KjApFi analysis
KjApFi-analysis is a very simple tool used in Strategic planning in order to estimate a new product's competetivness. It is often used in combination with other analyses such as the SWOT analysis and PEST analysis to estimate how well a new product can make it in a market.
Basic idea
Step one: Pick out categories for which a potential customer might consider valuable, such as price, availability and producer guarantees.
Step two: Rank them one a scale from 1 to 5 on how valuable they are to a potential customer based on InterViews or market analysis. 5 is more valuable.
Step three: The third step is to range if this new product is better, equal or worse than its competitors at the chosen categories.
Step four: Sum the points for the new product and the competitor's product. A rule of thumb says you should have at least 25% higher score than your competitor in order to be competitive.
Ex.
Category |
Priority for customer |
|
|---|---|---|
5 |
4 |
|
Price |
x |
|
Availability |
||
Environment |
x |
|
Producer guarantees |
||
Known trademark |
x |
|
Ease of installation |
||
This gives your new product a score of 8 and the competitor a score of 7, which suggest that you have a slight edge, but probably not enough to make it to the market.
Step one: choose the categories
The categories is often chosen from a large range of common categories. But it could also include more specific categories, for example for a new type of loudspeaker, you might consider adding categories such as sound quality and fault tolerance.
List of common categories
- Price
- Availability
- Safety
- Reliability
- Durability
- Lifetime
- Ease of installation
- Environmental friendlyness
- Producer guarantees
- Energy usage
- Known trademark
Step two: Rank the categories
The ranging of categories tend sometimes be somewhat arbitrary, but it is very important that the ranging is based on an actual analysis of the actual market. In KjApFi-analysis 5 is most valuable to a potential customer while 1 is almost unimportant to the customer. This can be done either by interviews or other kinds of Market research.
Step three and four
Great care should always be taken when ranging your product against your competitor, because entreprenours often tend to overestimate their new product's competitiveness. After making the final summation, the rule of thumb says your product should score at least 25% higher than the competitor's product in order to be competitive.
Origin
The KjApFi-analysis has it origin in the mercantile community in southern Norway as a way of quicker and simpler estimating a product's viability compared to its competitors. Its original working title was "Kjappere Approved Financing" where "Kjappere" is the Norwegian word for "quicker", but the developers of the idea failed to change the title before the KjApFi-analysis came to use.
References
- Editor's note: references to Business plan's using the KjApFi-analysis should be added if found.