How to Conduct Competitive Analysis to Protect You

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How to conduct Competitive Analysis to protect your Competitive Advantage

Disruptors can seriously damage and, in some cases, kill your business. They do this by finding what makes you tick and attacking this critical aspect of your business: your competitive advantage. This article suggests ways to tackle threats to your competitive advantage from disruptors and asks how to conduct a 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 those that threaten this competitive advantage. This article asks how to conduct a competitive analysis to protect your competitive advantage so that you can identify your competitive advantage and key threats and opportunities. 

Successful and consistent

Successful 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 will look at after the whiteboard has been put away. 

Strategic planning must tell you where you need to go. What direction do you have to take to get there, and what do you need to do along the way? Who will 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 go, how do you know you are where you want to be? And what to do if this or that happens. 

Beware of listing your goals and then describing the usual competitors to analyse. Doing this is a recipe for disaster. You need to look for your industry’s current and future threats, the disruptors in the industry. As Apple put it a few years ago, find the crazy ones, misfits, rebels, and troublemakers—those round pegs in square holes—those who see things differently.

Your most significant risk

With this in mind, you need to know which disruptors will pose 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. 

Read More: What Should a Competitor Analysis Include?

Now, it’s essential to understand that you do not need to monitor every possibility. You are not likely to have the time and budget to do so. By looking and analysing your market, you can decide on 5 to 12 to keep a closer eye on. Try to 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 are at the top, and you need to keep a brief watch on the others at 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

Before 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?

Read More: What Should a Competitor Analysis Include?

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? 

You must extend your analysis or find a better competitive advantage if you can’t see any. Is it really a competitive advantage? Of course, your competitive advantage will change. Your new piece of kit was once a competitive advantage and 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 an ever-moving

So, your competitive advantage never stays still, and it always moves forward. Otherwise, you will end up like Blackberry. Great phones for their time and an extremely loyal customer base. But the competitive advantage was destroyed. Their competitive advantages were a real keyboard, secure comms and a 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.

Don’t look at every competitor once you know your current competitive advantage. Focus on the ones who can hurt it. 

2. Assessing the threats and opportunities

So, you now have a better understanding of your competitive advantage. It’s time to look at external opportunities and threats you could be facing 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 experiences 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. However, micro-trends can also contain disruptors. Focusing only on 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. Determine what signals a potential disruptor is coming to the market. 

3. Take action from your findings.

Once 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 of the following criteria.

A. – Within 18 months 

B. – 18 months to 5 years

C. – 5 to 10 years

  • Then, describe why each one should be classified as a disruptor.
  • Isolate any clear signals of change for each disruption.
  • Write down what you are going to do about it.

This analysis will provide you with a measurable and consistent strategy, flexible enough to cope with disruptors and enhance your competitive advantage.

Conclusion, How to conduct Competitive Analysis to protect your Competitive Advantage

This 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 a competitive analysis to protect your competitive advantage. 

We offered a three-stage process to help you understand what you are up against. We explained that you should look at yourself first to find out what your competitive advantage is. Then, look for the disruptors consistently. 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?

Photo by Arthur Osipyan on Unsplash

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