This question seems so simple however a company that defines its competitive set too narrolwly can miss disruptive attackers and high potential growth opportunities. Just take a look at Blockbuster, Nokai and Kodak. They were all market leaders who fell pray to either disruptive technology or market changes. How can your company avoid a similar fate?
Let me guide you:
1. Define your target/objective
Far too often, organizations make decisions too quickly and without a strategic context — it is a case of ‘ready, fire, aim’ The internet has not helped this mindset, as the speed to market has become a more critical factor. Understand what you are looking to maximise.
2. Ask the right question or questions
Experience has shown that ‘asking the right question’ is one of the hardest steps for management. The key here is to understand what your business really wants, and how the insights uncovered will directly relate to a management decision or course of action.
3. Manage information effectively
The next driver for understanding what you have and don’t have within the business needs to come from studying the forces at work on your business’s competitive ability. These forces include competitors, technology, consumers, new entrants, industry trends and so on. Getting information on these forces is the first step in becoming knowledgeable about your competitive environment.
4. Analyse for insight and intelligence
A strategic plan that doesn’t include insight about the near future is truly next to useless. Yesterday’s information and methods are increasingly ineffective for making today’s decisions — and even less effective for identifying tomorrow’s opportunities, problems and unknown competitors.
The value of insight is early awareness, as it enables you to recognise and monitor the future as it unfolds, thereby reducing risk and minimising mistakes.
Today, managers are faced with many pressures — they may sometimes seek only short-term gains — but costly mistakes from managers making uninformed decisions are no longer an option.
Today, competing effectively is not just understanding existing competitors and the current business environment. It is strategically about having a picture of what the future business environment will look like and addressing the following questions:
- What business are you in today?
- How will new technology affect you and your customers?
- What new opportunities does the disruption open up?
- What capabilities do you need to realise these opportunities?
- What are you doing to protect your business performance when new and sometime unusual competitors are just now a click away?
- Are you aware of the external changes that are going to take place in your industry and how it will affect the business’s performance?
How your business prepares this future will provide you with either a strategic advantage — or the demise of your business. The most critical strategic issue for a business is its competitiveness.
Looking for a mentor in strategy and competition for you business or division? Give us a call (02) 9411 3900 or have a look at some of the projects we have worked on here.