Forum Posts

ACE CT Admin
Mar 05, 2022
In Strategy
You need to consider what your competitors are charging. If you want to charge more than your competitors, you need to ensure that your customers are willing to pay extra for whatever competitive advantage you offer. What are the most important costs inherent in the business model? Which key resources are most expensive? Consider what resources are necessary to keep your business functioning. If you are a dispensary, the most important costs would likely be your product, which is likely your most expensive resource as well. Does it make sense to differentiate my prices across consumers? How might I go about doing that? Consider the landscape of the industry and your profit margins. If you differentiate your prices across customers, how would the group of customers getting charged more react? Would they just move to your competitor?
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ACE CT Admin
Mar 05, 2022
In Strategy
Consumers might find the location of your business hard to access. That would be a switching cost to consider. Otherwise, if you offer a similar product or service, the switching costs might not be so high that a consumer would not try your product or service.
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ACE CT Admin
Mar 05, 2022
In Strategy
Switching costs are the costs the customer pays when it switches brands. There are high switching costs and low switching costs. For example, something like switching your phone carrier would be considered a high switching cost because you might have to pay out the rest of your contract, you might have to call a customer service agent or go into the store to end the contract, and you have to sign up for a new carrier and that might require going into the store. The time, money, and effort that would go into switching phone carriers means that it has high switching costs.
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ACE CT Admin
Mar 05, 2022
In Strategy
How do I identify my organization’s strengths? (e.g., assets, unique capabilities, market relationships) What are we doing well? What is our strongest asset? What data (both internal and external) do you have to support your claims? What might be some of my organization’s weaknesses? (e.g., lacking capabilities, high debts, staffing or cash flow problems) What are our lowest-performing product lines? Some weaknesses could include difficulties training staff, lack of inventory, cash flow problems, lack of a talent pool to hire from. What are my opportunities? (e.g., market trends, market gaps, talent) What trends are evident in the marketplace? What customer group are we not targeting? What are threats to my business? (e.g., emerging competitors, reliance on suppliers/distributors, etc.) How many competitors exist? Are there new regulations that could harm our business? Do my suppliers have a strong business model? Am I over relying on one supplier?
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ACE CT Admin
Mar 05, 2022
In Strategy
SWOT stands for strengths, weaknesses, opportunities, and threats.[i] Opportunities refer to external opportunities that could give a business a competitive advantage. An example would be finding a great location with relatively low rental cost. Threats refer to things that could hurt the business. An example could be a competitor setting up close to you and a shortage of cannabis flower (if you are a dispensary). This is an exercise for you and your team to do to determine the best strategy for the present and future. It is important to use internal and external data when listing out your business’s strengths, weaknesses, opportunities, and threats. [i] Investopedia. Investopedia, n.d. https://www.investopedia.com/
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ACE CT Admin
Mar 05, 2022
In Strategy
A market tailwind is a certain condition that may lead to higher profits, revenue, or growth.[i] If you are a cultivator, economies of scale may help your business prosper. An economy of scale is when your average costs decrease when you increase levels of production. So, if you grow more flower, you may save in costs because the additional cost of adding a few more canopies decreases for a range of canopies added. Network effects are when more people using a service or product makes the service of the product better. This could apply to delivery as more customers using your delivery service could improve the business because it would lead to more drivers and perhaps more efficient routes. [i] “Tailwind.” Corporate Finance Institute, January 22, 2021. https://corporatefinanceinstitute.com/resources/knowledge/other/tailwind/
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ACE CT Admin
Mar 05, 2022
In Strategy
It is important to understand trends in the market because it can help you make decisions about the future of your business. What new products should you offer? What technology can you acquire? You can learn about market trends by conducting research on the internet and subscribing to cannabis magazines.
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ACE CT Admin
Mar 05, 2022
In Strategy
You can stay competitive in a horizontal line of business by capturing more of the market share. One way to do that is to merge with another business that sells similar products. Vertical integration is when you operate all aspects of the supply chain. This sometimes leads to cost savings and more efficiency. In the case of cannabis, that would mean you have some combination of the following businesses: grow business, transport business, dispensary, delivery business, testing business, and manufacturer business. You should only vertically integrate if you can save on costs by operating in different parts of the industry. A horizontal line of business would be any one of the business activities in the supply chain.
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ACE CT Admin
Mar 05, 2022
In Strategy
Yes, you should differentiate your product/company from your competitors. Otherwise, without any sort of difference, you would have to charge the same or lower prices to attract customers. To differentiate yourself, think about who your customer is and make sure your products meet their needs. Perhaps your customer is always busy, so convenience is key. How would you make your customer’s experience smooth and hassle free?
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ACE CT Admin
Mar 05, 2022
In Strategy
It is important to see what your competitors are doing and to determine if your competitive advantage is truly a competitive advantage. If you capture a large portion of the market share early, it is easier to sustain your competitive advantage.
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ACE CT Admin
Mar 05, 2022
In Strategy
Competitive advantage is the thing that sets your business apart from other businesses. For example, Walmart’s competitive advantage is that it always has low prices. On the other hand, Target’s competitive advantage is that it has desirable, trendy products offset with slightly higher prices.
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ACE CT Admin
Mar 05, 2022
In Strategy
Market competition is when there are businesses offering similar products. Think about what metrics you can use to determine market attractiveness and anticipated competition (e.g., level of competition, potential for new entrants, supplier power, buyer power, substitute products)?
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ACE CT Admin
Mar 05, 2022
In Strategy
Think about how your business will be profitable. If you go through a SWOT analysis (featured in question 13), you can determine what business capabilities are needed given the current landscape.
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ACE CT Admin
Mar 05, 2022
In Strategy
Market entry means how you are going to break into the cannabis industry. This is dependent on your funding and capital needs. If you do not have a lot of capital on your own, one option is to engage in a joint venture by partnering with someone (usually with a lot of capital) to start the business. As a social equity applicant, you still retain at least 50% ownership in your company, but you need to find the right partners.
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ACE CT Admin
Mar 05, 2022
In Strategy
To capture market value means to capture the most customers you can. Think about using marketing to capture market value by marketing your competitive advantage to acquire new customers. You can also engage in marketing strategy to retain existing customers.
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ACE CT Admin
Mar 05, 2022
In Strategy
It is important to define the value proposition of your business because it can help you market your product and guide your strategy. How do I define/understand my target consumer? It is important to divide your customers into groups (or segments) with similar characteristics based on their needs, behaviors, and demographics. Then you can select and target the group that you think your product best serves. Always start by outlining the customers’ needs, then behaviors, then demographics. If you start with just demographics, the group might have too many differences within the group, which will make for a difficult marketing strategy. If you are a dispensary, here are some questions to consider based on this segmentation framework: What do your customers need? Are they looking for cannabis products for health reasons like muscle aches or chronic pain? Are they looking for cannabis products for social reasons? When do they usually use cannabis? What age group are they? What generation are they? What is their income level? How can I reach Product/service-market fit? You need to collect data on how your customers are reacting to your marketing campaigns and what your customers are buying. This can help you understand if you’re serving your customers well. How should I think about a product’s positioning strategy (i.e., the value space your company occupies in customer’s minds)? One way to define your value proposition is to create a positioning statement by stating: Your target segment(s) Point of different (reason for customers to buy your product) Frame of reference (who your competitors are) Competitive advantage (why you are better than everyone else) How do I ensure my employees/partners understand our value proposition and can execute it? As the owner of your business, you set the culture, mission, and vision. It is important to develop routines and hire the right people that can execute on the value proposition.
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ACE CT Admin
Mar 05, 2022
In Strategy
You can do a market analysis of the existing cannabis industry in Connecticut. This can help you understand where businesses are already located and what they are already doing. You need to consider what sets your business apart from your competitors. What can you offer those other businesses don’t already offer? One simple but important answer to this question is location.
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ACE CT Admin
Mar 05, 2022
In Strategy
A business strategy is your plan to make a profit with your business.[i] It should include the products or services you plan to sell, your target market, pricing, and expenses. A formal written strategy (business plan) is important because it can help attract investment, hire talent, and create a culture for a new business. [i] Investopedia. Investopedia, n.d. https://www.investopedia.com/
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ACE CT Admin
Mar 05, 2022
In Business Operations
If you have a general manager, that person should be responsible, but ultimately, the owner is responsible for creating the most efficient operation for the business.
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ACE CT Admin
Mar 05, 2022
In Business Operations
All businesses must acquire customers. Therefore, there is a customer acquisition process. This might include how you market your business to potential customers, how you track your customers’ response to your marketing efforts etc. Another business process is how you order the goods that become your inventory. Inventory management is important because often a business must pay for the inventory before it sells that inventory to its customers. Often there are financial incentives to pay for inventory in a timely manner. Early payment or “terms” have advantages in lowering the cost of inventory, however, paying early to take advantage of terms requires the buyer to have cash or access to cash. Other processes include packaging and shipping, accounting and banking, recruiting and training, payroll, manufacturing, public relations, and others. Essentially everything a business does is a process, and the owner should think through how each of those processes operate and strive to make them more efficient. The key questions the owner must ask are “How do we do this function? And, is this the best way to do it?”
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