Competitive insight – is it needed? Do you care enough?
Have you been surprised by your competitor moves or even lack of moves? Found new competitors you did not know of?
What is better, just a few competitors or many?
Do you really know who your competitors are? Direct, indirect, new …
Most companies see competition as the enemy – many times as weak or at least not smart. But at the same we all know that together we determine how we compete. Is it on value, service, brand name, channel power, speed to market or is it an all-out price fight?
What to do?
- Scan the horizon, who are your real competitors. Go beyond the ones that offer the same product or service. Look at alternative technologies or solutions. Include up and downstream players who are competing for the same value.
- Analyze your competitors really well. Move beyond the stereotype, learn all the facts, make systematic analyses of costs, products, trade flows, market share dynamics. Use old & new techniques from social media analysis.
- But also understand your competitor’s behavior, their emotions, the personal agendas. Use role plays to get into their mind. Do this at least every two years.
- Review your inside-out SWOT in the light of your competitor’s perspective.
- Make scenarios how the competitive arena will develop, try to predict the counter moves to your great strategy.
- You do not need to accept the existing/historic way of competing, it is possible to change the rules of the game.
What do my own experiences suggest
In many management teams the informal images and perceptions about competitors are at best incomplete and often wrong or misleading. Recent events and individual experiences/war stories color the mind.
In the many competitor reviews that I have initiated or facilitated the teams always are surprised how much more they actually know if they would only actually get the info together. At the same time outside new info is in most cases a crucial input to better insights.
But it all comes together in well prepared role plays, nothing can beat getting into the competitors mind and being them. They work in all parts of the world and in all types of industries. Serious gaming pushes your teams to new interpretations of known facts, but also shows lack of info. Some generalized findings:
- a competitor in trouble is less predictable, beware of unforeseen moves
- It’s good to have a few high cost competitors, flatter cost curves create extremely volatile earnings.
- Oligopolies have more unpredictable behavior them industries with many players
- Market share is important – but it has to be relevant share – the share that creates customer preference and/or cost advantage