The practice of monitoring your organization’s competitors is as old as time, and with good reason. Building an understanding of your competitors' core competencies, competitive advantages, and positioning can help inform your own strategy; but it should not define it entirely.
Too many organizations view competitor monitoring, and by extension competitive strategy, as a reactive, external looking discipline. In many organizations, competitor monitoring is delegated to marketing departments, who tend to place significant importance on external events while failing to correctly weigh their own organization’s abilities and competencies.
In truth, competitor monitoring, and the strategy that drives it, should begin much further up the organizational chart, and should incorporate a broad variety of perspectives from across the organization. Competitor monitoring should be driven by a long-term strategy and powered by technology that automates the time-consuming, manual work, freeing analysts up to spend more time on high-value tasks.
In many organizations today, the marketing function owns competitor monitoring. On first glance this makes sense: marketers are close to customers, always watching competitors, and generally keep up to date with the latest trends in the market.
But the reality is that competitor monitoring should not start and end with the marketing team and here are a few reasons why.
First, marketing is a very externally focused function. Most marketing departments spend a lot of time watching competitors, talking to customers, and making sense of trends, but very little time assessing internal capabilities and systems. Often, marketers input on competitive strategy is driven almost entirely by external stimuli, rather than an appreciation of their own organization’s core competencies and competitive advantages.
Secondly, marketers are incredibly influenced by the actions of the market they operate in. When new technologies and trends emerge, it’s often marketers who are the early adopters. In some ways, this can lead to early advantages over competitors. It can also be the case that marketers rush to adopt fleeting trends that don’t last remember Periscope and Meerkat?
When it comes to competitor monitoring and competitive strategy, this can create a pinball effect, where marketers chase short-term trends and competitor developments with no cohesive long-term strategy. Allowing your strategy to be dictated by competitors and the wider market is a losing plan. Organizations who do this will constantly be functioning in a reactive, defensive position, and are doomed to always be playing catch up and never leading the way.
Don’t get us wrong, marketers have a vital role to play in virtually every organization. They form close bonds with customers, drive new business, and help position the organization for long-term success. And of course, marketers should play an important role in competitor monitoring and competitive strategy. But leaders should weigh their views appropriately, and add them to more internally focused business units, including operations, research and development, and logistics.
Competitor Monitoring Driven by Long-Term Strategy
Instead of monitoring what competitors are doing and imitating these actions, organizations should instead flip the script, and focus on building a competitive strategy based around their own core competencies, understanding of customers, and competitive advantages.
Firms should embrace a dynamic approach to competitive strategy, one that outlines bold, long-term goals and works back in increments to envision the actions that need to be taken to get there. Dynamic strategies are flexible and can change in the short-term if the competitive environment demands it but are primarily built for the long-term. Organizations should embrace competitor monitoring to determine whether they should change elements of their strategy in the short-term.
Developing a dynamic strategy requires input from a variety of stakeholders, including both those with an external, customer-facing perspective like marketing, and those with a firm grip on the organization’s core competencies and strategic capabilities: teams like research and development, manufacturing, and logistics. Including such a diversity of views in the development of a competitive strategy ensures that everyone is bought in. Furthermore, it also provides confidence that the organization is developing an achievable, long-term strategy that they can work towards over several years.
For some organizations, this can be a painful shift, and it represents a lot of hard work. But time and time again, we’ve seen organizations that commit to a long-term strategic vision outperform their competitive set and deliver groundbreaking new innovations that wouldn’t have been possible with a short-term, competitor-driven focus.
While difficult, the shift can be made easier with support from the right technologies and frameworks.
Building a New Approach to Competitor Monitoring
Deploying the right combination of technologies and strategic frameworks can make a meaningful difference in how successful an organization’s shift towards a long-term focus on competitive strategy will be.
Many organizations' current approach to competitor monitoring is focused around manual tasks, and fails to incorporate technology that can significantly improve the process.
Organizations may want to consider a comprehensive competitive and market intelligence platform, like Knowledge360. Knowledge360 acts as an intelligence hub for the entire organization and uses sophisticated AI technologies to enable organizations to monitor, analyze, and act on competitor actions in real-time.