As we stated earlier, all of these factors necessitate good competitive insights. And good competitive insights require effective analysis. Successful business analysis requires understanding environments, industries, and organizations. This comes from, among other things, experience, solid data and information, and the proper choice and utilization of analytical techniques.
Today's businesspeople need to do a better job of making sure that the analysis they perform is based on sound, proven methodologies. Hopefully in the future you will master a core set of methodologies that will make the way you evaluate data and information more effective and more decision-relevant. At a minimum, after reading this book, you will know at least ten methodologies to help you on your path.
This book contains ten of the more well-known and more heavily utilized analytical techniques for assessing the external and internal organizational environments (refer to Figure 1.1) and is designed to assist any businessperson who needs to develop insights and make sense of the business environment. It is based on our many decades of experience consulting, practicing, and researching how business and competitive analysis is used in all types of enterprises, whether public or private or large, medium, or small.
Our underlying premise throughout this book is that businesspeople working in any environment must have a robust and healthy selection of tools and techniques to help them answer important questions about their enterprises' abilities to compete, not only in the present, but also the future.
Uniquely, this book focuses specifically on analysis. It is not designed to be another business management or strategic planning text; on the other hand, we must admit that the processes and techniques described herein can certainly benefit strategic planners and managers. There are plenty of good titles on these topics available in most bookstores, and we routinely refer to many of them ourselves. What surprises us, though, about competitive and strategic analysis is the limited number of tools and techniques used by most businesspeople and how little genuine insight results from them when they have scores of techniques at their disposal!
These adverse results occur not only because some tools are badly chosen, outdated, or incorrectly used but also because they are misunderstood and/or misapplied. Even those individuals who get a good business school education may not have had the appropriate contexts, instruction, experiences, or guidance in employing these techniques effectively to deal with "real-world" sense-making challenges.
This book provides instruction on a range of tools and techniques, evaluation of each technique's strengths and weaknesses, as well as an outline of the process used to actually employ the technique. It also includes sample applications, resulting overall in that vital ingredient—insight.
Being a businessperson in an enterprise facing a high degree of competitive rivalry is difficult, especially if an individual is inexperienced and/or lacks appreciation of the art of analysis. And the analytical challenge for businesspeople today is more daunting than ever for a number of reasons, including the following:
- Pressure for a quick judgment. Competitors are moving fast, investors and shareholders want the quarterly performance targets on time, customers want solutions yesterday—and nobody is willing to wait. Time is the most precious resource for businesspeople; consequently, time will always be in short supply. Decisions are often made on the basis of "what we know now" because the situation simply does not allow for delay. As such, you need to constantly seek established data collection and classification systems that can provide reliable outputs quickly. Businesspeople everywhere need to address the increasingly time-starved context within which they work and assess its ramifications.
- Highly ambiguous situations. Ambiguity comes in many forms. It can emanate from the nature of competition, the range of competitive tactics employed, key stakeholders' responses in a competitive arena, product and/or process enhancements, consumer responses to competitive tactics, and so on. These types of interjections have been studied by researchers who have recognized that ambiguity can be a potent barrier to competitive imitation and allow for a competitor to sustain an advantage for a longer period.
- Incrementally received/processed information. Rarely will you get the information you need in time and in the format you require. The inability of traditional executive information systems to capture, classify, and rank rumors, gossip, grapevine data, and knowledge held by employees out in the field means that you may lack the kind of primary source information that has always been the "jewel in the crown" element that makes analysis so valuable.
Excellent analysis is the key to successful business insights, and good insights can provide high-value, anticipatory decision support capability in contemporary enterprises. Insight about customers, competitors, potential partners, suppliers, and other influential stakeholders is a company's first—and often only—line of offense or defense. Maintaining this capability into the future requires business executives to exploit every opportunity to deliver analysis that is persuasive, relevant, timely, perceptive, and actionable.
Analytical outputs must provide the decision-making process with the essential insight needed to preserve an organization's competitiveness and highlight early warning signs of market changes. We expect that this book will provide you with some helpful guidance and assistance in delivering improved insights to support your organization's competitive endeavors and in achieving market sense-making objectives.