DECEMBER 2017 / NO. 1
TAGS: VUCA, MICHAEL PORTER, FINANCIAL PLAN, WAR-MAPPING, INSIGHTS, MONARCH AIRLINES, AIR BERLIN

The five drivers of competitive readiness

“The essence of formulating a Competitive Strategy is to relate your company to its environment”, Michael Porter
“When you have created your Competitive Strategy, the essence is making strategic choices different from your rivals”, Michael Porter
These are Important quotes from Michael Porter, dating from some years ago. However, the essence of strategy has not changed and will not change during the coming decade! It represents the common understanding regarding the ever-changing competitive environment, and what the company’s response is to that. It represents your promise to deliver value to your customers, both now and in the future, in a way that no other company can do, in a world of VUCA. The results of competitive strategy are the financial plan, the budget and forecast. The financial plan deals with the company’s expected financial performance for future periods. The budget is the financial plan for the upcoming year, and the forecast simply reflects the actual performance in the year-to-date plus the expected performance for the rest of the year.
Five drivers which can improve competitive readiness
In our strategy and strategic intelligence practice we recommend the following five drivers of competitive readiness:
  1. Understand your rivals’ economics – think about the key driving forces
  2. Look forward, not backward – future potential competitive reactions are usually widely ignored
  3. Put yourself in the mindset of the competition – execute ‘strategic war-mapping’
  4. Synthesize events into threats and opportunities – who has a sixth sense for Gray Rhinos?
  5. Act more boldly – “know your enemies and know yourself and you will never be in danger”
Within the scope of our intelligence efforts we always show customers our “Intelligence Continuum”. This consists of four levels: Competitor Data Collection (1), Industry & Competitor Analysis (2), Competitive Intelligence (3), and Strategic Intelligence (4). For the insight and foresight regarding the listed five drivers to improve competitive readiness, which are listed above, only strategic intelligence can give you the crucial insights you need: the topics of strategic significance, strategic crisis, Black Swans/Grey Swans/Gray Rhinos, current decisions on scenarios, the blind spots from technology play-mapping and more.
“In October 2017, Air Berlin Germany ran into bankruptcy because of ‘the Management of Overconfidence’ and Monarch Airlines UK because of ‘the Management of Overestimation’”
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