As the 2018 Winter Olympics close in PyeongChang I am reminded of how positive good competition can be. I love the sentiment of this quote from Amy Purdy which is equally applicable to business as it is to snowboarding:
“…I've always looked at really strong competitors through a lens of gratitude rather than envy in the sense that the better my competition is, the more it forces me to work hard, focus, and be better myself if I want to succeed, which I do.”
This is an important orientation to competitive assessment which I reflect on during this and subsequent posts. In my last blog I introduced a 6D approach to competitive management based on experience working in this area within the Pharmaceutical and Biotech industry. I summarised some simple tips around step 1: Define. In today’s post, I will expand on step 2: Discover:
- DEFINE your competitive set
- DISCOVER insights about selected competitors
- DECODE their strategy
- DISTIL the implications for your own strategy
- DELIVER a competitive plan
- DASHBOARD to actively track competitor moves
DISCOVER insights about selected competitors
In a world of increasingly big data, you risk not being able to see the forest for the trees. I am consistently amazed at how much competitive information is gathered by organisations and then not used as people become overwhelmed. It is important to stay focused. The information, data, evidence and intelligence you gather should provide answers to the key intelligence questions around the key competitors you identified in your defined competitive situation. This is a targeted information-gathering exercise; you are looking to identify fresh clues about the competition, testing hypotheses and finding evidence.
Competitive intelligence is often gathered from multiple sources, including internal sources, market research, secondary searches and primary competitive intelligence. [It is important to point out that gathering competitive intelligence is not about breaking the law. Appropriate competitive intelligence is an ethical, regulated and legal business practice, as opposed to industrial espionage which is illegal].
Like a detective, consider where the most useful information may be before digging. Which sources could be the most helpful and which ones directly inform or answer the identified key intelligence questions?
TIP: Building data and evidence which helps answer key intelligence questions is critical but it can also be useful to gather intelligence around some priority areas. I find that it is vital, if you are really to get under the skin of the competition, to make sure you have at least developed an understanding of: The purpose and ambition of the company, their organisational views of the world, their current strategy, what they are good at (and not good at), their impact on the market and how they respond to competition.
The goal of this discovery process is to gather data in a systematic way, so it can later be used to decode competitors’ future strategies (next blog). Actually it is not enough to simply gather information, you need to identify competitive insights that allow you to predict their intentions and actions and thereby distil the implications for the market and for your own strategy.
"It is of the highest importance in the art of detection to be able to recognize, out of a number of facts, which are incidental and which vital". Sherlock Holmes
Competitive insights are more than just a stack of information or observations, they are a discovery; something you did not know or appreciate before and explain something deeper about the competitors’ needs and motivations [and possibly even customers’ needs, motivations and reactions to competitors too]. Importantly, solid insights should be actionable, inspiring fresh ideas for brand growth or providing options which will help you differentiate and stay ahead of the competition.
Identifying a competitive insight can come from a spark of inspiration, a simple comment or quote or by realising that a whole host of facts are pointing towards one key discovery. It comes from a continuous inquisitiveness and willingness to listen and learn. The principles are simple but finding insights is not always easy.
TIP: There are many tips and methodologies to help with insight gathering, the simplest and most effective being to act as a curious child asking a series of ‘why’ questions when information appears to point in a particular direction [sometimes referred to as the 5 Whys or the Why Cascade]. But actually the key is being open-minded. Don’t panic about finding ‘perfect insights’ because actually digging deeper and trying to find competitive insights will actually make you more insightful.
Remember our goal is to get under the competitor’s skin, to go beyond the obvious, and to develop an understanding of how they think, feel and act. To broadly understand the nature of the risk or opportunity. To understand changes to customers and market dynamics as whole, connected to the strategies that competitors could deploy and what it will take for you to win. This requires focus and open-minded discovery. No-one wants to incompletely estimate competition as this causes failure as famously demonstrated by Steve Ballmer CEO Microsoft in 2007 when talking about the iPhone “No business person will pay $500 for a phone without a keyboard”.
Next week I will provide some thoughts on decoding competitors’ strategy…