Competitor intentions and capabilities

Today I have been...


Reading about matching competitor intentions to capabilities (u2s5p69)


Why?


Required.


So What?


Steps to predict strategic behaviour:-

1. Understand your competitors' strategic intentions
2. Assess their capability to realise those intentions

Ways to understand intentions:-

• Pay close attention to remarks of top people in rival firms, eg in media, online and in annual reports - particularly the statement at the start and company mission statements.
• Consider how they react to competitive challenges (aggressive, co-operative etc)
• Look at the types of strategic threats they notice.

By evaluating whether your competitor has the means to carry out its intentions you can assess the seriousness of those intentions. Don't forget to consider potential new entrants from outside traditional industry boundaries. (p70)

It is your capabilities that allow you to transform inputs into outputs in a productive and efficient way, and the same is true of your competitors. Your capabilities will also decide your ability to serve other segments and create new ways to compete.

Different Segments->Different Capabilities->Different organisations

Studying firms' capabilities can help form a view of strategic groups - firms with similar capabilities can form strategic groups. This can help you identify strategic spaces and who is capable of moving into that space.

Many firms are now basing their long-term strategies on their capabilities rather than their markets served (Grant, 1996). Some potential competitors may have the capabilities to change the rules of the game.

Competitor analysis is more straightforward in case studies with limited information than in "real life". A big problem there is that you may have too much info and you will have to decide on how to limit what you study.

Do you understand the roots of competitive advantage?
Can you identify what the industry KSFs are?
How are you and your rivals positions relative to the KSFs?

Checklist for your own organisation:-

• Identify competitors
• What are their market strategies?
• What are the market segments?
• Which are being served by your competitors?

And your competitors:-

• What are their broad goals and intentions?
• What is their strategic vision?
• What do they believe are their KSFs?

And can they meet their intentions?
What are their key capabilities?
Do they meet the KSFs?
Do they have the resources to meet their intentions?
How easy/difficult would it be for competitors to meet the resource & capability requirements to meet the intentions?

Think hard about how you identify your competitors.