Playing to Win with Competitive Intelligence and Competitor Analysis

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Playing to Win with Competitive Intelligence and Competitor Analysis

One of the best books we have read and have actually used to understand a competitive landscape is “Playing to Win” by A.G. Lafley and Roger L. Martin. I first read this book after seeing fantastic maps and diagrams on the wall of a market intelligence director in Milton Keynes. They looked impressive and straightforward to understand, but he wouldn’t let me photograph them. Booo. So, on our next trip to Looe, Cornwall, overlooking the harbour, I read the book and understood how robust the model can be. This article is called playing to win with competitive intelligence and competitor analysis. Like most, the model has its pros and cons, but over the years, we have developed a template that assists us in thinking about competitors. Feel free to download a free copy.

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“By addressing these five essential choices, ‘Playing to Win’ provides a practical framework for businesses to develop a clear and coherent strategy that maximises their chances of success in a competitive market. The book emphasises the importance of making deliberate choices and proactively shaping one’s destiny in the business world.”

Article Summary:

1. Advantaged vs. Ordinary Players: Advantaged players have distinctive competitive advantages, offering unique value propositions and often leading their industries. 
Ordinary players tend to conform to industry norms and may struggle to distinguish themselves.
2. Identifying Advantaged Players: To recognise advantaged competitors, look for distinctive capabilities, a clear value proposition, a winning business model, long-term focus, and innovation leadership, among other characteristics.
3. Identifying Ordinary Players: Identified by their tendency to adhere to industry norms, imitate the strategies of others, offer limited differentiation, and exhibit risk aversion and a short-term focus.
4. Five Essential Strategic Choices: Companies need to decide on their Winning Aspiration, determine Where they will Play, define How they will Win, recognise the Capabilities they need, and identify the Management Systems required to support and execute their strategy.

The book presents relatively simple but effective ways how the often misused word strategy can help you succeed in your competitive environments. The book defines and splits competitors into advantaged and ordinary players. This could be an oversimplification of a complicated area of study. But it does bring a structured approach to looking at your competitors. I think this book is where the modern-day obsession with battlecards has come from. Simple, consistent information is presented in an easy-to-understand format. Many who build battlecards forget the simple bit. But that’s another story. Another linked article asking Is Competitive Advantage Still Relevant?

1. Advantaged Players

These companies have a clear competitive advantage over others in the market. They focus on creating unique value propositions and superior products or services that set them apart from the competition. Advantaged players often lead the industry and enjoy higher profit margins.

2. Ordinary Players

These companies lack a distinctive competitive advantage and struggle to differentiate themselves in the market. They may find it challenging to achieve sustained success and might resort to competing primarily on price, which can lead to a race to the bottom.

Advantaged player identification

So, it’s all very well to define advantaged players as companies who have developed a precise and sustainable competitive advantage within their industry. They have already strategically positioned themselves to win in their chosen market by creating distinctive capabilities, value propositions, and business models. 

But you need to identify advantaged player competitors early. It involves understanding their unique characteristics and strategic choices. Here’s how you can identify advantaged player competitors:

1. Distinctive Capabilities

Advantaged player competitors possess capabilities that are difficult for others to replicate. These capabilities include superior technology, unique expertise, efficient processes, and exceptional customer insights. Look for companies that consistently outperform their rivals due to their unique strengths.

2. Clear Value Proposition

These competitors have a well-defined value proposition that resonates with their target customers. They offer something genuinely valuable and differentiate it from the competition, making it hard for others to compete solely on price.

3. Winning Business Model

Advantaged players have a business model that aligns with their capabilities and value proposition. Their business model might involve innovative pricing structures, distribution methods, or customer engagement approaches that set them apart.

4. Long-Term Focus

These competitors think and plan for the long term. They make strategic decisions that may not provide immediate benefits but are intended to secure a strong position in the market over time.

5. Innovation Leadership

Advantaged player competitors tend to be innovation leaders. They’re not content with incremental improvements but actively drive new ideas and disruptive innovations that reshape the industry.

6. Proactive Strategy

Instead of reacting to market changes or competitors’ actions, advantaged players proactively shape the market. They set trends and influence the direction of the industry rather than merely following others.

7. Continuous Learning

These companies have a culture of learning and adaptability. They’re open to new ideas, seek feedback, and are willing to adjust their strategies based on changing circumstances.

8 Resource Allocation

Advantaged players strategically allocate resources to support their areas of advantage. They invest in enhancing their distinctive capabilities and bolstering the elements of their business model that contribute to their competitive edge.

9. Customer-Centric Approach

These competitors deeply understand their customers’ needs and preferences. They tailor their offerings to meet those needs better than their rivals, leading to higher customer loyalty and market share.

10. Commitment to Winning

Advantaged players are committed to achieving and maintaining a leadership position within their industry. They’re not satisfied with just competing; they aim to dominate and set the standard.

To identify advantaged player competitors in your industry, look for companies with the above characteristics. Study their strategies, actions, and track record of success. By understanding how these companies have positioned themselves to win, you can gain insights into developing your own competitive advantage and thriving in your market.

Ordinary player identification

So, ordinary competitors are those who compete within the existing industry boundaries and follow conventional strategies. Identifying ordinary competitors involves understanding their approach, mindset, and behaviour. Here’s how you can identify ordinary competitors  Understand Industry Norms: Ordinary competitors typically conform to established industry norms and practices. They often follow the same business models, pricing strategies, distribution channels, and product offerings as other companies in the industry.

1. Mimicry

Ordinary competitors tend to imitate each other’s moves and strategies. They focus on copying what their competitors are doing rather than seeking to create unique advantages or innovations.

2. Limited Differentiation

These competitors often struggle to differentiate themselves significantly from their rivals. They may offer minor variations in products or services but lack a truly unique value proposition that sets them apart in a meaningful way.

3. Incremental Improvements

Ordinary competitors typically make incremental improvements to their products or services without fundamentally challenging the status quo. They focus on minor enhancements rather than game-changing innovations.

4. Risk Aversion

Ordinary competitors are often risk-averse and reluctant to deviate from conventional strategies. They prefer to stay within their comfort zones and avoid taking bold steps that could disrupt the industry dynamics.

5. Short-Term Focus

These competitors prioritise short-term gains over long-term strategic thinking. Their decisions are often driven by immediate financial considerations rather than a broader vision of future success.

6. Lack of Disruptive Thinking

Ordinary competitors rarely challenge the fundamental assumptions of their industry or seek to redefine the rules of the game. They’re more likely to play by the existing rules rather than create new ones.

7. Avoiding Innovation

While they might engage in incremental innovation, ordinary competitors generally shy away from disruptive innovation that could reshape the competitive landscape.

8. Tactical Moves

Their moves are often tactical rather than strategic. They react to market changes and competitors’ actions rather than proactively shaping their own destinies.

9. Conservative Approach to Resources

Ordinary competitors allocate resources conservatively, typically focusing on optimising existing processes rather than exploring new avenues that could lead to growth and expansion.

Ordinary is everywhere

So, identify ordinary competitors in your industry and observe their behaviour, strategic choices, and approach to innovation. Look for signs of conformity, imitation, and a lack of disruptive thinking. By understanding the characteristics of ordinary competitors, you can better position your organisation to differentiate itself and gain a competitive advantage within the market. There is a clear and obvious importance of developing a winning strategy to become an advantaged player in the market. It also provides insights into how you can achieve this goal. The authors delve deeper into the concept of developing a winning strategy and introduce five essential strategic choices that shape a company’s competitive position:

1. What is our Winning Aspiration? 

This choice focuses on defining the long-term goal and ambition of the company. It involves determining what the company aims to achieve in the market and how it wants to be perceived by its customers and stakeholders.

2. Where will we Play? 

This choice involves identifying the specific markets, customer segments, and geographic areas where the company will compete. It requires a thoughtful analysis of the company’s strengths and weaknesses and selecting the most favourable battlegrounds.

3. How will we Win? 

This choice revolves around deciding on the unique value proposition that sets the company apart from its competitors. It involves understanding the customer’s needs and finding a way to fulfil them better than anyone else in the market.

4. What capabilities do we need? 

This choice focuses on the resources, skills, and capabilities that the company needs to succeed in its chosen markets. It involves aligning the organisation and its resources to support the chosen strategy effectively.

5. What management systems do we need? 

This choice pertains to the processes and systems required to support and execute the chosen strategy successfully. It involves establishing suitable structures, incentives, and measures to ensure the company can implement its strategy effectively.

Download our template

We have developed a playing-to-win template. If you would like a copy, please download it here. 

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Note: This template is designed to help you analyse competitors using the strategic framework outlined in the book “Playing to Win” by A.G. Lafley and Roger L. Martin. Make sure to adapt it to your specific industry and business context. Here is another article that my be of interest: what are the 4 areas you should look at to determine your organisation’s performance?

By addressing these five essential choices, “Playing to Win” provides a practical framework for businesses to develop a clear and coherent strategy that maximises their chances of success in a competitive market. The book emphasises the importance of making deliberate choices and proactively shaping one’s destiny in the business world.

Definition and Rank

1. Competitive Advantage Statement

Define their key strategic advantage. Align with their aspirations, where they play, and how they plan to win

2. Winning Aspiration

Identify the competitor’s overarching goal. Their aims to achieve in the market. Include revenue targets, market share goals and others

3. Where to Play

Analyse the specific markets, customer segments, or geographic regions they target. How do they define their industry playing field

4. How to Win

What’s the chosen strategic approach to achieving their winning aspiration? What’s their unique value proposition? How do they differentiate themselves?

5. Capabilities Assessment

Evaluate the core competencies and resources they possess. What strengths enable them to execute their chosen strategy effectively?

6. Competitive Advantage Breakdown

Break down their sources of competitive advantage. This could include technological innovation, brand recognition, cost leadership, customer loyalty, etc.

7. Value Chain Analysis

Study their value chain from sourcing raw materials to delivering the final product/service. Where do they excel and create the most value? Where might they be vulnerable?

8. Competitive Moves and Reactions

Examine their recent strategic moves, such as product launches, partnerships, acquisitions, etc. How have they responded to market changes and competitor actions?

9. Strengths

List their key strengths. These could be products/services, brands, distribution, customer base, and financial resources.

10. Weaknesses

Identify their potential weaknesses or vulnerabilities. What aspects of their strategy, operations, or market positioning could be exploited? 

11. Opportunities

What market/industry factors could they leverage to further their strategic advantage?

12. Threats

What external factors could challenge their success? Changes in customer preferences, emerging technologies, regulatory changes, economic shifts?

13. Future Strategy Speculation

Analysis of potential future strategies they may adopt to maintain or enhance their competitive position. How may they adjust their where-to-play and how-to-win choices?

Remember that competitor analysis is an ongoing process, and this template should be updated regularly to reflect changes in the competitive landscape. By using the “Playing to Win” framework, you’ll gain valuable insights into how your competitors are positioning themselves and how you can strategically respond to their moves.

Playing to Win with Competitive Intelligence and Competitor Analysis

“Playing to Win” by A.G. Lafley and Roger L. Martin offers a pragmatic framework for businesses wanting to develop a competitive edge in the marketplace. By defining and distinguishing between advantaged and ordinary players, the authors provide actionable guidance on how companies can position themselves as industry leaders. The book introduces five pivotal strategic choices that guide a company’s competitive stance, emphasising the importance of intentional decision-making and proactively determining a company’s path in the business sphere.

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