Source | Yuval Atsmon..com | BY:. Yuval Atsmon
– Business strategy is all about using uncertain information to make unalterable choices that best create and capture economic surplus. A successful strategist must find and exploit opportunities that establish and protect a sustainable advantage. Otherwise, the economic surplus will be snatched up by other industry players such as competitors, suppliers, channel drivers, and customers.
This is about beating the competition as military strategy most vividly demonstrates. It doesn’t mean you need to become the No. 1 player to succeed (although such a goal can inspire organizations more than a profit target), but you must be better at something so that you can offer the best value to a defined set of potential customers.
It used to be quite clear who the chief rivals are in most industries, but companies now have an increasing variety of unique competitors, making the playing field harder to define. It is easier if the competitor is a sleepy incumbent, especially if it needs to decide whether it should disrupt itself or hold on to the current business model. But if you are the incumbent looking to fend off attackers or are facing fierce competitors, beating them is easier said than done.
With all this in mind, you would expect to see boards and management teams collecting and analysing competitive data, spawning insights that guide every strategic discussion. Think again. My experience suggests management is inwardly focused, and the effort to study and anticipate competitors’ moves is remarkably superficial.