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BUSINESS FORECASTING AND INNOVATION FORUM 2015 September 17-18, 2015 – Boston, MA

September 17, 3:30PM

Workshop Session: The Essential Competitive Analysis Methods and Tools

Exploring multiple methods and tools to support the ongoing intelligence needs of your organization

Craig Fleisher – Chief Learning Officer (CLO) at Aurora WDC

Craig is focused on how to enhance and lead insight-related activities in business; developing the sense making/giving culture, capabilities and processes that result in superior analysis, actionable decisions and market/stakeholder success.

For more than 25 years, his thought-leading expertise has been heavily cited in leading intl. media, publications and shared globally with many associations, public bodies, think tanks, as well as top companies including, among others, 3M, Bell, BHP, CIBC, EDS, ESSO, GE, GM, IBM, J&J, Labatt, Levi Strauss, Merck, P&G and TSX.

View presentation online at: www.businessforecasting2015.com

http://www.jpkgroupsummits.com/

http://www.businessforecasting2015.com/

The Intelligence Collaborativehttp://IntelCollab.com #IntelCollab

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The 12 Essential

Competitive

Analysis

Methods You

Need to Know to

Support Your

Organization’s

Intelligence

Efforts

Boston, MA: 16 September 2015Dr. Craig S. Fleisher

Business

Forecasting &

Innovation Forum



About Your Workshop Presenter

30 year background in CI, Meritorious awardee, SCIP Fellow, Thought-leader

Former SCIP President, CI Foundation Chair, Jnl of CI & Management Editor, Member of 6 editorial boards, local CI chapter chair

Teaching exec/MBA courses at universities in AU, CA, CH, CN, EU, FI, FJ, JP, NZ, SL, UK, US, & ZA among others, etc.

Former B-school dean, Univ. Research Chair, Prof. of Management, MBA/eMBA Director

Advise many top organizations globally

Author of >12 books, >100 scholarly articles

Best known for intelligence analysis, PA, PM



Two Parts

1. The 12 essential competitive analysis methods

2. We’ll work together applying what we just covered

Agenda



Opening Exercise

Write down 3 business problems your CI efforts are needed to address (one sentence each, in ? form):

______________________________

______________________________

______________________________.


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“Intelligence analysts

inspire the future &

define reality for

decision makers --

whose actions could

alter it.”

Why We Perform Analysis



Intelligence Analysis ComparisonWhat It Is What It Is Not

Original insights that answer “What? So what?

Now what? What then?”

Banalities, Regurgitated answers of how and

what your clients already know

Rigorous application of art, science & craft Black box process, dark science, gut instinct

Deliberate conversion of data/information,

decomposition and synthesis

Forwarded/Raw clips passed along, re-

composition and lists

Focused on meeting a client’s needs Focused on making us look busy to others

Mission-driven, detailed, deep, cybernetic Data-driven, simple, shallow, single-looped

Done collaboratively, uses networks, shared Genius @ a desk, hoards data, black hole

Future-focused, dynamic, looks over the

horizon and around the corner

Reporting history, static, looks at the present

and extrapolates linearly

Facts, Perceptions, Beliefs, Experience,

Assumptions, Projections, & Synthesis

Speculation, Rumors, Guesses, Unfiltered,

Biases, Additive, & Mashed Together

Human judgment and technology Human judgment or technology

In the realm of probabilities, relatives, options,

justifications

In the realm of certainties, absolutes, one

answer, assertions


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Stakeholders

Competitors

Customers

Suppliers

Partners

Counter-Intelligence

IP Protection

Security

Raw Data & Info (flters) Analysis Processes (channels) CI Products/Services

Inputs Outputs

Secondary

Research

Primary

Research

(HUMINT)

Technology

Industry

Markets

Opportunities

Threats

Real-world CI Process



Today’s solutions are successful in accessing business and competitive data, and making it available to users, however…

…today’s solutions are not so successful in directly linking information to action, and

deriving its corresponding value.

That is where the effective analyst comes in…

the gapData

Action ValueInformation

Analytical Fitness:Focus on Closing the Gap



Moving to 3rd Generation AnalysisFactor 1.

Classical Analysis

2.

2nd Gen Analysis

3.

Analysis 3.0

Expertise

Aggregation

Individual Expertise

Done mostly in silos

Collaborative

Socialized

Integrated

Managed networks

Thinking Style System 1 predominant,

Geniuses behind desks

Some System 2 applied

Improved, tailored solutions

Asks better questions, fuses

human judgment +

computational power

Methods Range 6-10 MBA type methods

(SWOT)

Extrapolation, Descriptive

24-36 BCA methods

(Wargaming)

Probabilistic, Explanatory

100+ on-demand, P/S, frames

Explanatory, Predictive

Structure+

Organization

Mostly un-structured analytics

Bolted on to existing function

Semi-structured analytics

Supports specific function (-s)

Agile, Structured analytics

Hub and Spoke, Disbursed

expertise

Tasking Mechanism Client requested (mostly pull)

Convenience, analyst-driven

KITs (some push), calendared

Client and analyst-driven

365x24x7 push + pull, OODA

loop, Mission-driven

Input Sourcing Manual, library/info specialists Some automation & networks All networked & crowd-sourcing

Tech. Support Tools Files, notebooks, batch

computation, libraries

Dynamic spreadsheets, desktop

databases, adapted IS

Modeling, data-mining, mach.

Learning, customized solutions

Media Forms Used 2D, text-heavy, static 3D, digitized, tagged Real-time, dynamic visualization

Initiatory Process Reactionary, as-needed basis Some proactivity +on demand ABI, real-time analytics

Analyst’

Development

“Weakened” warriors, surviving T&D plans, improving Analytically Fit, innovating



Self-Diagnosis:Where are You?

Looking at the last slide, assign a score of 0-3 for each of the 10 factors.

Calculate the average scores across all 10 factors to gauge your unit’s competency level:

0-.8: Lagging Analysis Unit

.8-1.7 Among the Typical Analysis Units

1.8-2.3: Analysis is a Potentially Valuable Organizational Competency

2.4-3: Analysis Practice Leader



Technique

1. BCG Portfolio Planning 7. Product Life Cycle Analysis

2. Competitor Analysis featuring the

4 Corners

8. Scenario Analysis

3. Driving Forces Analysis 9. STEEP Analysis

4. Financial Statements & Ratios

Analysis

10. (Actionable) SWOT Analysis

5. Industry Analysis featuring the 5

Forces

11. Value Chain Analysis

6. Issue Analysis 12. Win Loss Analysis

Agenda: The 12 Essential Analysis Techniques



Apple Inc. is a spectacular success and reached an unprecedented market value of over USD$700b in 2012

It is a global, diversified corporation with well-known, category leading products

Like most corporations, some of its business units are growing, some shrinking, some lead, some follow

Applying the BCG growth/share portfolio matrix to Apple Inc. can shed light for the analyst on Key Intelligence Questions (KIQs) about its investment priorities, strategies and tactics.

Case 1: Applying the BCG Portfolio Planning Analysis Matrix to Apple



10x 1x 0.1x

Dogs: Low Market Share / Low

Market Growth (Apple Example:

Apple retail stores, iMac/Mac)

In these areas, the market presence of

the business is weak, so it's going to

take a lot of resources to generate

headway. The business does not

experience the scale economies of the

larger players, making it difficult to

generate profits. Low market growth

compounds the problem, meaning that

a major innovation or turn-around

strategy may be in order for the unit.

Stars: High Market Share / High

Market Growth (Apple Example:

iPhone)

Businesses in this cell are

established and the growth

occurring in this market space is

promising. There should be some

strong opportunities to make

further investments and resource

allocations to these SBUs, and

business leaders must be decisive

and act effectively to realize them.

Cash Cows: High Market Share /

Low Market Growth (Apple

Example: iPod, iPad, iTunes)

Businesses in this cell are well-

established. They have an easier

time and more resources available

for making the most of new

opportunities. Nevertheless, since

the new opportunities in these

slow-growing markets are likely to

be limited, some resources should

be allocated to opportunities where

the growth potential is higher (see

Stars).

? / Problem Children: Low Market

Share / High Market Growth (Apple

Example: MacBook Air, AppleTV)

Most companies have at least a few

questions marks, and these are the

SBUs that are often most important for

competitive analysis. These are the

opportunities that aren't generating

much revenue right now because

market share remains small, but the

potential to be a great success is there

due to the high growth in the market.

The BCG Matrix Applied to Apple



Costco Wholesale is the market leader in the North American wholesale clubs industry

Its top competitors are BJ’s Wholesale and Sam’s Club, a division of Wal-Mart

Applying the Competitor Analysis, and particularly using a method called Four Corner’s analysis, can shed light on its capabilities, limitations, strategies and tactics

Competitor analysis can help the analyst address a variety of common “Key Player Profile” KITs and KIQs

Case 2: Applying Competitor Analysis feat. the 4 Corners to Costco

• Selling fewer items increases

sales volume and helps drive

discounts.

• Costco's focus on driving

sales also helps explain why

it offers better pay and

benefits than competitors.



Identify competitors future plans and strategy

Predict companies likely reactions to yours and other rivals’ competitive initiatives

Determine the match between a competitors strategy and its capabilities

Understand a competitors weaknesses, resource gaps, blind-spots, and/or vulnerabilities

Overview: Main Objectives of Competitor Analysis/Profiling feat. the 4 Corners

Competitor Insights Profile

Drivers: Goals and Objectives

Current Strategy

Capabilities and

Resources

Assumptions



A form of electronic commerce that allows consumers to purchase goods over the Internet, on-line business to consumer (B2C) retailing is one of the fastest growing global sectors.

Already over USD$250b in the US alone, the industry has grown in double digit rates since its founding only about 2 decades ago.

Major companies like Amazon.com, Apple.com and eBay are revenue leaders.

Traditional “bricks and mortar” retailing has taken the brunt of share losses from online retailers.

Even online retailing is being impacted by the rapid growth in mobile commerce.

Case 3: Applying Driving Forces Analysis to On-line B2C Retailing



Time-tested concept based on industrial-organization economics

Industry analysis helps the analyst understand the forces economically impacting an industry and its participants

Provides the context about the markets within which businesses directly compete for customers

Supports the development of competitive actions to cope with and, ideally, influence or change the forces in favor of the firm.

Overview: Main Purposes of Industry Analysis



Case 4: Applying Industry Analysis to the Quick Service Restaurant (QSR) Industry

Quick service restaurants (QSRs) conveniently and consistently offer tasty food at lower prices

Industry leaders include McDonald’s, Subway, Burger King, KFC & Pizza Hut

Large segments in Asian, Bakery, Burgers, Pizza, Sandwiches, etc.

Presence of strong global brands, customer loyalty, consistent quality and service

STEEP trends help (convenience) and harm (health consciousness) the industry



Overview: Main Objectives of Driving Forces Analysis (DFA)

Understanding DF’s is the first step toward establishing a framework for analyzing critical trends, especially as they impact the competitive environment facing an industry

DF’s indicate the external factors likely to have the greatest impact on a firm and its industry in the near future

Understanding DF’s help decision-makers understand what changes an organization needs to make to constructively address the driving forces of its competitive ability



Case 5: Applying FR&SA to UnitedHealth Group



Overview: Main Objectives of FR&SA

Financial ratio and statement analysis (FR&SA) is used as a tool for providing critical insight about a company’s financial condition and future competitive ability.

Information can be obtained very quickly, especially for publicly held companies.

Information is usually freely available, reliable and requires a relatively low investment to perform analysis.

Can compare a company’s performance with it’s past performance and identify trends.



Founded in 2004 and headquartered in Menlo Park, California, Facebook, Inc. is a large social networking website. With over USD$5b in 2012 revenue, it offers advertisers a unique combination of services including a timeline, news feed, messages, lists and mobile apps.

As the company quickly grew, it faced a variety of external challenges, some like privacy concerns, child safety and censorship became “issues.” Many of these issues are listed and described in some detail at: http://en.wikipedia.org/wiki/Criticism_of_Facebook

Already facing increased competition from formidable rivals like Google, and losing popularity among the teens that powered its early growth, government policy makers and regulators in many countries have put the company in their sights and want to restrict its discretion to operate.

Case 6: Analyzing Facebook’s Issues

http://en.wikipedia.org/wiki/Criticism_of_Facebook



Overview: The Main Aims of Issue Analysis

Issues are controversial inconsistencies caused by gaps between the expectations of corporations and their stakeholders

Issue analysis aids in the firm’s management efforts by enabling managers to anticipate changes in their external environment and to become more pro-active in shaping their external environment through their influence on public policy. It is a key part of issues management

Issues management is a process by which organizations identify issues in the stakeholder environment, analyze and prioritize those issues, develop responses to the issues, evaluate and monitor the results



Research in Motion was founded in Waterloo, ON in 1984 by Mike Lazaridis

He wanted to commercialize Budgie, a system that wirelessly displayed information on a TV screen

The company became synonymous with mobile data at the turn of the century.

Today, it is named after its famous device and struggles to regain traction in a competitive market with rivals that want to leave it behind.

Case 7: Applying the PLC to the Blackberry Smart Phone



Product life cycle (PLC) analysis describes the evolution of sales as a function of time.

The model asserts that similar to living organisms, products [i.e., classes (soft drinks), brands (7Up), or forms (diet colas)] pass through 4 stages during their life.

Stages: (pre-Intro/NPD), Introduction, Growth, Maturity, Decline.

Overview: PLC Analysis



Founded by Bill Gates and Paul Allen in 1975, Microsoft is one of the most successful computing-industry companies of the last 3 decades.

It has seen 3 major shifts occur, all of which it successfully navigated from the front: 1) MS-Dos, 2) Windows, 3) Office Suite.

Today, it faces a new breed of challenges and rivals, from large rivals like Google, Linux, Apple, open sources, the cloud, and its own momentum.

What will the future look like for Microsoft? Will it still lead in 10 years?

Case 8: Future Scenarios for Microsoft



A scenario is a detailed, consistent description of what the future may look like and is based on a set of assumptions that are critical for an economy’s, industry’s, or technology’s evolution.

Scenario analysis is a structured way of developing multiple scenarios that address two common decision-making errors —under-prediction and over prediction of change.

The overall purpose of scenario analysis is to build a shared baseline for strategic thinking and provide strategic early warning.

Overview: Scenario Analysis



Case 9: STEEP factors affecting Walt Disney World

• Social: Woman having less kids, aging population, “coolness” factors

• Technological: High use of virtual reality, more integrated experiences

• Economic: Less discretionary spending during recession, loss of some pricing power, cheaper labor

• Ecological: sustainability needs, warming weather patterns

• Political: Need to stay “neutral,” revenue generation potential of parks, large employer with many voters



• Social, Technological, Economic, Ecological and Political/legal (STEEP) or PEST (Political, Economic, Social, Technological – sometimes referred to) factors

• Aspects of the environment that can affect the competitiveness of industries and firms within them.

• These factors are considered to be beyond the influence of an individual firm.

• Used in monitoring, scanning and supporting most business or strategic planning exercises.

Overview: STEEP Analysis



Case 10: A Better SWOT Analysis for Whirlpool


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Overview: A Better SWOT Analysis• SWOT stands for strengths, weaknesses,

opportunities and threats• It is based on assumption an effective strategy

derives from a sound “fit” between a firm’s internal resources and its external situation

• A Better SWOT Analysis is systematic, actionable

Numerous environmental

opportunities

Highly favorable situations in

a firm’s environment

Major environmental threats

Highly unfavorable situation

in a firm’s environment

Substantial internal strengths

A resource advantage relative

to competitors and the needs of

markets the firm serves

Critical internal weaknesses

A limitation/deficiency in one

or more competencies relative

to competitors



• Lowe’s Company, Inc. is headquartered in Mooresville, NC.

• It is a home improvement retailer that has stores throughout the US, Canada, & Mexico.

• Lowe's is enjoying easing pressure as the NA housing market slowly improves. Steady price increases are a good sign of a recovery in housing.

• It returned (in 2013) to offering what it says are permanent low prices on many items across the store, instead of fleeting discounts. Will its margins improve?

Case 11: Lowe’s and the Value Chain


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Value chain analysis (VCA) is a method used to identify a firm’s potential sources of economic advantage by reviewing its internal core competencies in light of its external competitive environment to achieve optimal resource allocation.

Source: Porter, M. (1985): Competitive Advantage.

The Free Press, NY

Overview: Value Chain Analysis



• A major B2B product manufacturer, that had historically outsold the competition, began to notice a steady dip in their proposal win rates.

• As the company’s executives explored why this was happening, they sensed that they were missing the mark in their pursuit efforts. This contrasted sharply with what execs were hearing from their pursuit teams, who shared that they were simply getting “beaten on price.”

• How can they get the real scoop when Sales says 1 thing, Marketing another, and District Managers a third? How can they turn their sales rates back around and re-capture their market leadership?

Case 12: B2B Win-Loss Concerns



• Cost effective, insightful, and ethical method for gathering information about your market, customers, and competitors.

• WLA identifies your customer's perceptions of specific sales situations and how you compared to your competitors.

• The analysis provides information about the performance of both your firm and your competitors.

• This information can then be used to focus sales staff more effectively in the marketplace and also to inform research and development of products.

Overview: Win Loss Analysis (WLA)



ClosingExercise

1. Think about these 12 methods.

2. Identify 3 KITs/KIQs you are currently facing.

3. Match up one of the intelligence methods to that KIT/KIQ and consider how it might help you derive new insights.



Summary: About The Mastering Intelligence Methods (MIM) Series

• 12 essential methods

• Short video introductions

• Narrated slide decks

• Connections to KITs

• Practical applications

• How to apply the method

• End-of-Course Learning Assessments (Quiz)

• Find it at http://intelcollab.com/intelcollab-courses/

http://intelcollab.com/intelcollab-courses/



Your Presenter:

Dr. Craig Fleisher

Dr. Craig S. Fleisher is Chief Learning Officer and Director, Professional Development at Aurora WDC.

Connect with Dr. Fleisher via:

Web: http://IntelCollab.comEmail: [email protected]: http://twitter.com/CraigFleisher

Aurora WDC is a leading advisor and partner to organizations of all kinds worldwide on matters related to intelligence in business.

Learn more and follow Aurora WDC via:

Web: http://AuroraWDC.comEmail: [email protected]: http://twitter.com/AuroraWDC

http://intelcollab.com/

mailto:[email protected]

http://twitter.com/CraigFleisher

http://aurorawdc.com/

mailto:[email protected]

http://twitter.com/AuroraWDC

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