Analyse strategies! Move forward by competitive awareness

It amazes me how disorganised some companies are, yet they still manage to keep their head above water. Those that engage with a mentor, business coach or similar then gain clarity of direction and whatever the set benchmark, production, sales and profits improve exponentially.

Fighting the internal battle is only the first step. Next you have to worry about what the competitors are up to, especially the ones that have the edge on you! Who knows, they may well use a strategy tool created by Michael Porter known as ‘Porter’s Four Corner Model’.

A leading authority on company strategy, Michael Porter is the Bishop William Lawrence University Professor at Harvard Business School (the highest professional recognition that can be awarded to a Harvard faculty member). His model is a framework to look at what’s going on behind competitor’s doors, the strategy they are likely to adopt and key factors that will probably influence their decision making:

To begin, consider a 2x2 matrix.

Top left is ‘Corner 1: Drivers’ (motivation), bottom left ‘Corner 2: Assumptions’ (motivation). Bottom right ‘Corner 3: Strategy’ (actions) and top right ‘Corner 4: Capabilities’ (actions).

Drivers: These are what motivate your competition. Areas such as what drives them forward? What are their values? And really, what makes them tick? Understand what motivates them and you can start to see where the energy lies, including financial goals, business philosophy or leadership background.

Assumptions: This isn’t your assumptions, this is their belief about themselves! Look at how they perceive their competition (including you). What assumptions do they make and how do they perceive themselves compared to others within your business area? How do they assess their own strengths and weaknesses against their rivals? Do they become defensive or aggressive in their approach, are they pro-active or reactive? Consider company’s perception of its strengths and weaknesses, belief about competitor’s goals or organisational value.

Strategy: This is all about how they compete in the marketplace! There could be a difference between what is their realised strategy and the intended one as laid down in their annual reports. Now this is where it’s important to see if this occurs and with some research, can be found. If their strategy appears to be yielding a good return, then it is safe to say they will continue doing what they do best. Nonetheless, is it still abiding by its intended strategy and could further improvements be met? Look at how they create value, established relationships or where investment is made.

Capabilities: Here you assess how the competition acts! It may well have the motivation anddrive to initiate a strategic plan, but the question is are they capable of seeing it through? How will they react when your market share or another group’s start to grow? Will they simply start to slash prices or do they take a different approach of aggressive marketing campaigns? Taking from the SWOT analogy, what are their strengths and weaknesses? Look at training, financial strengths, marketing skills and Leadership qualities of senior management.

With this information set in your armoury, you can now analyse this framework to plot both the ‘offensive’ and ‘defensive’ scenarios of your competition. Carry out the same exercise internally and see the areas of difference emerge, then formulate a plan based on actual data rather than guess work!

So although this is porimarily used within the business context: it can also be used to assess others should you be applying for an internal job at work, or socially with sport if competing etc. The message is really based around knowing what drives others, the assumptions that they may make and by taking an outward view, you can look at people in prominant standing. Whether they be in business or media, look at this to develop your own skill sets.

However you use this tool, it's a great way to consider another's view on the same or similar subject and for you to create your own plans based on knowledge gained rather than a gut feeling.