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A strong competitive strategy is essential to the growth and success of any organization. Executed right, a comprehensive competitive strategy enables organizations to build strategic advantages over their competitors and create a defensible market position. In the long-term, this unlocks the ability to achieve superior financial returns. 

Building a robust competitive strategy is a complex process. Often, this is led by external strategy consultants, who will use a series of established analysis tools, strategic frameworks, and various other elements to outline a long-term plan. 

Related: What is Competitive Strategy?

But the work doesn’t end once a competitive strategy plan has been agreed. Once established, it’s important that leaders are aware of the best practices they should follow to keep their organization’s strategy on track.

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A competitive strategy is a long-term commitment where organizations spend several years working towards a common vision. To ensure success, leaders must build clarity, engage a diverse range of stakeholders, and leverage the latest technology. In all these actions, there are a series of best practices to be aware of. Here, we’ll explore exactly what some of those best practices are, and share how you can leverage them to help your organization build lasting competitive advantage.

1.  Ensure Clarity in Strategy

Michael Porter’s classic framework states that competitive strategies fall into one of three categories: cost leadership, differentiation, or focus. Each category has markedly different behaviors. Leaders should clearly define which type of strategy the organization is pursuing in order to aid decision making at all levels of the organization.

Organizations who pursue a cost leadership strategy seek to offer a product or service of comparable quality to competitors for a lower price. This is typically achieved either through economies of scale or by realizing efficiencies in the value chain. 

On the other hand, organizations who pursue a differentiation strategy aim to create products or services that are notably better than any competitor offerings. This often requires investment in research and development and a thorough understanding of how market trends might evolve. 

Organizations that pursue a focus strategy execute either a cost leadership or differentiation strategy, but on a smaller scale, and aim to dominate niche sections of the market. 

 

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By ensuring clarity in strategic aims, it’s much easier for stakeholders in various business units to make decisions that align with the organization’s strategic priorities.

2. Embrace Dynamic Strategic Planning

A competitive strategy is a long-term vision, but the path to success doesn’t have to be rigid. Effective competitive strategies account for market conditions and change in real-time. There are two approaches to strategic planning, incremental planning and dynamic planning

Incremental planning operates on a short-term basis that is often tied to the organization’s business cycles. It focuses on immediate business goals, like quarterly or annual results. 

Dynamic planning, on the other hand, outlines a bold long-term vision and works backwards to identify the actions necessary to get there. The long-term goal is consistent, but the path that the organization takes to get there is flexible, and the competitive strategy can be adapted to account for market conditions. 

Organizations typically find it much more straightforward to keep their competitive strategy on track if they opt for dynamic strategic planning over an incremental approach. 
 

3. Strategy Starts from Within

When conceptualizing and executing a competitive strategy, it’s tempting to look at your competitors, and check out what they’re doing. But the reality is that this approach will mire your organization in a short-term, myopic focus. Organizations who over-index on competitor actions tend to exist in a defensive state, and are always chasing competitors, rather than leading the way.

A better approach starts by considering your internal core competencies and existing competitive advantages, and then builds competitive strategies that capitalize on these. Ensure that stakeholders from across the organization are involved in competitive strategy. Oftentimes, it’s leaders in areas like R&D, operations, and logistics that have the best understanding of what the organization is able to achieve. However, it’s also important to include stakeholders from sales and marketing, who benefit from their proximity to the customer.

4. Conduct In-Depth Market Research

Any competitive strategy that fails to meet the needs of customers is doomed to failure. But how do you best understand the needs of your customers? Market research

There are a variety of different branches of market research that organizations should leverage when shaping and executing competitive strategy. Primary research is most helpful for understanding customer opinions, identifying behavioral patterns, and testing out new ideas. Secondary research offers a variety of applications, helping organizations to validate their initial findings as well as understand larger-scale macroeconomic changes. 

One approach that is particularly valuable in shaping competitive strategy is prediction market research. Prediction markets enable organizations to quantify trends and understand how and when new markets will develop. Armed with this knowledge, organizations can build competitive strategies that capitalize on market trends, driving significant competitive advantages.

5. Outline Milestones and Drive Accountability

While there is a long-term outlook to competitive strategies, it’s important to have periodic milestones that drive accountability. 

What these milestones look like will differ for every organization, and they could be related to any number of business issues: market share, manufacturing output, or key partnerships. Ensure that key decision-makers in your organization are aware of the milestones, include them in business planning cycles, and are accountable to them being delivered.

6. Incorporate Market and Competitive Intelligence (M/CI) Activities

It’s important to monitor market and competitor responses to your competitive strategy. The best way to do this is by ensuring your organization is conducting market and competitive intelligence activities. Embracing M/CI as a strategy helps your organization react to events in real-time and make important business decisions with increased levels of confidence.

There are various options when it comes to implementing these M/CI activities into your organizational workflow. Many larger organizations have dedicated M/CI functions, which will work with business units across the organization to deliver insights that aid decision-making. 

Often, these teams utilize M/CI platforms like Knowledge360Ⓡ. Knowledge360 functions as a one-stop shop for everything related to market and competitive intelligence across the organization, with powerful tools to collect data, conduct in-depth analysis, and collaborate across departments.

An innovative new approach some organizations are adopting is to leverage trends and intelligence as a service. Organizations who pursue this approach are effectively outsourcing their M/CI activities to external experts, and benefit from cutting-edge insights, expert analysis, and a sophisticated approach they may struggle to adopt on their own. 

7. Incentivize Knowledge Sharing 

To encourage employees across the organization to buy into the competitive strategy, it’s important to incentivize knowledge sharing activities. There are several actions leaders can take to encourage these behaviors, and particular attention should be paid to reward and recognition stems. 


When employees from across the organization share knowledge and buy into the competitive strategy, execution tends to be much more successful. Ensure that everyone is aware of the organization’s overarching strategy, knows how to effectively prioritize their tasks, and is able to easily share knowledge via collaborative online platforms.

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Final Thoughts on Keeping Your Competitive Strategy on Track

Ensuring that your competitive strategy stays on track over the long-term requires both a keen focus on execution and clear alignment across the organization. Commit to seeking out key insights that will help refine the strategy, both through market research and market and competitive intelligence activities. Drive alignment by setting clear expectations, incentivizing knowledge-sharing behaviors, and holding leaders accountable to milestones. 

Need some guidance envisioning and executing your organization's competitive strategy? Cipher’s consultants are here to help. With years of experience helping the world’s top organizations build and execute competitive strategies, the Cipher team will help you build and maintain a lasting competitive advantage in your industry. To learn more, schedule a call today