Following on from your internal assessment of your company or team’s CI capabilities and getting feedback on the competitors that need to be focused on, the second stage of planning takes a more external view of your CI program.
This stage of planning focuses more on what competitors matter and what resources you have available to you and your team. From a practical point of view, your CI efforts are going to fall under one or a couple of very broad generalizations:
- You gather CI on a competitor and are responsible for creating and leading business plans (sales campaigns, pricing models, M&A activity and other business strategy) that directly impact competitors.
- You gather CI on a competitor and are a trusted advisor to those people making business planning decisions as listed above.
- You gather CI on a service or bureau basis to be consumed by interested parties to be then actioned on as they see fit.
Once you have a good handle on what your CI materials are being used for, you can take a very focused view on what competitors to focus on and what information is needed.
In my own role, strategic planning by competitors is secondary to their execution strategy within a sales environment. For that reason, the intelligence I gather is filtered through the lens of how our competitor is likely to sell to a customer. Pricing, messaging, partnering, industry models, etc form the pillars of how to compete – not 2-3 year strategic direction.
Tactical vs. Strategic. Patent filings are not much help in a sales environment, but do matter for a pharmaceutical company where lead times are long. Conversely, understanding discounting strategy matters greatly. Your company’s focus will be somewhere between these two extremes.
Getting to the heart of the external part of CI planning are three key areas of discovery.
- Competitor audit.
- Resource identification and assessment.
- Resource engagement.
Competitors are at the heart of our day-to-day jobs. From the internal benchmarking work you did in the “Internal” phase of planning you should have a very good idea of what competitors are causing the most trouble (or have the potential to). In most cases this benchmarking served to reinforce what you already knew regarding the most pressing competitive pressures.
The competitor audit serves to look at those competitors you have identified and stack rank them in terms of importance or ability to cause pain to your organisation. If you are #2 in the market, is your competitive pressure coming from you pushing for #1, or from #4, 5 and 6 banging on the back door?
I like to look at the Audit in the following ways, take SAP as an example:
- Competitors whose business your company wants (Netweaver vs. Websphere or Oracle FMW).
- Competitors who want your business (Salesforce vs. SAP CRM).
- Competitors that you want to keep track of as they talk to your customers (SAP vs. Google).
- Companies that could be potential competitors (usually partners – SAP vs. Infosys or TCS).
From these four broad categories you can identify what competitors should be focused on and what resources may need to get across these businesses. Note the audit is NOT about getting all the information on a competitor, but to understand the dynamic your company competes with those chosen competitors.
Now you have your most important competitors categorised by the type of interaction they have with your business, it’s a pretty straight forward task to break these into an Interaction Map.
Taking the example of if I was planning CI for Microsoft’s Exchange business. There is clearly a variety of competitors I should be looking at.
- Gorillas: Those companies that have similar large market share in a saturated marketplace. These are the companies that are going after Microsoft’s current business (enterprise mail) in a similar manner (Packaged software). Strong competition in every deal.
- Sharks: Those companies that have a high level of interaction, but Microsoft has low presence. Gmail and Yahoo mail are an example of this. While Microsoft has Hotmail, this had not yet been successfully tied to the Exchange family to offer mobile email solutions.
- Snakes: Those companies that have little market presence in the traditional email/messaging market. However, changes in customer usage and buying patterns may lift these competitors into a more favourable state. Java messaging solutions for example. Mobile communications may become more common than the PC over time and for that reason be the hub of messaging in the future. No immediate competitive treat, but usually massive long term threat.
- Mosquitoes: Those companies that make up the “rats and mice” for any particular space. Competition is weak and choices are made for reasons outside of those traditionally used to assess solutions. This may include laggards and very loyal legacy system users.
Resource Identification & Assessment:
With the Interaction map completed there is a clear segmentation of the competitors you need to focus on. For the most part, you’ll want to focus on Gorillas and Sharks. Gorillas for the incumbent business and the Sharks for new market opportunity.
The information you need for Gorillas differ from that you’ll need for Sharks. Gorillas need more detailed information on tactical events. New product upgrades, installed base information, key partners, selling tactics and customers that can be targeted etc. In the technology space, these are the competitors you may need to have detailed technical documentation on. Feature and functionality. Speeds and feeds.
Sharks, on the other hand need more information on the market as a whole. How are customers buying, what are the market growth rates, what new opportunities are being created and what threats do they pose. You will see very little head-to-head competition, so early warning systems may need to be put in place to gauge where customers see their technology purchases are going in the next 12 months.
With those resources broken down, you now need to look at what sources you have available for those. These may include:
- Analyst information (Gartner, IDC, Forrester, as well as financial analysts).
- Primary research.
- Sales force feedback
- Secondary sources (Such as RSS, PR, Websites, etc)
Next step is to assess the usefulness, reliability and cost (time and budget) of the data sources you’ve collected. The age old triangle rule is in effect here as it is in software development. Good, Cheap and Fast. Pick any two and you have to bear the brunt of the third.
- If the data is good and can be gathered quickly – it’s not normally cheap. (Eg: Analyst reports).
- If the data is cheap and good it usually takes some time to collect. (Eg primary interviews with your salesforce).
- If the data is cheap and fast – it normally isn’t good or needs to be scrubbed to remove marketing or PR spin or triangulated to get reliable data. (Eg RSS, Blogs, News sites and PR).
I include this point as a reminder that with various information sources you’ll need to have some idea of how regularly this information will be available. Building out CI deliverables around scheduled events that you know of (Financial results, analyst market share data) helps you to block out time needed in advance and show you the pockets of time you have to look at more time intensive forms of information gathering and analyzing.
Engaging your primary sources of data, particularly partners and sales representatives is very useful, if not critical, but timing and engagement is vital. You do run the risk of engaging at the wrong time (end of quarter) and losing any momentum you may have had. I plan to cover timing in following blog posts, but for the meantime, ensure you have thought about the first 90 days of your new financial period and when the best time to engage your stakeholders and primary sources of information is.