- The Increasing Need for Effective Analysis
- Concluding Observations
This chapter is from the book
This chapter is from the book
This chapter is from the book
Concluding Observations
As stated earlier, all 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 a dozen demonstrated methodologies to help you move faster and better along your path.
This book describes 12 of the more well-known and heavily utilized analytical techniques for business, competition, environment, and markets. They are designed to assist any businessperson who needs to develop insights and make sense of strategy in the larger business environment. This book is based on our many decades of knowledge, skills, and experience in consulting, practicing, teaching, and researching how business and competitive analysis is used. It is applicable to all types of enterprises, whether public or private, giant, medium, or small.
This book’s premise is that businesspeople working in any environment must have a robust and healthy selection of tools and techniques to help them address important issues and answer important questions about their enterprises’ abilities to compete—not only in the present, but also in the future. Unfortunately, we have seen far too many instances where a limited set of tools was used and competitive insights were in short supply. Much like the tradesperson who has only a hammer, they’d better hope that everything they work on involves nails!
Uniquely, this book focuses specifically on analysis. It is not designed to be another business management or strategic planning text. At the same time, we must admit that the processes and techniques described here certainly can benefit strategic planners and managers. Plenty of good books on these topics are available; we routinely reference many of them ourselves. What surprises us, though, about competitive and strategic analysis is the limited number of tools and techniques most businesspeople use 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 used incorrectly but also because they are misunderstood or misapplied. Even 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 or sense-giving challenges.
This book provides instruction on a dozen tools and techniques, evaluates each technique’s strengths and weaknesses, and outlines the process used to actually employ the technique. It also includes sample applications, resulting 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 or lacks appreciation of the art of analysis. The analytical challenge for businesspeople today is more daunting than ever for a number of reasons:
- Pressure for a quick judgment. Competitors move 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, it is always in short supply. Decisions are often made on the basis of what you currently know because the situation simply does not allow for delay. Therefore, 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 or process enhancements, consumer responses to competitive tactics, and so on. Researchers have studied these types of interjections. They have figured out that ambiguity can be a potent barrier to competitive imitation and can allow 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 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 attack 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 opportunities or 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 its market sense-making and sense-giving objectives.