Avoiding Competitive Myopia

[Greg Gentschev]

I've read a few writings recently warning managers, especially at emerging companies, away from focusing excessively on their competitors. The gist of the idea is that competitive analysis can lead to me-too moves, as companies try to match each others' product lines, pricing, and marketing strategies rather than innovating or staking out a segment of the market where they can build barriers to entry.

My take on the issue is that checklist-based competitive analysis is usually counter-productive, but that higher-level, more creative approaches can be very helpful. Combining customer research with competitive intelligence can be particularly powerful because the customer perspectives keep the exercise grounded in whether customers care about specific initiatives. If you're interested, I wrote more about the challenges of competitive analysis on my company blog.

I'm curious to get your perspectives on this too. How do you help your organizations or clients get value from CI while preventing them from getting mired in it? Wargaming and competitive simulations in particular seem like great ways to work on outsmarting rather than mirroring competitors. Personally, I don't have much experience with those approaches. I'd love to hear any war stories you might have on how those techniques or others have been helpful.

[Arik Johnson]

Sorry for not getting back to you sooner Greg - frankly, I think stubbornness and pride are the big problems in this business

[Greg Gentschev]

Arik, thanks for the response. I think you're right that everything being equal, we all tend to take our assumptions for granted and under-invest in planning for different possible scenarios. What do you do if the client doesn't appear open to having their assumptions challenged?

[Arik Johnson]

Great post - glad you shared it Greg - thanks! Briefly, my view on the benefits of simulation and wargaming for decision-making are that these methods can more effectively disabuse us of our false assumptions than others because the human mind finds that it's practically impossible to imagine futures we have not directly experienced in our past.

Through the experience of seeing how matters unfold (regardless of the "zero-sumness" of the benefits of the decision), we can learn to think more elastically about the possible permutations in every decision and action. But only if our minds are open to being changed. Assumptions are highly intoxicating ;-)

There's a great post on your topic that I found a few days back on VentureBeat - Death by Competitive Analysis - you might enjoy as well.