Leo on Competitions

Writing about strategy and competitions of all kinds.

Porter's Five Forces is a very popular framework for analyzing the competitive dynamics of an industry. It is well taught to MBA students all over the world, yet I admit it is the one I use the least in Competitive Analysis. Not because I don’t find it useful, but rather because it’s a snapshot in time for an industry structure.

The premise is that by understanding the five forces, a company can identify the key factors that determine the competitiveness of an industry, and use this information to make informed decisions about how to position itself in the market.

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Michael Porter is considered the father of Corporate Strategy, by many. He is a pioneer. Although he is well known for his Porter’s Five forces analysis framework, it is his Four Corners model the one I find most helpful in determining what to do, which actions to take. In Competitive Intelligence, this is considered an essential tool for early warning.

The Four Corners model is a predictive tool that helps in determining a competitor’s course of action, by looking at the firms motivations and actions. It is by adding the perspective of motivations in the form of values, culture, mindset, and self-reflection, what makes it powerful in the most likely future strategy of a player.

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Chaos is the science of surprises, of the nonlinear, of the unpredictable. Expect the unexpected. While most traditional science deals with some approach to try to predict phenomena, Chaos Theory deals with nonlinear things that are effectively impossible to predict or control. e.g. weather, the stock market, company culture.

Competitive Strategy and Competitive Intelligence are disciplines that can be confused as being constantly trying to predict next steps, therefore considered a traditional science. Like a Chess Master trying to predict the next moves of his opponent, in order to prevent him from gaining an advantage.

But how do we try to predict, when there is chaos? Simple answer, we can’t, but we can look for beauty (i.e. patterns) in chaos.

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Product Management teams, are constantly looking for how to make their products better. They are always hungry for information that will make it more competitive, and more appealing than a competitive offer.

In Competitive Strategy we get frequently asked for a “Competitive Gap Analysis” to help product management answer that question. But what is it that they really want? Are they looking for justifications of a hypothesis or legitimate input on the product positioning? What product management needs is a full blown competitive gap analysis, not a side by side product comparison. The difference may be considered subtle by some, but it certainly makes a big difference.

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In times of recession and economic hardship, the natural tendency of companies is to look to retain customers as much as possible. This can bleed into other functions, such as when competing, let’s be defensive. Although business is not soccer (i.e. infinite game vs finite game), there’s some thought provoking analysis we can draw, by seeing what the FIFA World Cup in Qatar is showing about the importance of defense.

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Most recently I've been trying to generate a Competitive Intelligence dashboard. In it, we want to provide dynamically and manually updated info on the competitive intelligence services of the team. As such, the controversial SWOT analysis was brought up as an option. Some people mentioned a TOWS analysis, and the battle of acronyms started. I then set myself to analyze: are these really useful and what's the difference?

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There are millions of sales principles, tactics, trainings. Sellers know how to articulate value propositions, execute discovery, qualify opportunities, and close the deal. A basic, and often unanswered question is: how can I respond to objections that my competitor planted in my prospect and is affecting perception? Here's a simple workflow to help with that.

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