How competitor analysis makes you appear to be a mind reader?

How competitor analysis makes you appear to be a mind reader? Competitor benchmarking is an important aspect of competitor analysis for any company. It allows you to gain a deeper understanding of your competitors’ business. It helps monitor your performance compared to your leading competitors. Basic competitor research isn’t enough to keep tabs on your competitors’ every move. Usually, the competitor intelligence gathering method is short of one crucial aspect. That’s getting into the psyche of competitors. That’s why the entire arsenal of competitive intelligence is essential when researching competitors. Competitor analysis is just one tool of competitive intelligence. Get in their heads Companies grow according to the personality and mentality of those in charge. The objective of the company’s decision-makers usually aligns with the company’s aim. This is why we see that companies often seem inconsistent and sometimes bizarre with their strategies. So if you want to perform better in the market, you should be able to predict your competitor’s next move. And understand the reason behind their major decisions. For this, you should know the answers to these key questions: Who makes the company’s crucial decisions?rnWhat kind of information must we know about decision-makers?rnWhere can I get such information?rnWhat is Competitor benchmarking? Competitor benchmarking is the process of analyzing and comparing a company’s performance to that of its competitors. This can be done in terms of market share, financial performance, customer satisfaction, or any other metric. The goal is to identify areas where the company can improve its performance in order to better compete against its rivals.rnThis process can be repetitive as no two companies or decision-makers are the same. So, here is a breakdown of the process into simple steps: Step 1 Know the person behind significant company decisions and how much power they behold Know the company owners, senior leaders, and management team. The owners have the biggest influence over the company’s decisions. Dig deep into their background. While researching this, ask yourself these questions: Is the company public? If yes, who are the major shareholders scrutinising the company under pressure? Their opinions lead to more reactive strategies to maximise shareholder value. rnIs the business private equity owned? If yes, they may focus on short-term improvements, making them more attractive to buyers. rnIs the business family-owned? If yes, understand the family values and history that drive their business decisions. Frequently, these decisions are long-term and do not usually react to short-term pressures. rnLook to see which of the senior leaders were recruited by the owners. Factors such as their history, decision-making style, assumptions, and market values influence their strategies. What is Competitive Intelligence? Competitive Intelligence is the finding & critical analysis of information to make sense of what’s happening & why. Predict what’s going to happen & give the options to control the outcome. The insight to create more certainty & competitive advantage.rnIf the company is decentralised, look into the management teams. They can have more autonomy over the day-to-day decisions. Also, key objectives may change depending on their geographical location. Step2 Gather information regarding factors that drive these individuals Some factors contribute to gaining a deeper understanding of their leaders. Include their education & functional background, and reward structure. And their past failures, personality & decision-making style, and management assumptions. These factors contribute to how they visualise their business. If they have a marketing background, they may give importance to marketing. Their strategic directions are based on what they feel comfortable with. Compare this to leaders with a finance background. On the other hand, and without making sweeping statements, a qualified accountant running a company will prioritise good governance, profit and cost management. Remember to verify everything you are told, think and assume. Leaders often repeat the successful strategies they have made in the past. To find their decision-making habits and look into senior executive experiences. Speak to former staff and look for published KPIs. Look for strong indicators of their behaviour and decision-making. To understand the competitor, you must know who’s responsible for its strategies. And then how their leaders think. While this thinking will not solve every problem, it will help predict their next moves. It may give you an upper hand. How competitor analysis makes you appear to be a mind reader? In conclusion, companies grow according to the personality and mentality of those in charge. It is important to study them and understand their business strategies to benchmark against them. By getting in their head, you can gain a deeper understanding of their competition and make better business decisions. This article asked how competitor analysis makes you appear to be a mind reader. Words by: Swamini Kulkarni Take a look at our training partners for EMEA: Academy of Competitive Intelligencern