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Jumpstart Your Competitive Intelligence by Looking For the Blue Ocean

May 7th, 2013

medium_4725377690Blue ocean strategy is all about finding a disruptive business model to your industry.  Finding your blue ocean requires a hard look at the industry as a whole, an exploration of value propositions, and the ability to anticipate willingness to pay factors that don’t currently exist.  It’s clear that this kind of strategy requires the use of good strategic competitive intelligence (CI).  Unfortunately, most companies don’t do this kind of comprehensive industry analysis routinely.  But thinking of the blue ocean as a mindset rather than a session with a consultant can insert innovation into all areas of a company—especially CI departments. 

We’ve seen a lot of clients whose CI departments are stuck in data mining or research mode with little integration into the business strategy.  Looking at competitive intelligence through the lens of blue ocean strategy is the best way CI professionals can start to offer more value to the company through strategic insights. 

Think Past the Top of Mind Competitors

Even the most experienced CI departments can find themselves spending all their time on analyzing the moves of just one or two rivals.  This is not only an indicator that your company’s strategy is in the middle of the red ocean, but is also a distractor from less obvious but maybe more imminent threats.  Spend some time on those second or third ring competitors on your competitive landscape.  Try segmenting or looking at the data in different ways—that third ring competitor may be closer than you think…. 

Think about Substitutes

Blue ocean strategy is all about finding new willingness to pay factors–and that means not just looking at the copycat competitors.  For instance, doing CI for an airline might mean looking at the other airlines out there.  Take it a bit farther and you’re looking at other means of transportation.  But what about Face time or Skype?  A blue ocean mindset isn’t just about finding your blue ocean strategy.  It’s about exploring all possible blue oceans, and keeping an eye on those horizons that have the potential to devalue your product.

Know the Ins and Outs of the Industry

While you are finding all those blue oceans, it can be helpful to take a look at the industry as a whole.  Porter’s Five Forces is a useful tool for this.  A deep understanding of the barriers to entry and the attractiveness of the industry as a whole will give you clues to watch for.  Keep an eye out for signs of new start ups in your industry and watch what they do.  They are most primed for finding that coveted disruptive business model.  

Thinking through CI in this way is the best way to ensure that you are anticipating the needs you’re your strategic decision makers and will move you along the CI continuum toward a more strategic CI practice. 

Talon Strategy is strategic consulting firm based in Omaha, NE.
photo credit: Agent Smith via photopin cc
 

Effective Competitive Intelligence: More Than Data Collection

April 29th, 2013

When Talon meets with new clients, early on in the engagement we try and ask the competitive intelligence champions to step back from where their CI plans currently rest and we ask a very simple, but important, fundamental question about Competitive Intelligence:  “What do you want to achieve with your CI?”

Simple enough right?  The typical response is usually a description of what the company wants to know, such as, “We want to know everything our competitors are planning, or launching or what they will be pricing at.”

But what we are actually trying to get to is how competitive intelligence will fit into the client’s corporate culture: What will this knowledge be used for? Who will be the consumers of competitive intelligence? How will CI inform your business strategy? 

After all, an intimate knowledge of the competition is useless if there is no actionable intelligence attached to it, or if decision makers inside the company don’t believe in CI, or worse yet, never see it.  In the beginning it is often more important to think in terms of what you want to do, rather than what you want to know.

Financial District San Francisco, CACompanies that are just starting out with CI will find it pretty difficult to jump right in and start providing strategic, actionable insights the first week of introducing CI into their company where nothing has existed previously.  We see the Competitive Intelligence continuum as having three stages.  Organizations naturally progress down this road as dictated by the needs of the company and by the skill and experience level of the CI professionals.

Stage 1. Warehouse CI

Warehouse based CI is a central repository for all competitive information.  CI personnel are data collectors who field requests from internal managers and help them locate competitive information.

Stage 2.  Research based CI

CI researchers dissect competitor financials, attend trade shows, assemble pricing comparisons, conduct secret shops and search for news and press releases.  The CI researcher then pushes the appropriate information found, out to the decision makers that can use this information.

Stage 3.  Strategic CI

CI strategists provide directional intelligence along with recommendations (What’s going on, what’s next and what should we do about it?).  This type of CI is actionable, predictive and hypothetical and is imbedded into the daily strategic decision-making process. 

Unfortunately not all companies follow this continuum all the way through.  Some stop at various points or linger in early stages for far too long.  We find that these companies tend to view CI in a more limited way, defining it in terms of what information should be collected rather than as a core contributor to their strategy.  As strategy and competitive intelligence consultants we will always applaud an organization that does something to track the competition.  Doing something is always better than nothing.  However, to us competitive intelligence is strategic by nature, and we believe that every single company out there can benefit from working towards Strategic CI.  Only then can an organization unlock the real power of competitive intelligence.

Talon Strategy is strategic consulting firm based in Omaha, NE.
photo credit: Brandon Doran via photopin cc
 

Written by Jeff
Posted in CI Tools, Competitive Intelligence | No Comments

Competitive Intelligence: The best man (or woman) for the job

April 16th, 2013

What is the ideal skillset for a competitive intelligence professional?

Talon has all types of companies as clients, and companies that are at very different stages with their competitive intelligence functions.  Recently we were meeting with a client who was at the beginning stages of creating a competitive intelligence function when the CI manager’s boss asked us what skills a good CI Manager should have. 

Most of our clients have a competitive intelligence person already in place, and many times these people weren’t hired because of their skillset, but rather promoted from within for various reasons.  It could have been budget reasons, which department was going to be the biggest consumer of CI, or sometimes it was just because the person showed an interest in doing this type of work where others haven’t.  This last reason is how I actually got started in CI.  I was a call center manager at TD Ameritrade.  My previous position was certainly not the typical place to find a CI practitioner, but I showed an interest in the competition and the future of the industry, and took the initiative to incorporate CI into my role.  When the company saw a need for a dedicated CI department, I was chosen to head up the effort. 

medium_266143521The truth is that there is no typical proving ground for a CI professional because the CI function requires such a diverse range of skills and experience.  An ideal CI manager or practitioner would be a natural detective, researcher, entrepreneur, analyst, strategist, and prognosticator with excellent partnering skills and a customer service mindset.  If that’s not enough, the candidate should also be intimately familiar with marketing, human resources, finance, and operations.  Good luck finding that in a single person.

As with any position, a good CI practitioner will know his or her limitations and know when to hire or outsource to address any situation.  A best in class CI function deals in cold hard truth.  There’s no time for sugar coating when the competition is kicking your butt.  The same goes for self-assessment.  The best CI professionals can be honest about their strengths and weaknesses and quickly determine where the company’s CI consumers need more than is being offered. 

So how did we respond to our client?  We explained that, in the end, it doesn’t matter what the individual skillset was as long as that manager knew what CI was supposed to provide for his company, what his limitations were, and where to go augment his skillset, whether it was a partnership formed inside the company or through an outside resource. If there was one quality that captures the essence of what makes a good CI professional: Honesty—cold, unfeeling and brutal honesty.  A good CI practitioner has the ability to leave emotions out of their work and deliver an honest assessment of the state of the competition, no matter how unpopular that assessment is.  

Talon Strategy is a Strategy Consulting firm based in Omaha, NE.
photo credit: Angelina :) via photopin cc

Written by Jeff
Posted in CI Tools | No Comments

Strategy begins and ends with the Value Proposition

April 1st, 2013

Quick—what is your value proposition?  If you can’t answer quickly and concisely, then your customer probably can’t either.  Your value proposition is a description of what brings people in and what keeps them happy with you.  Unlike the timeless guidance that comes from a solid mission and core values, your value proposition should constantly be reevaluated to keep up with changes in the market.  Unfortunately we regularly see clients who let their value go stale, or worse, never really articulate their value proposition from the beginning.  

The Quest for ChangeValidate your value proposition

How do you know if you have a good value proposition? Start by asking around.  Ask a friend or spouse who is not intimately involved in your business what they think it is.  If they have a hard time, it’s possible your value proposition isn’t clear enough, which means your strategy needs rethinking.  Next, take a look at your financials.  Where exactly do you make your money?  How have the numbers changed over time? Looking at the numbers forces you to validate those assumptions about your best product and your best customer.  Finally, and perhaps most obviously, ask your customers!  Your customers may not be buying for the reasons you think.  The makers of the Lean Startup have a great model to follow on this one. 

Take it to the next level

Today’s successful companies don’t stop at a focus group or survey to find out what the market values the most.  They dig even deeper into whatever data they can get their hands on.  Understanding the customer is the number one priority in ensuring you have a strong value proposition.  Target is a perfect example of success in this area.  After some deep analysis into their customers’ buying patterns, they found they could create loyal shoppers by bolstering the value proposition for one specific customer segment—expectant mothers.  Not only did Target zero in on who their most important customer is, but they found ways to identify her before anyone else. 

Don’t forget about the industry

Many organizations make a mistake in focusing solely on their value proposition for the consumer.  But taking some time to think through your value proposition to the industry can benefit your strategy.  Carnival Cruise lines is great example of a company with a strong value proposition to the industry. Carnival’s low cost cruises serve as a sort of initiation for first-time cruisers, creating a funnel for the vacation cruise industry as a whole.  Repeat cruisers are easier to win than first timers, so competitors gladly yield the way for Carnival to focus on winning the newbies.  Ensuring you offer a distinct value to your industry makes your strategy sustainable, reducing the risk of unnecessary competitive battles or dreaded price wars.  It can even help you look at competitors in a new light or find strategic partnerships in unexpected places.

Talon Strategy is strategic consulting firm based in Omaha, NE.
photo credit: jDevaun via photopin cc

Written by Talon
Posted in Strategy | No Comments

Competitive Intelligence must be Strategic

March 22nd, 2013

A robust Competitive Intelligence (CI) practice within your organization can be the backbone of good strategy.  CI provides awareness that is vital to strategic preparedness and a perspective that can serve as an important reality-check for your strategy.  Unfortunately many companies do not reap the benefits of this discipline in their strategic decision-making.  There are a lot of reasons that CI fails to be strategic, and many times the problem lies in how a CI functions within the organization’s structure.  In our strategy consulting practice, we’ve seen a few different problems that can hinder real CI effectiveness:

Tactical Beginnings

Ideally, a CI function begins with a request from an organization’s strategic decision-makers, integrating the two disciplines from the very beginning.  Realistically though, CI can originate in a lot of different places, and sometimes where you get started can make it difficult to ever be strategic. CI can grow out of the market research or risk management groups who see a need to look at the competitive landscape. We’ve even seen CI start in the technology department with requests for internet scrapers and tools to help pricing, product and marketing managers make better decisions based on what competitors do. In these cases, CI often gets stuck in a mid-tier, tactical position within the company.  Born out of requests for information by the decision makers closest to the ground (rather than at the top), they become reactive, finding and disseminating surface level information that is of little use to strategists.  Positioned in the middle of the organizational structure, these CI departments rarely have the ear of strategic decision makers. 

Disjointed or Informal Structure

In some organizations, elements of CI will reside throughout several different departments instead of a centralized function. While it’s good to have as many people as possible thinking about your competitive landscape (we talk a lot about the need for a CI culture), compartmentalized CI can lead to redundant or irrelevant work.  Even if a company is really good at sharing information across departmental lines, what is shared is often just news—void of strategic insight. In this case, CI takes a backseat to one’s primary responsibilities and is slanted toward departmental—not organizational—concerns.  The result is competitive intelligence that is not integrated into strategy.

medium_3798802695No Interest at Strategic Level

Even Strategy departments or decision makers who recognize the value of CI often limit its effectiveness.  We’ve heard decision-maker’s say, “I don’t want [the CI professional] to do my job for me.”  While these strategists view competitive intelligence as a valuable tool, they don’t see it as CI’s role to provide strategic insights to the competitive information.  Sometimes this is the result of internal politics or defensive posturing, but often times it is simply a limited view of what a real CI function can do.   Good strategic CI will tell you more than what your competition is doing now—it can inform your strategy with an understanding of what moves your competition will likely make in the future and what new threats lay on the horizon. 

Regardless of where your CI function sits within an organization, these barriers can be overcome by ensuring a good partnership exists between both the CI and strategy groups.  Like all good partnerships, there needs to be effort on both sides.  A competitive intelligence team may need to make a deliberate effort to elevate their work beyond the tactical, producing insight that is useful to the strategic decision makers at the top.  The strategy team and senior executives need to view CI as a useful too, seeking them out and requesting the insight that is needed for strategy.  Without this partnership, there is no way for CI to reach its full  and useful potential.

Talon Strategy is a strategy consulting firm in Omaha, NE.
photo credit: Buzz Hoffman via photopin cc

Written by Talon
Posted in CI Tools, Competitive Intelligence, Strategy | No Comments