Defeating enemies, not based on what we do but knowing what others plan to do. Understanding the opponent's move and acting before he moves, create leaders.
Our complex business world is like ancient war zones where uncertainty is everywhere. Becoming a trend-setter and keeping his own business ahead of the competition is the ‘dream’ of corporates. This willingness to be ahead of all mostly goes with hasty decisions where the competition en-cash it. That’s why we have strategy meetings where leadership and executive committee members decide the next course of action. Even to achieve a ‘vision’ we need a stronger and agile strategy.
Looking beyond the obvious is the perception of leadership, where each imaginary action of competition and new entrants in business is reviewed. Prior period data is helpful to take tactical moves but strategic level decisions can change the course of organisation behaviour. Thus, more understanding of traits and character of competition help plan, position, and aim, which is part of strategic decisions.
It's not just about what I am planning, but more important is what my competition planning.
Knowing the opponent’s actions and preparing to oversell is part of the strategy. And the other end of strategy is our ‘planned action’ or ‘ploy’ to keep ourselves ahead.
Understanding competitor’s actions can be explained by taking an example of revenue meetings or sales strategy meetings where the discussion is ‘what we are going to do’ to penetrate the market or improve the product price. There is seldom discussions about ‘ how competition is going to react in the similar business environment’ and what are we going to do about it.
A tactical decision is taken mostly in such meetings, which is short-lived as competition tracks it on a daily basis. The operational impact of such tactical decisions once magnified becomes a base for strategy at a larger end or organisational level.
The revenue teams keep track of the competitor online-pricing regularly and adjust the pricing to maintain an edge. In hotels, being the dynamic pricing is used extensively, which makes a regular review of competitors’ online product prices crucial since the data trend can predict their strategy.
I base our example on ‘online room rate pricing’ of hotels A, B, C, and D. The Revenue Manager of Hotel-A want to understand the ‘thought process' of other competitor hotels to manage online pricing. To get the answer, he tracks online room rates of Hotel-B, Hotel-C, and Hotel-D. He recorded all the data for 9 consecutive days in a month. And, the table start showing the trend.
This data reveals that Hotel-B always follows the rate of Hotel-A by maintaining a lower rate by 3% to 5%. Hotel-C’s daily rate is out of trend which means having its plan and not worry about competitors’ strategy. And, Hotel-D maintains rates over Hotel-A so we can take it as Hotel-A follows Hotel-D rates.
This explains that Hotel-B follows the Hotel-A rate, and Hotel-A follows Hotel-D, which is in a leading position. Now the team of Hotel-A can build the strategy to come up to a leading position or just maintain a follower position.
It is very important to understand the thought process of Hotel-C, their reason for staying away from competitors. Best guess in this would be a simple reason of its superior product or agile sale team. Also, Hotel A can find out its position which is mostly 3rd in competitor-set. The strategy aim can be to reach position number 2 in a few months. Knowing a position is necessary to make the next move which can be defined by introducing a ‘strategy’.
Strategies in the business world are to provide sustainable profitability
A popular myth; that by improving the systems & processes, we can improve efficiency but not strategy. Fact is that strategy is as important as the basis of a strategy is to defeat the competition. Getting business flow in our favour, even in adverse situations, and maintaining the upper hand on competition is the aim of strategic thinking.
Many factors impact the strategy. It can be political, technical, legal, social, or environmental. Each factor has a consequence, and that’s where we need a plan which can manoeuvre easily.
Where we are, where we want to be, and how to get there is the core of being a strategist.
Planning a pattern to position with a perspective even using ploy.
Comments