01 Jul About Competitive Intelligence
About Competitive Intelligence, another application of TPMG where there has to be a process to define what you need to know, why, and what you will do next – using this data, the analysis of competitive forces, and decisions to be made..
T = Think P = PLAN M= Make Decisions G = Go for it
Michael Porter of Harvard Business School focused attention on key elements of Competitive Intelligence. Porter’s Five Forces are used to determine how attractive a given Market or Industry is. Attractive correlates to Profitability. These Five Forces can be summarized at a high level in the schematic below.
Porter correctly focuses on products, offers and behavior of current and future competitors in a given market or market segment, on the bargaining power of suppliers (affecting availability of material to make products as well as the cost points) and on the bargaining power of customers, affecting price points, volume and potentially production leveling – ultimately on the profitability of the offer.
We have since learned how very important it is also to understand the competitive use of national, international, and local regulations and standards – and how they have been used in the past as well as now to address competition.
Some general questions for consideration and serious Thinking, discussion and agreement are the following:
- Who is your competition? Where are they?
- How important is the competition to your success – or lack of it?
- How dynamic is your market?
- Can you state your Business Strategy in a few sentences without reading it? What about your competition’s strategy?
- Do you have an invention strategy for new ideas/new products? What about your competition?
- What do you need to know?
- Why do you need to know? What decision (s) will you make?
- Why do you need to know this now?
- Do you understand your Value Chain? What part of the Value Chain is challenging to your revenue, volume, profitability targets?
- Do you understand Porter’s 5 Forces and use the concepts regularly? See above comments?
- Who owns the business decisions with respect to this, the deliverables, and the measurables?
- Do you have a Single Point of Accountability for tracking the competition? For responding to the competition?
- Who in the market do you believe? Who has a loud voice in the market but is not necessarily credible?
- What is the timeframe for tracking competitors and making decisions?
- How will you measure success?
Note. There are not any absolute answers to this set of questions but the business team has to be on the same page about assumptions, expectations, deliverables, decisions to be made. Otherwise, there is an excellent chance that the team will be disappointed in the results – and the person(s) carrying out the study and analysis will be frustrated.
N.B. It generally takes some time and effort to work through these questions and to generate a shared view and understanding. It is a critical exercise to setting expectations – and to setting the stage for success. Each person with a business decision to make – based on competitive behavior/actions – needs to participate actively. E-Mail is not a substitute for real-time understanding and agreement.
As I learned #3 day into a sales position at Union Carbide, Proper Prior Planning Prevents Pitifully Poor Performance. Without thinking and talking and understanding, it is almost impossible to plan effectively. It is critical to refresh this understanding regularly to be in step with market dynamics.
Reminder: careful analysis (Thinking) is what transforms data points, however robust & current, into actionable strategy & action – all based on ethical, moral and legal behavior.
A.C. Nielsen, July 2015 Let us know how we can help… – and let me know if there are any particular topics you would like to have addressed sooner rather than later at firstname.lastname@example.org