an interactive element but so does the Hirshhorn and the Portrait Gallery. The hours of operation are actually less advantageous than its competitors. In short, I think the competitive position in this particular case shows that the organization doesn't have a great position, and ultimately they made the same determination at the museum. Now, are these traits across the top the only traits that are possible for doing competitive analysis? No. They're appropriate here I think for a museum, and particularly appropriate in this case because they are what's most common across the small population of museums in the D.C. area. But in other cases, if we went to a different location, different geography, or we talked about a totally different type of artistic program, you might want to have different traits. I only show this to you to give you a sense of how you can actually start to develop a matrix. You choose those organizations along the left side, you choose the traits across the top and then you have to very honestly and frankly position your organization and decide how you stack up. The whole exercise depends on an honest assessment of your real characteristics. If you build the matrix, you choose the competitors. You define the key dimensions or traits along which you're gonna compete and then you systematically deceive yourself, fool yourself into thinking that you're better along all the dimensions, which sometimes happens, this exercise won't be very useful. It depends on a very frank and honest assessment of what you really have to offer in relationship to what's out there. So that's a critical part of this picture. So if you think about what matters in the arts and cultural sector, I think there are a lot of possible dimensions. There's the question of price, there's a question of access, there's questions of technology and Internet access. There's a bunch of questions about the shops and the retail components of arts organizations or educational outreach dimensions that might matter. There are a lot of possible traits that you could use. I don't know what they are in your particular case, and in the organization that you want to lead. What I do know is that you need to think very carefully about which ones would matter most in your world. There's not gonna be a universal systematically applicable set of traits. It's gonna depend on the context. It's gonna depend on the world in which you're operating. Let's take another example of online giving. Let's look at a space where there's a lot of activity. There are a lot of organizations that are operating this online giving space. Let's look at one of them, Jolkona, a new entry, and see what its position might be and how viable it is. When you think about the three big starting characters I put forward in the last lecture, geography, product, and customer, Jolkona has some idea about what its core identity is. It's an online giving program that's really targeted at young people, aimed at giving them sort of real concrete sense of impact, that their online gifts actually translate into social impact. It focuses on budget-conscious younger people and it's really heavily focused geographically on US giving, it's not as global as some of the competitors. So where they started is start to map what other organizations are doing online giving in their kind of world. And they came up with a bunch of other competitors. They're similar in terms of the core giving product that's being offered. Similar terms of the type of donors that they're going after and similar terms of geography and focus. And what they ended up doing is constructing their own competitive matrix. And here they chose a different set. You'll see a radically different set of traits across the top. One was ease of use, functionality, ease of use. Second was the ability to partner with a large number of organizations and have a big selection of organizations that could be chosen for giving. Third, the focus on youth and younger people. Fourth was this idea of measuring impact and being able to report to donors the results of what they actually gave. Fifth was this idea of very low overhead, that all the money would go directly to the cause and not be diverted to administrative expense. And then finally was the kind of question of can the site handle small gifts, what's the average contribution size? And for Jolkona, they looked at the market and they said, we actually think that there's a possibility that we might have a formula that would be unique and different, enough to stand out in what I think is a fairly crowded environment. So they came up with this matrix and the basis of this analysis, they said yes we have a place in this environment. We can compete with big organizations like Global Giving and keep up because we're gonna have something different. Particularly, they end up focusing heavily on this idea of proof of impact, and focusing on younger donors. That was what they thought would be the most kind of distinctive element of the positioning. Is this youthful approach and this idea of tracking impact and be able to report more clearly what actually gets accomplished. So, we've done competitive analysis for two organizations. So we've looked at the Corcoran and we've also looked at Jolkona. Very different organizations, one in the art sector, one outside. But I think they share one thing in common which is that what you'll see across those two competitive analysis matrices that I presented, is that they require customization. The traits are different across those two because the organizations are different. So moving forward, here's what I'd like you to think about. I'd like you to think about competitive positioning as requiring a moment where you start to understand the market in which you're operating. You start to understand how turbulent, how open it is, and how many players are in it. Second, you start to define the key traits that you're gonna use to define the points of competition. These are gonna be the key internal and external characteristics that are gonna matter most, and they're gonna differentiate or not differentiate your organization. Third, you're gonna choose a group of organizations that you want to examine more closely, these are gonna be your closest competitors. When you put that group of organizations together with those lists of key traits and characteristics you'll have the basis of a matrice that you can use to understand your competitive environment. I think that's a starting point for moving forward with a deeper knowledge of the market in which you're operating and your chances of success. [MUSIC]
