One of the key challenges of leaders is to try and anticipate your competitor’s next move.
If you can, you are better prepared and you also might be able to preempt their move.
Many managers rely on a form of competitive analysis as part of an annual planning session.
Whist this is useful it has many shortcomings:
- It is reactive
- Static
- Often only considers the direct competitors (e.g. do watches compete with other brands or with mobile phones) and
- assumes that the competitors will continue to do what they have always done.
I believe a much better approach is what I call Competitive Insight.
This approach first asks the leadership or brand team to nominate and then plot the current and future competitors along with a direct and indirect ones in a 2 by 2 matrix.
The next step is have each group become one of the competitors in this matrix and ask them to:
- outline the next big move you are planning e.g. launch a new product, enter a new market etc.
- what your new advertising, communication and social media strategy will be and
- to actually create an ad.
Leaders are amazed how quick and insightful this process can ne.
In no time they have created ads, launched new products and most of all gained a fresh perspective on what the competition is likely to do.
I then end the session by asking each competitive group ‘what is the one thing that their (real) company might do that would really hurt their business?’
This is a killer question that often unlocks new growth opportunities.
Competition analysis should not be another form-filling exercise that fills up space in an annual plan.
It should be a living, dynamic process that is conducted at least quarterly.