John Horn, Professor of Practice in Economics, discusses predicting competitors' moves. Topics include analyzing competitor behavior, using data to forecast actions, mindset for data analysis, and developing future-focused strategies.
Predict competitors' future actions by analyzing their past actions and assets.
Use data analysis to track competitors' R&D spending and product introductions for strategic preparation.
Deep dives
Understanding Competitive Intelligence
Competitive intelligence often involves predicting competitors' future actions. Organizations are sometimes caught off guard by competitors due to a lack of proactive prediction. Many businesses focus on what competitors have done rather than actively forecasting their future moves. Companies are frequently surprised by competitors' actions, dismissing them as irrational, but these decisions are often rational from the competitors' perspectives.
Key Elements in Competitive Insight
Competitive insight encompasses understanding competitors' actions, assessing their resources and capabilities, and considering the decision-makers' perspectives. By analyzing competitors' past actions and assets, companies can better predict their future moves. Strategic prediction involves evaluating who within the competition is driving decisions and is essential for informed competitive strategies.
Utilizing Data for Competitive Analysis
Data plays a crucial role in predicting competitors' future actions. Beyond historical data, organizations must collect predictive data to anticipate competitors' moves. Tracking changes in competitors' R&D spending, patent acquisitions, and product introductions can provide insights into their future strategies. By analyzing relationships between data points, businesses can proactively prepare for competitive shifts.
Preparing for Future Competitor Moves
To ensure readiness for the future business landscape, leaders should foster a forward-thinking mindset within their organizations. Encouraging discussions on future industry trends and potential scenarios can help employees anticipate changes. By considering various perspectives, including those of competitors and industry partners, organizations can better strategize for the evolving business environment.
John Horn discusses his book “Inside the Competitor's Mindset” and how to predict your competitor’s next move. John is Professor of Practice in Economics at the Olin Business School at Washington University. His global economics courses are informed by his nine years of work on competitive strategy with the Strategy Practice of McKinsey & Company. Listen for three action items you can use today.