Competitors can be unpredictable. They launch new products, make acquisitions and divestitures, and deal with challenges and opportunities of their own. If you don't anticipate these changes, they can cause massive upheaval in your strategy. Conduct regular and rigorous competitive intelligence activities and maintain contingency plans to deal with possible competitive actions.
- Competitors are unpredictable. They launch new products, make acquisitions or divestitures and deal with their own challenges and opportunities sometimes with no warning. If you don't anticipate these changes, they can cause massive upheaval in your strategy. Conduct regular and rigorous competitive intelligence activities and maintain contingency plans to deal with competitive actions. I worked with one client that was caught completely by surprise when one of their competitors decided to sell their European business.
We got to work looking at merger scenarios. As part of that process, we thought through all the competitive ramifications. If we bought the business or if another competitor bought it. We had to think two or three steps down the road of our actions and what the reactions might be. That helped us come up with a better strategy for our client. What you might want to consider is reviewing your Porter's Five Forces analysis and your SWOT analysis to keep up with market shifts.
Consider building a competitive intelligence process or function in your organization to monitor market and competitor trends. One time I was responsible for our competitive intelligence function. I assigned members of my team individual competitors to keep track of and each team member had a specific market trend they had to watch out for. They would regularly read industry periodicals and news releases. They'd look at our competitor's earnings releases and pull it all together into a cordially report.
They'd let us know if they were seeing any trends that would lead us to conclude our competitor was up to something. One of the most rapid shifts you'll face is a competitive action. These actions can often occur with no warning. When that action happens, if you don't have warning, you're going to be caught flat footed. The likelihood of you not being ready for that is much higher if you're not regularly watching the market and paying attention to the signals your competitor might be sending.
A good, competitive intelligence function keeps you abreast of what's going on in the marketplace and enables you to put contingency plans in place so your strategy can be executed uninterrupted by competitive actions.
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- Identify common failure points in a strategic plan.
- Explain how to align compensation with strategy.
- List indicators of underfunding your strategy.
- Describe behavior that can harm strategy execution.
- Define strategic filters.
- Explain how to react to major shifts in your customer's market.
- Identify key metrics for assessing strategy.