Getting into your competitor's head...

by Mary Beth Matteo, Founding Director of the S. Dale High Center

Why is “getting into your competitor’s head” so difficult? When your competition is similar to you, it’s relatively simple—you just put yourself in his shoes. Not so easy when your competitor is very different: called an asymmetric competition. A recent survey of business executives showed that understanding competitors rarely influenced the introduction of a new product, or its pricing. How unfortunate!

Why bother with this kind of analysis? If your company spends a couple days a year doing strategic planning, it’s worth devoting several hours of that time to “get inside your competitor’s head.” It helps you anticipate your competitor’s next moves and design “what if?” scenarios. Interpreting the “soft signals” can give you a real edge. There are two areas to look at:

(1) understanding the organization (its assets, resources, market share, etc.)

(2) understanding the decision makers. (This second is quite tricky and often neglected.)

Two companies with the same resources, assets, and market position may create very different strategies because of the key decision makers. A good example is the competition between McDonald’s and Burger King. McDonald’s (in part because of litigation) has chosen a path of “more healthy” fare. Burger King, on the other hand, is selling comfort food with an “in-your-face” and politically incorrect marketing campaign.

When looking at decision makers, here’s a check list:

• The Owners/Shareholders: who are they? What is their mission? What are their attitudes toward risk, investment, profits etc.?
• Senior management: who are they? Do they necessarily express the commitments of the owners? Or, do they bring their own agenda? What might that be?
• Frontline employees: who else might play a strong role in key decisions? What are their biases and hot buttons?

Doing intelligence on your competitor’s decision makers requires informed and imaginative guesswork. It’s never as quantifiable or simple as market data. But it will give you a clearer view of the complex and shifting playing field.

Forbes' excellent article on the topic is available here.

 Sum & Substance: When talking about your own competitive strategy, don't forget to consider your competitors' strategy. Whether we like it or not, interdependence characterizes today's business world.