John D. Rockefeller, American business magnate, once said, “Next to knowing all about your own business, the best thing to know is all about the other fellow’s business.”
How would you know about the other fellow’s business? In today’s business jargon, you ‘decode’ your competitors. ‘Decoding competitors’ means becoming totally familiar with your rivals’ way of thinking, including their value systems and style of management. Also, you want to understand how they operate, which means an awareness of the types of strategies they pursue, e.g., passive or aggressive.
The essential point is that you want to acquire enough on-going business intelligence, which can spell the difference between success and failure in creating opportunities. Consequently, given the scope of information required to develop opportunities and strategies, it’s up to you to look at a competitor with a 360-degree view. Using a circular approach will open your eyes to a changing marketplace of evolving technologies, environmental trends, and shifting buying patterns among your customers.
Also, in this panoramic scene, you will be guided with information and insight that can impact your decisions about selecting markets, launching new products and services, and devising winning strategies.
That is why your sales reps should be a starting point for gathering, examining, and acting on business intelligence at the field level, which includes giving special attention to competitors’ current and likely moves.
Doing so will provide first-hand, on-the-ground data about competitive behaviour under a variety of market conditions. Such information permits you to get a closer look at competitors’ natural cultural patterns; it’s all part of the decoding process.
What to look for
Whether or not you have funds to conduct formal market research, you should still get actively involved in doing your own grassroots, hands-on competitive intelligence. You will then be more informed and better prepared to move quickly when presented with an opportunity. Here’s what to look for:
(1) Observe changes in the character of your markets. Define your customers by demographic and behavioural characteristics. For instance, look for unmet customer needs that would enable you to respond rapidly in the form of products, services, methods of delivery, credit terms, or technical assistance.
(2) Maintain an on-going dialogue with your customers to find out their most troublesome problems and frustrations. Meet salespeople, travel with them, if possible. Draw them out about what they see happening in their respective sales territories. Gain from their insights. It makes you and them more focused and able to react.
(3) Watch for competitors’ alternative and substitute products that could replace your products or services. Examine customer usage patterns. Also observe deviations in regional and seasonal buying patterns. Check for changes from past purchase and usage practices that could translate into opportunities.
(4) Observe originality in selling, especially with the pervasive use of the Internet. Tune-in to current trends in promotional allowances, selling tactics, trade discounts, rebates, point-of-purchase opportunities, or seasonal/holiday requirements. Here, again, stay close to salespeople for such information.
The cultural signature of the competitor is a contributing factor in deciding, for instance, when you should enter a new market segment — if at all. In particular, decoding the cultural character of your rival is a vital factor when confronting a larger and more formidable competitor. It directly impacts which market you select, how and when to confront your competitor, and what considerations you give to the changing dynamics of markets.
Therefore, combining customers’ needs and a competitor’s profile into your conscious thinking represents the core ingredients for formulating your business strategy. You thereby are in an optimum position to create opportunities. Consequently, it is your mandate to familiarize yourself with the inner workings of both your organisation and that of your primary competitor.
Think about one of your more serious clashes
with a competitor.
At what point before, during, or after the encounter could you answer any of the following questions with a fair degree of accuracy?
About the competitive problem:
When and how did you receive the first signal about your competitor’s aggressive moves?
At what point did you fully grasp the seriousness of what the competitor could possibly do to your market position? Who noticed the first signs of a problem: an experienced executive, a sales rep, or a novice manager? Looking back, how accurate was the assessment? How confident were you of its reliability? Did you consider the assessment useful enough to commit company resources?
About your competitor’s performance:
If your competitor’s strategy failed, at what point in the unfolding action did you begin to see his efforts come apart? Did the competitor leave the market, mount an all-new effort, or retreat to his starting position? What were the tell-tale signs of weakness that caused the competitor’s poor performance? Did the strategy fail because of insufficient financial or physical resources, lack of trained and experienced personnel, weak leadership, or faulty implementation?
About your company’s performance:
If the competitor was successful, at what point did your own situation unravel? Did the competitor catch you by surprise? What specifically was the nature of the competitor’s strategy that caused your failed performance? Was it a case of insufficient reserves, manpower, budget, or back-up support? Or did you wait too long to react?
On the other hand, if your efforts were successful, did you do an after-action report to determine how you succeeded, in what timeframe, under what conditions?
When exactly was the turning point that assured your success? Was there an instance where events could have gone awry because of insufficient intelligence? How did your personnel hold up during the action? What lessons did you learn about your staff, your strategies, and the reliability of your competitive intelligence from the unfolding events?
The point of these questions: When immersed in a tough competitive encounter, you may not be fully acquainted with the overall strategies and short-term actions of your competitor. Or, for that matter, you may not be totally clear about your own strengths and vulnerabilities. Such doubts could include the capabilities of your personnel to perform tinder adverse condition.
Prepare the best possible
And that’s not surprising. Trying to predict the performance of individuals at a particular time and during a special experience is loaded with uncertainties. Individuals blinded with fear and apprehension hinder calm and factual assessments, which often fill reports with inaccuracies.
Also, people tend to believe evil rather than good. Consequently, what you get is feedback tainted with bad news and false dangers.
Even with what you believe is reliable intelligence, the moment you begin carrying out your plans, a thousand doubts may arise about the dangers and pitfalls that could develop.
Invariably, the situation affects you, too. Gnawing misgivings can creep into your mind about being seriously mistaken in your estimates of the situation. Such feelings of uneasiness often take hold. And from uneasiness to indecision are small, scarcely
All those issues can weigh heavily on your mind and leave a misleading impression of your rival’s intentions and capabilities. From that mind-set arises a new source of indecision.
In spite of those complexities, you cannot take uncertainty as a reason for indecision, or as a rationale to forego action. Your best bet: Prepare as best you can by elevating competitive intelligence to the highest level. Make it an embedded part of your strategy development and its implementation.
(Lionel Wijesiri, a corporate director with over 25 years’ senior managerial experience, can be contacted at [email protected])