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Knowing the Competition – a Different Approach
August 6, 2010
Written By: Pete Petersen

I’m in the process of reading a book called Strategic Intent co-authored by Gary Hamel, one of the leading business management experts in the world. Hamel always focuses on competing in the marketplace and this time outlines part of his approach to strategic planning. The book is not a particularly easy read but there are a number of excellent insights to consider. 

One of the areas he touches on is analyzing competitors. We all try to do this with varying degrees of success. Hamel maintains that US companies do a very poor job of anticipating competitor moves because they only analyze their competitors at a given point in time. They look at a competitor’s current financial resources, current results (if they are available) and current strategies to determine the competitor’s direction for the future and if they will be a problem regarding pricing or market share in the next year. He likens this to taking a snapshot of a moving car … it doesn’t tell you much about the car’s direction or speed. The car could be going on a slow trip to grandma’s house, a fast drive on the Autobahn or headed for a crash.
 
Knowing more about where the competition is headed is the key. A better way to look at competitors is to study their obsession with winning at all levels of the organization including their focus, resourcefulness, ability to change and the strength of their competitive advantages. This isn’t easy but it sure beats the snapshot method. If you truly know more about competitors you can better position your business’s pricing, quality, marketing, service, sales and more. The less you know the more time you spend reacting to competitor moves, responding to new aggressive players in the market and playing catch up versus offense.   

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