4 Minute Read

Generating success in 2020, just like every year, requires strategic planning. But, not just a few hours with a whiteboard and a well-intentioned mission statement. When done right, strategic planning not only tells you where you want to go but what you’ll need to do, who you’ll need to compete against, and what problem you’re going to face in reaching your defined success metric.

One of the biggest missed opportunities for businesses during their strategic planning sessions are their disruptors. Identifying, studying, and planning for those disruptors, which every company has, is a non-negotiable part of your planning. 

You need to know with reasonable certainty:

  •  what potential disruptors pose the highest risk for your business.
  • You want to know when these potential disruptors are coming.
  • You want to be able to act to protect against disruptions (and even take advantage of them).

-- Article Continues Below --

Market Research

Learn how you can start building a significant competitive advantage with market research. 

Every industry and company will have their unique set of disruptors, some few and some numerous. It is unnecessary and impossible to monitor every single disruptor you identify. 

The good news is that you don’t have to, Instead, you need to monitor and prepare for the handful of disruptors that would most affect your business and industry.

But, how do I do that? 

There are already some fantastic methodologies that can help you understand the “what” you should be doing, but we’d like to share with you the “how” to set an impactful framework. 

1. Evaluate of Your Company’s True Competitive Advantage

Why?

The disruptions that can most harm your business are the ones that attack your competitive advantage. Your competitive advantage, your core asset, is also your greatest vulnerability.

Of course, we mean your true competitive advantage, which is likely not the first thing that pops in your head when you think of your own advantage in the market. 

So, what is my true competitive advantage?

If your first, or even second answer is naturally, “my people,” we’re going to have to take a pause. The reality is that every single company operating tries or has tried to use their people as their advantage. We know that your team is one of the major factors to your success, but if they were to all leave and go to your competitor, would your competitor now have your own unique competitive advantage? Of course not. 

Determining your true competitive advantage is a hard task, but a critical one.

And there are a variety of models and frameworks that can help you do it. A few of our favorites are: Michael Porter’s Five Forces and Tracy and Wiersma’s Value Disciplines

One of the challenges in determining your competitive advantage is that it can change over time. What was once a true competitive advantage will eventually become a minimum market entry requirement. That’s okay, these can and should evolve as the market does. 

Doing the work of determining your competitive advantage also helps you to effectively assess the potential threats you’re facing. Again, when you know what your advantage in the market is, you don’t need to track every new development and entrant, just the ones that pose a threat to your competitive advantage. 

2. Assess External Threats and Opportunities

With a stronger definition of your competitive advantage, now it’s time to access the external threats and opportunities to your current position and future growth. 

It can be extraordinarily difficult to see disruption coming, cognitive biases tend to cloud strategic decision making. Adding in the rapid pace of change and the increasing decibel of noise, finding the right distributors to pay attention to requires balance and strategic decision making. 

One tool to leverage right away, would be to build an internal understanding of the most common ways in which disruption can happen.

A recent study identified 5 different paths that new market entrants typically follow and 9 “patterns of disruption” or ways in which disruption can occur.

Once you are aware of your competitive advantage as well as the most common types and pathways of disruption, it is time to look for potential disruptors to your specific business.  These will typically come from larger societal and business trends.

We find it useful to group trends into three different categories: 

typical larger societal and business trends

  1. Megatrends: express what we know with great confidence about the future. They are near certainties. Examples of megatrends include an aging population, globalization, and increasing network speed.

  2. Macrotrends: flow from megatrends. Examples of these include IoT, AI, and sustainability.

  3. Microtrends: flow from macro trends. Examples include subscription business models, smart homes, and autonomous vehicles.

This is a great framework, but be mindful of not becoming overly attached to the terminology, there are no predetermined rules, just guidelines.  The idea is that threats to your competitive advantage and business are likely not going to come out of the blue.

They are likely going to come from already emerging and evolving existing trends. And you can know what these trends are.

At this point, you should have: 

  • Your defined competitive advantage(s)
  • Knowledge of how disruption in your industry tends to happen
  • Have a list of current and relevant trends that are likely to disrupt your market

With this information, you’ll now be able to generate a solid and comprehensive list of potential disruptors to your business.

Great!

That is an important step. But it isn’t enough. 

Why? Because you don’t need a list. You need a concrete plan to handle the items on the list. And that plan needs to account for the timing of the threat.

Your resources are most-likely limited and you need to know whether you need to address a potential disruptor right now or if it can wait 5 years.   

3. Prioritize Your Findings into an Action Plan 

There are a lot of different ways to develop this plan, but we like to use a 3 x 3 matrix.

On the X axis is Monitor, Plan, and Act moving toward increasing probability.

On the Y axis is:

  • “here” (0-2 years, we should ALREADY be responding), 
  • “near” (2-5 years, we should be planning our response, and
  • “next” (5+ years, we should monitor). 

Action-Plan

With this in place, you can be confident that you’re building a well-rounded strategy to address the significant potential disruptors your business faces, and you’re doing in the right order. 

But how do I get from a raw list of threats to an effective action matrix plan that accounts for each of those threats?

It is a matter of prioritizing.

The good news is that help is available through Prediction Market Research. 

“Prediction markets (also known as predictive markets, information markets, decision markets, idea futures, event derivatives, or virtual markets) are speculative markets created for the purpose of making predictions.”
- Wikipedia

This allows you to get insights and direction you can rely on during your strategic planning, and they are able to provide you them efficiently and inexpensively.

This gives you insights that other methodologies simply cannot capture.

But perhaps the most useful results you get from running prediction market research are the qualitative answers you get from participants. When it is time to determine how you are going to respond to a threat or even what new offer you can develop to meet a changing market, the qualitative answers prediction market participants provide can be invaluable. 

The bottom-line benefit for you is that the predictions created through prediction market research are over 90%+ accurate. This means that when you use this research to prioritize threats and develop your action plan matrix, you can have the highest level of confidence in your strategies.

HUUNU Demo