Attacking the soft underbelly of your competitor

Competing against a rival’s strengths is a common-but-flawed strategy, says Ken Sawka, a partner at Outward Insights LLC, a competitive intelligence and strategy consulting firm. In a recent monograph he asks: “Wouldn’t it make more sense to marshal a company’s strengths and attack competitors where they are weak?”

He cites the example of Hewlett-Packard Co., which fared poorly when it tried to compete with Dell Inc. via direct Internet sales, but fared much better when it pursued a retail sales strategy (e.g., Wal-Mart and Best Buy), where Dell had no presence.

Sawka suggests three techniques:

  • Use competitor-analysis tools that go beyond basic Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis. Michael Porter’s Four-Corners analysis, for instance, can help company strategists assess a competitor’s intent, objectives and strengths; from there, you can identify a competitive strategy that maneuvers around the rival’s strengths, and that plays to your company’s capabilities.
  • Early Warning analysis that helps spot industry trends. Use that advance notice to to develop contingency plans. This way, strategists can spend less time being reactive and more time executing pre-conceived plans.
  • Broad industry analysis techniques like scenario analysis that can uncover present and future alliances (like HP and Best Buy) that create win-win strategies for partners and further weaken competitors.

What I like about this firm’s approach to competitive intelligence is that it’s forward-looking (“early warning,” “scenario analysis”) — to some degree a blend of competitive intelligence, strategy and futurist work.

I also like this firm’s tagline: “The Intelligence to Anticipate. The Strategy to Lead.”

Glossary of terms, including early warning, SWOT and four-corners analysis.

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