Are you faced with any of these strategic challenges?

ANTICIPATION: Are you entering a new market with established competition or anticipating new competitors in your market and need to develop strategies and counterstrategies to drive success?

DISRUPTION: Are you feeling ill-prepared for changes in the future; converging trends, new competitors, advancing technology, collaborations impacting and shaking up your market?

EXPECTATION: Do you have a high value asset which is critical to future success and is under pressure from new or emerging customer or competitive changes?

IDEATION: Do you need a platform for creating new strategic options, ideas or contingencies e.g. entering a new therapy area, identifying partnership options?

INNOVATION: Are you launching a new brand or innovation into a new market or new therapy area or indication and need a robust platform for early strategy and scientific platform development?

If yes, then a competitive simulation may be a priority and it could be useful to read on.

In my first blog I introduced a 6D approach to competitive management based on experience working in this area within the Pharmaceutical and Biotech industry and summarised some simple tips around defining your competitive set. Last week we reviewed the importance of business focus in our discovery process, with a focus on deriving competitive insights.

In today’s post, I will expand on step 3: Decode. Firstly, a reminder of the 6Ds:

  1. DEFINE your competitive set
  2. DISCOVER insights about selected competitors
  3. DECODE their strategy
  4. DISTIL the implications for your own strategy
  5. DELIVER a competitive plan
  6. DASHBOARD to actively track competitor moves

DECODE your competitors strategy  

Having defined our competitive set and gathered a focused set of competitive insights we now need to interact with our findings, to play them out and to understand what it all means. 

As described previously our aim is to now get as deeply underneath our competitor's skin as possible; to move beyond the obvious and build an appreciation of how they think, feel and act. One of the best, and most interactive, ways of decoding strategy is through simulation; at Cello Health we use something called The Competitoroom as part of our scenario learning offering.

Competitor simulations provide an ethical and strategic test-bed for decoding the strategies that competitors could deploy and ultimately what it will take for you to win.  This approach advocates using interactive competitor analysis techniques and targeted competitive intelligence in a realistic real world setting to generate an in-depth profile of competitors through role playing.

We have been running Competitoroom for more than 20 years and although there are core ingredients, each one needs to be tailored to the individual strategic challenge. Essentially they all involve some level of playing out different market and/or competitive scenarios whilst understanding the dynamic between different competitors. They all build on the insight that has been gathered and on internal knowledge and perspectives of the market and the competitors. In every simulation we run, we also push teams to develop a detailed strategy from their competitor’s perspective. 

Some considerations when commissioning or designing a competitor simulation include: The number of competitors you wish to explore, the number of different competitive or market scenarios you want to consider, the level of emphasis you place on learning about competition vs. distilling the implications for your own strategy, amount of time you have available and number of delegates you wish to involve.  

TIP Competitor simulations can be over-engineered. Consider a more qualitative simulation which enables greater buy-in and alignment as the whole cross-functional team go on the journey together. This ‘business is business’ approach also places more emphasis on rooting yourself in emotional and cultural factors when decoding competitors’ strategy. Finally, by playing out various scenarios and role playing interaction between competitors’ actions and reactions enables a richer understanding of the consequences and what it will really take to win. Ultimately this approach leads to defining/ enhancing your own strategy, which will be the topic of next week’s blog. 

In last week’s blog we discussed the importance of gathering insights around: 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. This is also a great structure for role-play and building hypotheses around competitors’ strategies and counterstrategies.

Unpicking a company’s core purpose and ambition is critical, and is often overlooked. Different organisations are wired differently and this is often expressed through their vision, values, beliefs and priorities. These all influence their strategy. This also has a significant impact on what strategy may work best for you too. E.g. can you peacefully co-exist, and do you want to? If not, what are the consequences? If your competitor has a product which is strategically and emotionally important to them, tackling them head-on will elicit a significant response which you will need to be prepare for. Other questions such as ‘what is driving their financial goals?’ can help you anticipate whether they are out to drive market growth or focused on share or profits. Identifying their core values and what pressures they are under can help identify ‘hot buttons’ where they may feel threatened or blind spots where you could go unnoticed or comfortably co-exist. Exploring their attitude to risk will help inform how they may react to competition.

It is also worth exploring their organisational view of the world. How do they understand the marketplace? How do they see themselves, where they are strong and possibly weak? If they have a particular view of the way the market works, then you may be able to work out a strategy where you don’t need to take them on head-on, or perhaps they won’t see you coming! Consider how your competitors talk about the market, how do they approach customers? What trends do they focus on? What do they communicate about themselves, about the opportunities and where are they investing energy and its resources? Remember this is about getting underneath the competitor’s skin, building a strategy from their perspective. The more you consider the way they see things, the better.

Building a view about a competitor’s current strategy is critical in decoding their future strategy and is also a pivotal part of the simulation process. Good business executives are usually pretty good at understanding the core components of a direct competitor’s strategy although often need to be challenged and/or supported to consider the wider organisational context discussed earlier e.g. company portfolio, culture and priorities. There is often significant evidence pointing to a company or brand strategy e.g. chief executives like to tell people about how successful their strategy is, what they are doing, and how they are approaching it. We also find clues in marketing materials, on websites and on social media. Within our simulations we often see real ah-ha moments when we ask teams to role play the CEO, Marketing Director or Medical Director of a competitor company.

Understanding what your competitors are good at and not so good it is a really important reality check. We have found that teams are much more honest, and sometimes brutal, about their own capabilities having gone through the process of competitor simulation. Consider strengths and weakness at both a product and company capability level e.g. company-wide capabilities, therapy areas of focus, product-based strengths, functional capabilities, clinical trial programmes, financial position through to tactical strengths. This will help you understand how capable a company is at achieving its stated ambition and potential areas of danger or opportunity e.g. it is useful to anticipate the risks of going head to head with a company with a strong and proactive legal team who will tackle anyone willing to challenge their patent or position in the marketplace

Finally, understanding how a company reacts to competition, how they have responded to threat historically in this market or in other markets is vital in decoding their actions and reactions. Most competitor simulations involve some interaction and interplay between competitors which can be hugely insightful as different attitudes to risk or business values play out.

TIP: Decoding competitor strategy via qualitative simulation requires business focus, good process, clear structure, strategic challenge and energetic facilitation. This is a key part of the competitive management process and requires significant and specialist experience and expertise. If you would like to learn more about our Competitoroom approach click here

Next week I will provide some thoughts on the most critical component of the 6D process; distilling what this all means for you and your strategy…