Assignment 01: Introduction to Business Strategy

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Strategic Analysis for Healthcare

Chapter 3

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Competitive Analysis

The Strategic and Competitive Intelligence Professionals association advocates that there are five stages in what it calls the “intelligence cycle” (Weiss 2002):

Planning and direction

Published information collection

Primary source collection (personal interviews)

Analysis and production

Reporting and informing

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Competitive Analysis

There are four potential types of competitors (Weiss 2002):

Organizations offering the same or similar products and services now

Organizations offering alternative products and services now

Organizations that could offer the same, similar, or alternative products and services in the future

Organizations that could remove the need for a product or service

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Competitive Analysis

In addition to studying the target organization, strategic analysts need to monitor other organizations and study the overall business environment in which the organization and its competitors operate.

The ability to adapt to a changing environment before competitors do can be the key to a significant competitive advantage.

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Competitive Analysis

There are five basic issues involved in conducting your own competitive analysis.

First, what are you looking for and why?

Second, what limits are there on your research?

Third, where might the necessary information—which in the field of competitive intelligence is called data—be located?

Fourth, having at least initially determined where that data may be located, how do you get it?

Fifth, once you have it, how do you make sense of the data so you can use it?

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Competitive Analysis

What Are the Limits on Your Organizational Research?

Limits on your research can be many and varied. Constraints to consider include the following:

Just how much time can you devote to this research? The time is a function not only of your schedule but also of the importance of the intelligence that you could produce.

What kind of resources do you have available? In other words, how much money can you spend; how much help can you get from others within your organization; and do you have an outside research company you can turn to for assistance?

How might the calendar limit your research? Your deadline may be an important constraint. Remember, a pretty good answer that arrives on time might be better than a perfect one two weeks later.

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Competitive Analysis

The legal and ethical limits on competitive intelligence deal mainly with how information is collected.

One should not steal materials from a competitor,

misrepresent for whom one works,

pretend to be a student doing a paper, or

take any of a number of other dubious, even if not technically illegal, steps.

Note that most of these issues actually fall within the realm of ethics, not the law.

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Competitive Analysis

The only legal regime directly applicable to competitive intelligence is the Economic Espionage Act of 1996.

This act deals with the theft of trade secrets.

If you come into possession of a trade secret of a competitor, the safest thing to do is to immediately contact your employer’s attorneys, bring them all the materials that you may have received accidentally or otherwise, and let them handle the situation.

As a student you are unlikely to run into this issue.

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Competitive Analysis

Where Might the Data Be Located?

One way to start your research is to determine where similar data about your own organization is located. Having found where your company’s data exists in the public domain, or at least where it is accessible to diligent research, you are better prepared to find similar data on your competitors.

You should first determine the most likely place that the exact data you need could be.

Do not be limited by considerations of whether you have the ability to access that location.

Rather, you are trying to understand where the data originates so that you can then determine, or at least estimate, how it moves from the original source to other places.

These other locations may be within the competitor or outside the company. They may be employees, consultants, customers, suppliers, catalogs, surveys, and so on.

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Competitive Analysis

Getting the data, as we have stated, requires having at least some idea where the data might be located.

Generally, you should start collecting secondary data before moving onto primary data (i.e., interviews and the like).

The secondary data will provide you with a historical look at the subject or target.

The secondary data should be reviewed for the names of individuals and organizations that you, or someone working for you outside your firm, may wish to contact for further information. This review can often lead to experts quoted in an article, an executive of a competitor who is no longer there, a supplier, or even a regulator.

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Competitive Analysis

The Internet should be viewed as a tool for obtaining data but not as the source for all your data.

You can usually get information faster from secondary sources on the Internet than you can otherwise.

Business and social networking groups can help you identify and contact potential interviewees.

For example, if you are trying to identify someone who is an intern at a particular company, a Facebook or LinkedIn page might be useful.

Business networking pages can help you identify not only individuals for possible contact but, more importantly, individuals who formerly worked with the target. A former employee may not always have current information, but she almost always has information that is more valuable than that found in dated print sources.

Do not forget to look within your own organization. Ask if there are people who formerly worked at a competitor who now work for you.

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Competitive Analysis

How Do You Make Sense of the Data So You Can Use It?

Once you (a) have run out of time, (b) have run out of budget, or (c) are being referred back to previous sources by individuals you interview or try to interview, you have “closed the loop.” This point usually marks the end of well-conducted research, whether or not you have all the data you need.

Arrange your materials by topic, such as sales and marketing, production capabilities, personalities, and so on.

Now, put aside your research materials. Start writing what you think you know about the target, based on what you knew before you started your research. Put down your initial thoughts even if you believe your preconceptions have been contradicted or undercut by what you’ve learned.

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Competitive Analysis

Next, write out what you have learned from your research.

Clearly identify things that are certain—confirmed facts—and distinguish them from your conclusions or inferences.

Try to stand back from your research and look at it through someone else’s eyes.

If you don’t have someone else working with you, the best you can do is to try to break through your own preconceptions, adopt a perspective different from your normal perspective, or use some other method to force you to stand back and think openly.

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Competitive Analysis

A wide variety of analytical tools are available once you have organized your data and reached your conclusions.

However, you should select them only after you take a look at your data and conclusions.

Do not start assuming you will be putting together a Boston Consulting Group matrix or a SWOT chart.

Do not try to fit your facts and conclusions into one particular analytical model; rather, find a model that helps you deal best with the facts you have.

This book will provide you with multiple analytical tools.

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