At its core, CI helps reduce uncertainty for company leadership. In periods of little change or market disruption, this is a relatively direct task that mostly follows known competitors in known markets. During periods of turbulence and disruptions, as we are experiencing today, the task is quite difficult.
Through the past eight to ten years, the business environment has been mostly stable. While there have been significant disruptions in industries such as publishing, entertainment, information management, and retail, many other industries such as construction, logistics, law, transportation, and insurance went through most of the past decade functionally unchanged. The apparent lack of change belies the inexorable growth of the disruptors and their potential to completely change market dynamics.
When an industry is disrupted, established players face difficult choices. In the early stages of disruption, the threat is minimal. This is because the disrupter often has a product or solution that is “good enough” and meets the needs of a narrow, and usually price sensitive, market segment. In the classic path, the disrupter uses their market position to test, develop, and perfect product while gaining market share.
Often, the seeds of disruption are sown on market fringes by market newcomers. This creates a problem for CI professionals with limited time and resources to assess every new market entrant. If they focus on the key existing players, they may miss the disrupter’s growth. If they focus on the disrupter, they may miss key moves by the existing competitors.
The relatively stable markets of the past eight years seem to be ending. While many will blame the overall economic cycle, perhaps there is a different reason for the current levels of market turbulence. One potential cause is that the many disruptors have moved from “good enough” to “as good or better” in more and more industries. This places pressure on the entire market, requiring strategic changes for the existing players and forces CI professionals to rapidly adjust to the new realities.
CI professionals need to assess disruptive competitors before they take market share and change the rules of the game. Fortunately, CI units have tools to prepare for disruption and advice management. Two powerful tools well suited to these situations are Strategic Workshops, covering scenario planning and war gaming, and Market Monitoring.
Strategic Workshops are effective by putting participants in the competitors’ mindset. This allows CI professionals to model how a competitor will act in strategic situations and plan counter moves before the competitor acts. Using workshops when a new competitor emerges can help determine not only how much of a threat the new competitor is but also the strategy it will use to enter the market.
Market Monitoring is a second tool which comes into play once the competitor is identified. Building on strategic workshops results which identify key activities that signal a competitor’s actions, monitoring alerts the CI professional when to act.
We are entering what may be a period of economic slowing coupled with disruption and emergence of new competitors. Companies that fail to stay ahead of competition risk being disrupted by the new competitors. Fletcher/CSI works with companies to build strategy workshops and market monitoring programs that can help your company survive and make good decisions in this period of turbulence.
To learn more about how Fletcher/CSI can support you with strategy workshops and market monitoring, please contact us at [email protected] or (802) 448-9249