7 Minute Read

This blog is one of three in our Competitive Strategy Series. This series is meant to help you understand the three key parts of your competitive strategy. You can compare the three pillars to three legs of a stool. If one leg is shorter than the rest, or worse yet, if you are missing a leg completely, your stool will fall right over.

The same goes for the competitive and market intelligence function in your organization. If you aren’t executing all three pillars, your overall strategy will ultimately crumble.

Read about all three pillars in our blog series, The 3 Pillars of a Comprehensive Competitive Strategy:

  1. The Framework (this article)
  2. Prioritizing Information and Research (Coming soon!)
  3. Monitoring & Communication (Coming soon!)

What is The Framework?

The first of the three pillars is your framework. This is the groundwork and foundation you do to lay out your competitive strategy as an organization. Just like in sports, you can’t simply execute a play without having planned it first. 

Building your framework involves doing the research you need to be informed, working to understand the outside forces that will affect you, and then building a well informed, educated plan of action. It is the strategy that will make your execution a success or a failure.

Why is The Framework so important?

For decades competitive intelligence initiatives at corporations around the world have fallen victim to an all too familiar cycle of surprise, reaction, overload and, ultimately, death. 

Our research shows that up to 70% of typical competitive intelligence activities add no value to the business it serves. Finding the right tools and processes can help you spend up to 45% more time on analysis, instead of lower value tasks.

"up to 70% of typical competitive intelligence activities add no value to the business it serves."

Corporate competitive intelligence tends to be implemented reactively, rapidly becomes unmanageable, rarely delivers meaningful insights, and dies until that next surprise market event, merger or acquisition has executives calling for more intelligence and better insights. 

And then the cycle begins again. 

This cycle happens specifically when organizations ignore the setting of a specific strategy or framework.

Don’t be one of the 70%. Join the 30% who do it right.

Additional Resource: Learn more about the biggest mistake organizations make in their competitive intelligence function from our article, Breaking the Cycle of Competitive Intelligence Failure.

Additional Resource: You can also watch Competitive Strategy Best Practices, a 30-minute presentation by Cipher’s Director of Consulting, Derek Heiss, that highlights some of the common challenges companies face when planning their competitive strategy and how to overcome them.

Building Your Framework.

Now that you understand the value of building a framework, the next question becomes, “where do I start?”

At Cipher, we facilitate workshops for organizations specifically meant to help them plan effectively by anticipating disruption, overcoming organizational inertia, and turning risks to opportunities.

Here are a few simple steps to get you started, based on the activities we typically do during our workshops.

Step 1: Understand where you are today.

When beginning the competitive intelligence process from square one, you should always start by establishing a firm plan for your CI endeavor. Solid planning at the beginning of a competitive intelligence engagement will fuel the rest of the processes, ensuring you are on track to meet the goal you decide upon. Your eventual data collection, organization, analysis, and production will then be able to follow a cohesive direction.

Identify your differentiators.

Make sure you are able to answer this question before going any further: What are your primary differentiators? Make sure you have properly identified your own organization’s sources of differentiation. What are your primary competitive advantages, and what are the key value propositions for your brand?

Today’s marketplace is dense with competition - perhaps more so than ever before - thanks to the fast pace of technological change. To compete, your organization must stand out by differentiating yourself from your competitors.

Differentiation is more than simply answering the question, “What makes you different from your rivals?” Instead, ask yourself more specifically: What unique value do you offer to your customers that your competition does not?

A critical analysis of your company’s differentiation also isn’t just a brainstorming exercise. When we talk with groups of employees, or managers, or executives from within a company, and we ask them what sets their company apart, we often hear dozens of answers. But after some poking and prodding, we can generally separate the wheat from the chaff. The reality is that most companies only have a handful of true differentiators—sometimes there’s really only one!

Some questions to ask yourself in this endeavor are:

  1. Is it really (and be very honest here) the case that only your company can offer or deliver your stated differentiator? If not, then it probably isn’t your real differentiator.
  2. If you were the CEO of a startup company in your market, how would you choose to attach the incumbent organizations? The answer here may help you illuminate a gap that you can work to make a differentiator if it isn’t today.

Identifying your true differentiators is the first step in developing successful strategies. Until you’ve done this exercise with rigor and a critical mindset, you cannot effectively plan anything from marketing messaging, to sales processes, to product delivery and customer support.

"Identifying your true differentiators is the first step in developing successful strategies."

Additional Resource: Learn more about how to truly identify real differentiators with our article, How to do Market Research: Differentiation, Trends, Indicators and Warnings.

Identify your goals.

Additionally, you will want to make sure you are able to understand and answer the following questions with ease before diving headlong into your strategy:

  • Who are the consumers? You will need to identify the main stakeholders for the research process. Who needs and will be using the results of your competitive intelligence plan or market research?
  • What is the strategic objective? Make sure you’ve defined the strategic objective those stakeholders are looking to fulfill by accomplishing this research.
  • Where does that competitive information live? Depending on the objectives at hand, the data you need could easily live in many different places. A lot of information could be unattainable to you without the help of expert researchers. The deep web is 90% of the internet. Like an iceberg poking out of the ocean, the deep web has information that is not available to the masses unless you know how to look under the surface for it.
  • What are your internal constraints? There are three primary constraints that will limit what you are able to accomplish: cost, time and scope. Make sure you know what you have available to you, and look for opportunities to leverage tools that can extend the value of what you can provide within those constraints.

Additional Resource: Learn more about this step from our in-depth article, Creating a Competitive Intelligence Plan.

Find the data you need to build a plan.

This step is one you will return to over and over again as you continually review and refresh your strategy, and blends very much with pillar number two, prioritizing information and research (the next blog in this series). So the choices you make about how to collect, and continue to collect and monitor data over time will shape the process by which you update your strategy in the future.

You and your CI team need to cast a wide net of effort and resources to capture and collect all relevant or possibly relevant information. This is dependent on your access to data sources and your capacity for extensive research.

To start collecting information, pool your data collection resources. Data comes from many places and gathering the sources of information you will be using to research is a necessary first step. 

You don't want to miss out on important information that will help you plan simply because your pool of data was too shallow, so make sure you have a variety of source types and enough of them to get a firm consensus on the data you will pull.

Continue Your Exploration of the 3 Pillars of CI Strategy: Learn more about prioritizing information and research with our second blog in the series, The 3 Pillars of a Comprehensive Competitive Strategy: Prioritizing Information and Research. (Coming soon!)

Additional Resource: Learn more about how you can capture data from our article, Competitive Intelligence Information Gathering.

Step 2: Identify the Here, Near, and Next.

The biggest question when building your competitive intelligence strategy is always, “what do I focus on first?"

This is where Here, Near and Next comes into play. As we identify the items that will be effecting us across the Here, Near and Next spectrum, we are effectively categorizing them by things we should choose to Monitor, Plan, or Act upon. Essentially, using a timeline represented by:

  • Here: This is an immediate threat to our business and we should already be responding to it. This translates to something we should be Acting on right now. (Here = Act)
  • Near: This is a very probable threat to our business and an action plan should be defined and ready to implement. This translates to something we should be Planning for right now. (Near = Plan)
  • Next: This has the potential to disrupt our business, the timing is unclear, but we should be Monitoring the trajectory of it. (Next = Monitor)

As you discover new potential disruptors through your competitive intelligence monitoring, you should be asking yourself, “How relevant is this to MY company and where does it fall on the Here, Near, Next spectrum?” 

Probability target

Start by identifying major disruptions that will affect your business. You’ll want to run through the 11 macro sources of disruption, identified by futurist and author Amy Webb published by the MIT Sloan Business School, and think about how major disruptors in your space will directly affect each of these 11 sources in your industry or market. The 11 sources to consider are:

  1. Wealth distribution
  2. Education
  3. Infrastructure
  4. Government
  5. Geopolitics
  6. Economy
  7. Public health
  8. Demographics
  9. Environment
  10. Media and telecommunications
  11. Technology

Look at how each of these changes to a macro source of disruption relates to your own business differentiators and identify your biggest areas of risk and opportunity as a result of that. From there you’ll be able to build a solid plan for how to act on those with the most opportunity.

Then categorize all of these opportunities and areas of risk by where they fall across the Monitor, Plan, and Act spectrum. Below is an example of this exercise built around the specific disruptor of the COVID-19 pandemic in the insurance industry for illustrative purposes:

09_SIR Webinar Post COVID Strategy - Google Drive

Additional Resource: You can download the entire set of slides from the presentation referenced in the image above, in order to see the progression through each of the 11 macro sources of disruption, to distill down those efforts and arrive at this sample action plan matrix.

Additional Resource: For more information, you can also watch Here, Near and Next: Why Your Business Needs More Than Monitoring to Win in 2020, a 60-minute recorded webinar by Peter Grimm, President of Cipher, to learn more about how to use the Here, Near, and Next framework.

Are you looking for help building your Framework for your competitive intelligence strategy?

Often, this is a very difficult task to do 100% internally. It helps to have objective eyes, from outside your organization, to help you identify and catch things you may miss because you are too close to the situation.

At Cipher, we focus on competitive strategy. When we partner with clients, our main role is to understand our clients’ challenges, conduct exhaustive research and analyses, and arrive at a point-of-view and set of strategic recommendations. 

Your team will benefit greatly from the outside point-of-view, subject matter expertise, access to best practices, objectivity, new ideas, speed, and results that come along with a consulting engagement to strengthen your strategy and firm up your voyage plan for the journey ahead.

Additional Resource: Learn more about what you should look for in a competitive intelligence consultant with our video series, Maximize Your Investment In A Strategy Consultant.