STRATEGY

Competitive Strategy Analysis & Formulation

Positioning your business to be more competitive increases its market potential and scaling trajectory. Simply put, growing where there is no competition is easier.

The main thrust of a competitive strategy is to make growth easier and more profitable. Therefore a business wants to focus on positioning itself where its competitiveness is boosted by its capabilities, where a competitor response is assumed to be a lower threat, and potential profit capture is higher. 

Once a business has defined how it plans to compete it sets a very clear focus for other functional strategies to aim for, such as growth, data and funding strategies. 

Typical problems indicating you need a competitive strategy:

“We’re not growing at the rate we would like to!”

“We don’t know what industry to enter!”
“I don’t know what our competition is doing, and it worries me”
“We can’t seem to stand out in the market”
“Should we invest in this business/project?”

To define a competitive strategy a business needs to:

Industry Structural Analysis

A deep understanding of the industry, and what forces apply competitive pressure to potentially change the profit potential. Ultimately we want to understand what determines competitiveness in the industry, and how we might exploit that information.

Competitor
Analysis

Although you should copy your competition, you should certainly know (deeply) who they are, what their objectives are, where incentive and direction come from, what their likely responses to various strategic moves would be, and what their perceived strategy is. This applies to those direct competitors as well as those indirect competitors.

Strategic Grouping and Mobility Barriers

A deep understanding of the industry, and what forces apply competitive pressure to potentially change the profit potential. Ultimately we want to understand what determines competitiveness in the industry, and how we might exploit that information.

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