What
Will Your Competitors Do Next?
Once you know the identity of your most direct
competitors and have a good idea as to your second- and
third-tier competitors as well, you should give some thought to
which actions they are likely to take in the next year or so.
Estimates of competitors' future activity depend on your knowing
and understanding their objectives, strength in the marketplace
and resources. This important intelligence is key to your
company's:
- annual forecast of sales, spending, and profits
- promotion and advertising programs
- introduction, support, and success of new products and
services
- market, product, or service category, and sub-category
trends
- direction for future growth
Gathering competitive intelligence can be the difference
between realizing your company's annual plan and losing business
that may never be recouped.
To be successful in identifying competitor's strategies and
tactics, you must gather every bit of available data from sales
forces, outside consultants, market surveys, and trade
associations. For example, the data that you look at may include
pricing, promotion and advertising spending, new product
introductions, sales results, market share trends, packaging
innovations, key account management, service levels, and other
indicators of competitive activity in the marketplace.
The observance of competitive strategies and market tactics
can be the basis for understanding a competitor's objectives. Is
it simply profits and growth? Or could it also include
"owning the market," driving other competitors out of
the market, or being first in new markets and international
markets?
Understanding each competitor's behavior in terms of short-
and long-term objectives, strategies, and tactics will be
extremely important to survival and success, in business as on
the battlefield. And many of the marketing programs mimic
battlefield moves. Dividing competitive forces among different
markets, flanking attacks in weaker markets, direct frontal
assaults with spending, new products and pricing across all
market segments and product lines, and converting the enemy's
best soldiers to your own company forces are all examples of
tactics that may be open to you.
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Small Company Intelligence Tactics
- Visit your direct competitor's stores,
customers, suppliers, convention booths, and
sales personnel.
- Gather secondary data on the competition
from trade associations, publications,
conventions, customers, and your own sales
force.
- Make a short list of possible competitive
strategies and tactics for the current year,
and your retaliatory strategies and tactics,
including situations to which you will not
respond.
- Analyze your competitor's products
regularly for improvements, weaknesses, and
quality trends.
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