Tag Archives: competitive edge

Power of Competitive Intelligence– Think Garbology With A Twist: A Critical Edge That Turns Trash Into Advantage…

What you don’t know can destroy your company– it’s a highly competitive world where knowledge is power… However, with some savvy planning and perfectly legal snooping– otherwise known as competitive intelligence– you can drive strategy, soothe your fears, and give your company a competitive edge...

Competitive intelligence (CI) is the action of ethically and legally gathering, analyzing, and communicating information about your total competitive environment– it’s a practice that is essential in modern business… it’s warning system that enables business to make important decisions with a higher-level of certainty…

According to Linda Klebe Trevino; sometimes competitive intelligence gets a bad rap when some people associate it with terms, such as; snoop, corporate spooks, spying, James Bond tactics… which implies illegality or at least questions legitimacy of the activity…

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Competitive intelligence in its truest form is an ethical and essential function that involves collecting and analyzing often public, but little-noticed information, with an objective of ‘connecting the dots’ and leading to a competitive advantage… and, when it’s effectively aligned with the strategy-setting, it can help companies decipher the early signs of opportunity or trouble before they become obvious to everyone else. It essentially means understanding and learning what is happening in the world around your business so you can be as competitive as possible. It means learning as much as possible– as soon as possible– about your industry, markets, competitors, or even your county’s particular zoning rules. In short, it empowers business to anticipate and face challenges head-on… In essence it turns many sources of raw data, and in some parlance, garbage and trash into a significant competitive advantage– think Garbology…

In the article Competitive Intelligence Focused on What Matters by Jim DeLoach writes: In a dynamic, complex and uncertain business landscape, effective competitive intelligence is needed to provide early warning… competitive intelligence should be comprehensive in scope, integrating the intelligence gained from the analysis of multiple sources of data and information with the objective of identifying insights and trends that can make a difference in exploiting opportunities, identifying emerging risks…

In effect, a competitive intelligence function is the business’– ‘eyes and ears’ in a rapidly changing world… it’s a ‘early warning’ system that is critical in identifying ‘vital signs’ in an ever-changing environment… However, failure to make the fundamental connectivity with the enterprise’s underlying strategic assumptions leaves competitive intelligence as a tactical, ad hoc, strategically irrelevant process… If the intelligence function is not driven by factors relevant to the critical assumptions underlying the strategy, then the organization is at risk because the intelligence gathered does not convey the full picture…

In the article Importance of Competitive Intelligence by Tony Corrigan writes: Know your ‘enemy’: According to Sun Tzu; to know your enemy you must become your enemy… Sometimes competing for business can seem like a battle, where the odds are stacked against you and the odds of success are insurmountable… All is not lost however; competitive intelligence is a key weapon in leveling the battle field and allowing you to compete with the advantage of knowledge on your side…

Competitive intelligence is the ethical gathering and analysis of– competitor, customer, market… information from multiple sources… and, used by organizations to make better strategic decisions. It’s the difference between competing and winning… Your organization survival depends on the knowledge that you acquire from and about your– customers, markets, competitors… It’s not an overstatement to say– embedding competitive intelligence as core management process is increasingly essential for survival and growth in the 21st century… As Sun Tzu noted: opportunities multiply as they are seized…

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In the article Right Kind of Competitive Intelligence by Leonard Fuld writes: Competitive intelligence isn’t magic, it’s legal, it’s about gathering honest and hard-won information and analyzing it so that business can make sound decisions. Many companies mistakenly believe they can find all the information they need by just uses Internet search engines, but using the Internet is only scratching the surface… Unique business insight comes from blending, analyzing information from many sources, such as; street knowledge, market savvy, customer data… Here are a few rules for harnessing intelligence:

  • Rule 1: Marshall your company’s competitive knowledge: Created a war room and assemble a team drawn from across the organization, including; sales, marketing, engineering, manufacturing… collect all available information and use the war room’s walls as a strategic planning board pinning all available information, e.g.; product offerings, advertising, packaging, pricing, customers, distribution, market trends, innovations, government regulations… Hence, the team becomes fully aware and immersed in the competitive intelligence process, and the objective is to devise business initiatives that engages this competitive environment…
  • Rule 2: Build information filters to reduce competitive distraction: Monitor the critical signals in your competitive environment… This means devise a simple early-warning system based on series of weighted information filters, and monitor signals that tracks key competitive activities… When any of these signals is triggered, then the potential threat or opportunity needs to be examined for potential action…
  • Rule 3: Stress test your strategy to identify future threats: It’s one thing to develop a strategy and another to demonstrate its resiliency when faced with unimagined business  threats or opportunities. Stress testing is another way to scope out the potential competitive landscape– place your strategy in a type of pressure cooker, such as; a war game… to demonstrate or stress test your strategy’s resiliency…

In the article Protect Your Business From Competitive Intelligence by Michael C. Zahrt writes: Many large companies hire strategic intelligence experts, and these experts specialize in– discovering, uncovering… wide range of relevant information that can impact a company’s competitive position… The good news is that small and medium-sized business are not usually the targets of professional competitive intelligence experts.

However, business would be wise to protect itself from intelligence gathering by its competitors… Competitive intelligence gathering begins by identifying the strategy of a business and key issues affecting its competitiveness… One competitive intelligence expert suggests four steps business can take to protect themselves:

First, improve workplace culture to lower the possibility that workers feel mistreated… Those who feel mistreated are more likely to divulge sensitive information to competitors. Non-disclosure clauses in the employment agreements of all employees with sensitive information are also helpful, but can be hard to enforce. Second, business should be wary about being contacted by anonymous communications, i.e., phone calls, emails…

it’s common for competitors to make up a fake identity in hopes of gathering information… Third, business should ensure that their website is secure and not a source of sensitive information… Finally, remind your employees to be careful about what they post on social media. Employees may be disclosing more than they should on their profiles, and it’s easy for a competitor to find this information quickly…

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Every operation needs an effective network of informants, e.g.; every employee is a sensor, every employee is an intelligence resource… Encourage staff members to gather competitive information as they interact with people outside the company, e.g.; sales people talk to customers, who talk to competitors… human resources staff members interview job candidates, who work or may have worked for rival firms… purchasers talk to suppliers, who know who is demanding what and when it’s needed…

Get the whole company involved: Find out where employees used to work, what kind of data they use to do their job, whom they work with outside the company… It’s possible they have easy access to the kind of information you are looking for or have a relationship with people who do… profile the competitor’s top executives– examine the decisions they made to determine how decisive or methodical they are… Each independent information source can help complete a larger picture…

According to Burt Helm; sharp focus is essential to any successful intelligence-gathering effort, e.g.; don’t just say; ‘find out everything you can about all the competitors in the marketplace’… It’s far more productive to think of a specific question or problem that is crucial to your company’s success. The goal of your intelligence operation is to gather information to help address issues that really matter; remember– stable, predictable markets are relics of the past… According Gino Imperato; business moves fast– product cycles are measured in months, not years… partners become rivals quicker than you can say ‘breach of contract’… That’s why competitive intelligence is so important…

Forget the occasional racy headlines about industrial espionage and take new approach– think global, snoop local… become heads-up on a new innovations, know rival’s cost structure, understand changing business modes, track people’s talent… This kind of information gets exchanged all the time, e.g.; engineers swap gossip at trade shows; rival salespeople compare notes at a restaurant, Internet offers a remarkably wide variety of sources– news services, online job postings, brutally honest discussion groups… The information is out-there– all you need is an effective competitive intelligence process to activate it…

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According to Maryam Donnelly; competitive intelligence is one of the most powerful yet under-utilized sources of knowledge at most organizations– the key issue is with how companies store, access, analyze competitive information. They typically keep it in individual silos throughout the company, with no consolidation, no chance at analyzing the scattered data for broader organizational use… This lack of consolidation and analysis leaves many companies at a disadvantage…

The truth of the matter is competitive intelligence, in many businesses, takes a back seat to things like– impulsive, ill-informed decision-making… Where as through use of competitive intelligence, company could get a more accurate view of where the business is, within the context of the overall competitive landscape– its position now, its trend, its future potential… and more important, it provides much relevancy for better, informed decision-making…

A Garner Research paper suggested– that many of the world’s top global companies have serious issues making good decisions due to a combination of changing markets, lack of information…

Strategic Assets– Rethink Your Competitive Edge in Shifting Global Markets: Strategic Muscle Ain’t What It Used To Be…

Strategic Assets are specific core resources, capabilities… that an organization possesses, which provides it with a significant and unique competitive edge that sustains it as growing, prosperous organization… In financial accounting, an asset is an economic resource; anything tangible or intangible that is capable of being owned or controlled to produce value. 

Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset)… Under this definition, such things as; employees, customers, brands, supply chain… are not considered assets, even though they may be the critical factors in the economic success of an organization– This is because an organization does not have sufficient control over these entities to satisfy the accepted definition of an asset…

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But according to Paul O’Malley; strategic assets are key capabilities, resources, relationships… which are the basic ingredients for value creation and key driving factors in the success of a business… Examples of strategic assets might include; employees, customers, intellectual property, brands, distribution channels… According to John Kay; strategic assets are certain competitive advantages based not only on the distinctive capabilities of a business but on also on their dominance or market position

However, in today’s highly competitive business environment many so-called strategic assets may not be sustainable and eventually they become competitive liabilities rather than assets… So, have you reviewed the basic assumptions behind your strategic assets, lately… are they still valid, or are your strategic assets more of a liability?

Strategy- Strategic Fundamentals: The use of the term strategy or strategic has literally changed the map of the world and caused the rise and fall of many businesses, organizations, nations… The unique combination of wisdom, science and craft have made strategic value creation a universally sought after skill…

The basic premise of a strategy is that its development requires the courage to accept uncertainty… According to a French general; strategy is the art of conducting war not by means of coup d’oeil (glance or look) from behind a horse’s ears, but in an office on a map… Strategists must accept that they will not have all of the information and not see the spectrum of events, yet they must be committed to creating and implementing a strategy…

The uncertainty that may exist is not only a result of not having complete information and not being able to predict future events, it also is a result of the events generated by a dynamic and thinking competitor. The design of strategy with competitors in mind and their undetermined actions is what requires a strategist’s embrace of uncertainty… Strategy deals with competitive situation in an uncontrolled environment…

Strategy is the greatest ‘winning tool’ that man ever invented! It enables the practitioners to see clearly the future of any encounter before it’s undertaken,,, Strategy is ‘the thinking of the General’ and has been the secret art of success for thousands of years… According to Sun Tzu; all men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved... Business history is littered with examples of leaders who could not accept the uncertainty of strategy, and defining unsustainable ‘strategic assets’ and wounding-up settling for failure at the hands of competitive tactics…

In the article Competing on Resources by David J. Collis and Cynthia A. Montgomery writes: Competitive edge are the things that enable an enterprise to perform activities better or more cheaply than their rivals, e.g.; physical assets, prime locations, intangible assets, strong brand, technology capabilities, brilliant supply chain, outstanding employees…

As recently as 10 years ago, we thought we knew most of what we needed to know about competitive strategies, but the pace of global competition and technological change has left many businesses struggling to keep up… One business framework that is grounded in economics is ‘resource-based view’ or strategic asset view of a business…

This approach derives its strength from its ability to explain in clear managerial terms why some competitors are more profitable than others, how to put the idea of core competence into practice, and how to develop diversification strategies that make sense… it sees companies as having a very different collection of tangible and intangible assets and capabilities…

No two companies are alike because no two companies have the same set of experiences, or acquired the same assets and skills, or built the same organizational cultures… These assets-capabilities determine how efficiently and effectively a company performs its functional activities: Following this logic, a company is positioned to succeed if it has the best and most appropriate stocks of competitive relevant resources for its business…

These capabilities, built up over time, transform otherwise pedestrian or commodity inputs into superior products and make the companies that develop them more competitive in global markets… Competitive advantage, whatever its source, ultimately is attributed to the ownership of valuable resources (both tangible and intangible) that enables the business to perform activities better, more cheaply, different from competitors… Superior business performance is, therefore, based on competitively distinct set of resources (i.e., strategic assets), which are deployed within a well-conceived strategy…

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In the article Most Important Assets are Not on the Balance Sheet by Leslie Back  writes: In context of accounting, assets are defined as items of economic value, especially those that can be converted to cash, such as; property, equipment, inventory, and the like… Also, intangibles, such as; patents, trademarks, goodwill… are quantified for balance sheets…

These assets, as well as liabilities and retained earnings on the other side of the sheet, dominate corporate thought and action. In so doing, however, companies overlook their most important assets, its ‘employees’. The employee is the secret in the sauce and glue that holds organizations together– without ‘right’ employees, other assets are valueless… and, followed by a good business ‘reputation’ as the next most important asset…

Fortune Magazine has estimated that a company’s reputation represents 75% of the total value of an average business… Which brings us to the last non-financial asset; ‘corporate mission’… This asset, when appropriately applied, will protect all other assets. The ‘mission’ provides guidance: It gives employees a sense of purpose, it guides all decision-making, it the moral and ethical compass and written articulation of the organization’s soul…

When a ‘mission’ is clearly defined it gives direction on what assets should be acquired and where to divest… Hence, when an organization has a ‘mission’ beyond the mere of money-making, and when it considers its ’employees’ as its greatest investment, and when it secures its ‘reputation’ by doing what is right… then these, by definition, are strategic assets…

According to Cliff Bowman; companies are continually under pressure to make the most of their assets… In today’s highly competitive world, it’s essential to understand what ‘thing’ is giving your organization a competitive advantage or edge in the market place: What is it about your product or service that is valued by your customers, such that they buy it? What is your competitive edge– your strategic asset– your differentiator that separates you from the competition… You must identify those dimensions that are critical to your customers, and why they choose you over a rival…

Pinpointing the best way to deliver value to the customers is a strategic asset… Understanding your special qualities requires you to delve deep inside your organization to uncover the sources of advantage, many of which may not be obvious, but they are your organization’s competitive muscle and the key to your business success…

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However, in today’s global business landscape strategic assets can quickly become obsolete assets– basic assumptions about your competitive position and presumed strategic assets might not be valid… According to nine out of 10 executives; their companies developed annual strategic plans where they define their mission, competitive edge–strategic assets… Moreover, they develop these plans without consideration for the pace of change in their business environment…

As market pressures drive organizations to become more– flexible, responsive, able to change on a moment’s notice, the ability to rethink the execution of strategy based on new competitive assumptions is rapidly becoming more important than the strategy itself… According to Denise Lee Yohn; the amount of disruption in today’s markets (and the speed at which it happens) requires a very different planning approach. Instead of setting a definite strategy and following through at all costs, companies must focus on– strategically adapting to and excelling at whatever path they find themselves on…

Organizations must focus more on having the right people and less on the right plan, replace strategic planning with strategic decision-making, and nourish a culture of discipline, action, and results… Developing strategic agility starts with changing many of your ‘thought bubbles’ (i.e., beliefs, assumptions, rules) about your competitive edge–strategic assets and strategic planning process..

Accept the idea that many– ideas, beliefs, assumptions on which you based your plans may well be obsolete… Shift your thinking about competitive edge and focus on market realities, which means that you must automatically assume that markets are constantly changing… focus on what needs to shift in the organization, and how you can adapt to get to where you want to go.

Once you determine the necessary course corrections, take action immediately… It’s hard making-decisions without certainty about what the future holds, but the world moves so fast that hesitation can be fatal… And, once you fall behind, it can be very difficult to catch up… Make the development of strategic agility a strategic asset and priority for the organization…