Your competitor’s toolkit is their capabilities – strengths, weaknesses, and their assumptions. In a later chapter, we go deep into how to gather competitive intelligence (CI) on their capabilities, but, for the purpose of this chapter, we’ll talk about whether you should even count them among your key players:
What does the competition think about the market?
What do they think about themselves?
And most importantly, what do they think about your company?
One of the questions I ask companies in war games is: Do you care about your competition? And even more importantly: Do they care about you? I’ve seen some painful revelations after a few rounds of games with teams representing the competition, where the leadership realises, “We thought we were the centre of the universe in this industry, but these other teams representing our competition didn’t even register us as a threat. They were going after other things and their focus was somewhere else.” If the competition’s not even registering your existence, a war game will help you determine why.
You might be a smaller newcomer to the industry. A C-suite executive for an oil company was referring to his competition when he asked me, “How can a secondhand Chevrolet tell a Maserati what to do?”
Famous last words.
The best strategy for any battle is to respect your competition, even if they’re small because winning isn’t about having the most resources; it’s about resourcefulness. You can’t always win a war by waging a full-on battle, especially when your opponent is waging guerilla warfare. And with the advent of digital marketplaces, templatized marketing strategies, and automated software, suddenly the little guy isn’t so little anymore.
Uncover new competitors and outside forces
Take a look at Zoom versus American Airlines. I don’t think American Airlines would have ever counted Zoom among their competition, but as a result of COVID-19, people realised that if the end goal is to have an effective business meeting, they might not need to get an aeroplane to be face-to-face if they can jump on a Zoom call.
Timelines and regulatory changes can also be emerging players in your battle. Look at California. If the largest state in the US is making zero-emission vehicles (electric) mandatory by 2035, then how will Toyota and other car manufacturers make sure a large customer base can charge their cars when the infrastructure and resources won’t be there?
Timelines could also be dates. If your competition announces they’re going to launch product X in three years, look out.
It could be other sorts of upcoming milestones in the industry, such as changing industry standards, new technology coming to market, new research, and data (especially for the healthcare industry).
The lines of industry are blurring, and you must think about who you’re really competing with to understand the key players: traditional and nontraditional alike.
You might not know offhand which competitors are emerging and need to dig deep to make an educated guess. Think about which companies would be interested in your marketplace based on their key characteristics. For instance, if you’re in fintech, you might pinpoint a particular niche in your market that any tech company with the right infrastructure, cash on hand, and network could conceivably compete in. Once you get a list of companies that fit these characteristics, you will have a good idea of where new players might emerge.
Identify your current and prospective customers
This exercise can get exhaustive, but it helps to think a little outside the box and look into peripheral industries to see who your potential customers could be.
Take a lesson from Tim Hortons when it attempted to expand from Canada to the northeastern US in 1984. The restaurant chain took its time, but by 2010 began closing locations, having never gained traction. They failed as they tried to bank on their resounding success in Canada, reusing their same messaging but realizing that Americans didn’t care much for what Canadians love. By 2012, they had invested billions of dollars but were making little money from over 800 locations. They began closing operations.
Then with an investment from Burger King, they tried again by opening locations in Houston to much more success. By taking a measured, slow approach, and partnering with local media to appeal to the customer on a personal level, the company plans to expand slowly west until it grows enough market presence to take on Starbucks and Dunkin’.
When competitors are your friends
Not all players are direct competitors in your market. Take the major airlines, all buying the same jets from the same manufacturers. Often airplane manufacturers won’t release a new model unless they have a specific number of orders, or it’s just not worth it. If two competing airlines both place orders, they inadvertently help each other get what they want. Also, think about AT&T and Motorola. They can be competitors, suppliers, and customers of each other depending on the transaction.
Sometimes unlikely cross-marketing partnerships create new opportunities and widen your playing field. Take Mars and Hershey’s, when Mars lost the battle for product placement in the film ET to Hershey’s. Originally, the film producer asked Mars to put their M&M’s in the famous scene where ET follows the candy trail left by Elliott. Mars passed, so the producers went to Hershey’s, who put their Reese’s Pieces in the scene. The deal netted them billions of dollars in sales and put their candy in every concession stand of every movie theatre in the country.
Take an offensive stance
A lack of decision-making and alignment from within an organization prevents that organization from being able to act quickly on opportunities. Start thinking about what your strengths and weaknesses are as a company.
You don’t want to be in a position where you’re waiting for things to happen in the market, and then you’ll act. This is a reactive or defensive strategy. From an offensive perspective, if you proactively identify actions that your competition is likely to take, you can preemptively strike.
We’ve been looking externally for the past few chapters. In the next chapter, we start to look within for historical context. You don’t want to keep fighting the same battle and getting the same results.
Excerpted with permission from Competitive Success: Building Winning Strategies with Corporate War Games, Arjan Singh, Forbes Books.