In this day in age, globalization and technology-driven innovation leave little room for companies to attain and sustain a competitive advantage. At times, first mover advantage is only good if one can stay ahead of competition, which is especially challenging during a time where many competitors are simply copying strategies and/or capabilities. We’ve seen it over and over again. Facebook copied Snapchat with their Instagram stories. Samsung and HP have copied Apple’s designs. In the airlines industry, Southwest Airlines has been dominating the budget airlines space, but now United, Delta, and American have recently started offering “basic economy” class. Sometimes copying works and it’s a reality of doing business. However, that’s a reactive environment. In Jim Fowler’s article in Entrepreneur, he contends that “winners set the pace, not the other way around.” The secret to outpacing your rivals is competitive intelligence. Use your competition’s “moves to drive your own innovation,” as opposed to just reacting by copying.
Companies are often inundated with data and it often takes a substantial amount of time to do analysis. However, now there are many affordable analytics tools available to help companies distinguish the “signal from the noise.” You don’t have to wait for the monthly or quarterly reports; analytics tools enable organizations to “keep your finger on the pulse with daily tidbits of competitive intelligence.” Companies are investing significant amounts of capital into business intelligence/data analytics tools. Boston University’s CIS study reported that business intelligence practices sparked worldwide revenue of $13.1 billion. Further, the study also showed that 54% of professionals felt that their companies would perform better if they made data-driven decisions.
Below are Fowler’s three tips on using data to stay ahead of your competition.
- Keep the skies friendly. Fowler states that it’s a much better use of your energy when you can take the competitive intelligence and use it to define your next move. Your competition doesn’t have to be your enemy. Instead, focus on value. What is your competitor missing? Ask yourself how you might differentiate yourself in the market place or how you might add more value to the customer experience.
- Follow other flight patterns. Not only are you keeping tabs on your competitors, but they’re likely keeping tabs on you as well. Fowler states that “you don’t want to get so caught up running your business that you forget to learn from [competitors.]” Further, he states that “gathering intelligence doesn’t always have to be about ‘reinventing the wheel.’” Perhaps you can look at it as a way to improve an existing product or “take it somewhere else in the future.” Again, focus on value.
- Stay open to alternate routes. Don’t get comfortable or you could end up being the MySpace of Social Media. Fowlers argues that “if you see an opening that a competitor might take, beat ‘em to the punch.” Don’t let complacency prevent you from seeing shifts in the industry.