How to Conduct Competitive Analysis to Protect Your Competitive Advantage

How to conduct Competitive Analysis to protect your Competitive AdvantagernDisruptors can seriously damage and, in some cases, kill your business. They do this by finding what makes you tick. And then attacking this critical aspect of your business. Your Competitive Advantage. This article suggests ways to tackle threats to your Competitive Advantage from disruptors. We ask how to conduct Competitive Analysis to protect your Competitive Advantage. Disruptors who can damage your business are those who can attack your Competitive Advantage. Your Competitive Advantage. Your core asset is also your greatest vulnerability. So, do you know your advantage in the market? You don’t need to track every new development and entrant. Only the ones that pose a threat to this Competitive Advantage. This article asks how to conduct Competitive Analysis to protect your Competitive Advantage. So that you can identify your competitive advantage and key threats and opportunities. Successful and consistentrnSuccessful and consistent business growth doesn’t happen by luck. It requires strategic planning. And not a few pages of text to keep the boss or the London office happy. It’s a lot more than a vision and mission statement. And strategic goals that no one is going to look at after the whiteboard has been put away. Strategic planning must tell you where you need to go. What direction you have to take to get there, and what you need to do along the way. Who is going to do what and determine what problems you could face along the path? As Lee Child’s fictional character Jack Reacher says, “Hope for the best and plan for the worst”. Then once you have got to where you want to do, how do you know you are where you want to be. And what to do if this or that happens. Beware not only to list your goals and then describe the usual competitors to analyse. Doing this is a recipe for disaster. You need to look for your industries current and future threats. The disruptors in the industry. As Apple put it a few years ago. Find those the crazy ones, misfits, rebels and troublemakers. Those round pegs in square holes. Those who see things differently. Your most significant riskrnWith this in mind, you need to know which disruptors will be the most significant risk. If you are looking for them, you will be in a better position to see them coming. So if you are looking for them, you will find them. Analysing the potential threats, you work out what you are going to do to protect your position. Or conduct your own surprise attack. Now, it’s essential to understand that you do not need to monitor every single possibility. You are not likely to have the time and budget to do so. By looking and analysing your market, you can decide 5 to 12 to keep a closer eye on. And try and be nearer the five than the 12. We recommend the pyramid. All your competitors are boxed on top of each other into the shape of a pyramid. Your most important competitors at the top and the others you need to keep a watching brief on the bottom. This forces you to define your competitors. Here’s a simple way of assessing competitive threats. 1. Decide what your real Competitive Advantage is?rnBefore you start looking at Competitors, you need to take a look at yourself. What are you good at? What do your customers think you are good at. Decide what your real Competitive Advantage is. Is the Competitive Advantage you have isolated what you thought it was? Is it your most significant advantage? Are there any more? Your Competitive Advantage has to be a closely guarded asset. It’s your Queen on the chessboard. The aircraft carrier in a group, and for our American cousins, the quarterback. It’s your greatest strength, but it could be your Achilles heel. Which disruptor competitors will want to attack your Competitive Advantage? How could disruptors remove your advantage overnight? If you can’t see any, you need to extend your analysis or find a better Competitive Advantage. Is it really a Competitive Advantage? Of course, your Competitive Advantage will change. Your new piece of kit was once a Competitive Advantage is now the minimum market entry. Think smartphones and touchscreens. Samsung and Apple could call this their Competitive Advantage. Now every smartphone has one. It’s taken as a given. Competitive Advantage is ever movingrnSo your Competitive Advantage never stays still, and it is always moving forward. Otherwise, you will end up like Blackberry. Great phones for their time, extremely loyal customer base. But Competitive Advantage was destroyed. Their Competitive Advantages were a real keyboard, secure comms and business email solution. We loved Blackberry (and we still have one or two knocking about), but they are now playing catch up in a race they can’t win. Even if they built the best smartphone in the world again, it would be a monumental shift even to scratch the surface of Apple and Samsung. Once you lose your Competitive Advantage, it’s hard to get it back. But remember, Blackberry did not lose its Competitive Advantage overnight. There would have been signs of disruption in the market years before they hit a brick wall. Once you know your current Competitive Advantage, don’t look at every single competitor. Focus on the ones who can hurt your Competitive Advantage. 2. Assessing the threats and opportunitiesrnSo you now have a better understanding of your Competitive Advantage. It’s now time to look at external opportunities and threats you could be facing right now and in the future. What is going to affect your business now and then? Now it can be hard to see those disruptors. Even harder if you are looking for them yourself. Why? Your cognitive biases and experience can blind you. Going back to smartphones. “Well, Apple just does personal computers dont they? They have never made mobiles before? And the ipod is just a music player”. Experiences and biases are compounded by rapid change. And industry and marketing noise, and ever more demanding customers. Disruption comes from trends. Trends analysis is another massive subject. But, no disruptor will appear without any notice. Megatrends are the big game-changers. But also the micro-trends, which can contain disruptors. Focusing on just the megatrends could mean you miss the microtrends. Now look at your trends and find the potential disruptors already out there. List the current and next trends that are going to shake up your market. And determine what signals a potential disruptor coming to the market. 3. Take action from your findings.rnOnce you have isolated potential disruptors, it is helpful to visualise or list them. Place each potential disruptor on the left-hand side of a columned list. In the second column, define each one in terms of the time of impact the following criteria.rnA. – Within 18months B. – 18 months to 5 years C. – 5 to 10 years Then describe why each one should be classified as a disruptor.rnIsolate any clear signals of change for each disrupt.rnWrite down what you are going to do about it.rnThis analysis will provide you with a measurable and consistent strategy. Flexible enough to cope with disruptors to your Competitive Advantage. ConclusionrnHow to conduct Competitive Analysis to protect your Competitive AdvantagernThis article suggested that disruptors can seriously damage and kill your business. By finding what makes you tick. They attack your Competitive Advantage. We asked how to conduct Competitive Analysis to protect your Competitive Advantage. We offered a three-stage process to help you understand what you are up against. We explained to look to yourself first to find out what your Competitive Advantage is. Then look for the disruptors in a consistent way. And finally, put a plan in place to tackle them. The disruptors who can badly damage your business. Those attacking your Competitive Advantage. Finally, a question. Do you know your Competitive Advantage?rnPhoto by Arthur Osipyan on Unsplash