Stop now and start learning about the competition

<p>"In business, the competition will bite you if you keep running; if you stand still, they will swallow you.”</p><p>--William Knudsen Jr., Former Chairman, Ford Motor Company</p><p>Earlier in our discussion of “strategery,” we addressed why it's important to focus on your company’s core competencies.</p><p>We deferred a detailed discussion of the competitive landscape until now, but it’s equally important to understand your competition so that you can maximize your competitive advantage.</p><p>One of the approaches that many middle-market companies overlook is the value of competitive intelligence. It probably sounds like another consulting term, but it only means the process of gaining information about your competition. </p><p>Professional sports provide great insights into the critical value of knowing, not just studying, the competition. Yes, they have game films and if we could get that level of competitive intelligence, the task would be far easier.</p><p>But, professional teams are also statistical fanatics and carefully pore over reams of data about their opponents – the competition. In the NFL, they study the weather, the type of field – artificial or grass and what kind of each – and the expected field conditions, all of which drive everything from the game plan to the type of spikes the players will wear.</p><p>How far do they have to travel? When do they leave to minimize fatigue from jet lag? If this seems a stretch, seek out the story about Stanford’s new football coach, Jim Harbaugh, whose team now leaves a day earlier for East Coast games, setting their watches to the local time so their practices will occur in the same pattern as the actual game.</p><p>We could easily find similar situations in basketball and baseball.</p><p>A few armchair analysts were recently discussing Brady Quinn, the highly touted Notre Dame quarterback drafted by the Cincinnati Bengals. Earlier, he told a sportswriter that he fully expected to be the starting quarterback, but soon thereafter, Coach Marvin Lewis told the press he hadn’t chosen a starter yet between the two veterans but that Mr. Quinn was not a candidate. What happened?</p><p>Although Mr. Quinn was drafted as the future leader of the Bengals, a thorough competitive assessment was his undoing. It turns out that every single opponent that Cincinnati is scheduled to play in the first six games of the season is among the Top 10 defensive teams in the NFL. So, while his core competencies are impressive, he’s not ready to play against the well-defined competition.</p><p>Again, it’s true that these teams have access to a lot of readily available information. You might be able to uncover similar data if you’re competing against a public company. But for most of us, our private company competitors aren’t handing out programs or playbooks.</p><p>It’s the analytical rigor applied by professional sports teams that’s the lesson to be learned here. It’s not enough to say “easy for them, impossible for me.” If, for example, your competitors have public facilities such as stores or restaurants, “shopping” them is critical, as any retail executive can tell you. </p><p>Today, with virtually every company sporting a comprehensive Web site, a careful review of the information there can also be revealing.</p><p>My competition is always cutting its prices. That’s absolutely the first thing that most businessmen will identify as to why they aren’t doing better against their competition. But does your competition also achieve timely delivery? Superior quality? Extraordinary service? Unique services or products? </p><p>You can’t gloss over these with easy answers. You’ve got to dig deep and carefully examine each element of your competitors’ business that represents a feature that your customers are seeking.</p><p>Here’s a great place to start your research – talking to your customers. Why don’t you choose us as your preferred supplier? Why don’t you choose us more often? What can we do to become your key supplier? Don’t stop if they say “lower your prices.” Drill down to learn more.</p><p> What if we keep extra inventory so you can shorten the purchasing cycle and hold less in inventory? What if you had more time to pay? What about quantity discounts to encourage larger volume? Are you experiencing other frustrations like a cumbersome ordering process or a restrictive credit policy? How are quality or delivery problems resolved?</p><p>These are the kinds of question that can stimulate a hearty discussion with your customers and reveal a lot about your competitors. If you try this with just 10 customers, I believe you’ll discover that there’s “treasure in them thar’ hills.” </p><p>In the worst case, you’ll rejuvenate your relationship with your customers. On the plus side, you may learn a lot about the competitive landscape. Resolve right now that you’ll try this over the next two weeks. Drop me a note, too, and let me know about your success so we can discuss it in a future column – no names, of course. </p><p>In the next column, we’ll talk further about the competitive landscape and why it’s important to extend your analysis to other economic, market and industry data. Remember, your principal mission is to gain a competitive advantage so that your business can prosper and grow. </p><p>•••</p><p>Lary Kirchenbauer is the practice leader for the Business Advisory Group of Moss Adams LLP in Santa Rosa, www.MossAdams.com. He can be reached at 415-602-7870 or Lary.Kirchenbauer@MossAdams.com.</p>