Understanding and Comparing

Competitive Positions

The Nine Key

Components

Nine Formulas for Competitive Business

Success

The Science of Strategy Institute

Understanding the competitive neighborhood and your place within it

Strength arises from unity and focus while outside perspectives expose reality

Competitive positions are relative and affected by deception so analysis is never done

Competitive Position

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

The Competitive neighborhood is the industry where you struggle to survive

You have specific, physical location, that is your competitive neighborhood.

Start from where you are

Know your current position at all times.

If your business were a book, where would we find it in the bookstore?

The Yellow Pages is another competitive neighborhood.

Survival starts with understanding your environment and how to use its resources.

Your competitive neighborhood is dynamic—continually changing.

It is both externally and internally unique.

Your business is part of a larger system

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

The marketplace and business climate are two side of the same coin

EARTH

Your marketplace is the source of your income

Your marketplace includes the customers you serve.

The marketplace for your business is your target market.

The marketplace is the world of transactions that affect the emotions

and attitudes of customers.

Your marketplace consists of what customers & suppliers know about each

other.

Mentally it consists of different types of knowledge.

Physically, it consists of geography.

Physically, your marketplace can be…

ORLOCAL

Local (near) Distant (far)

Reaching your marketplace can be…

OR

Easy Difficult

Physically, your marketplace can be…

OR

Open Narrow

Part of “where” people are includes the knowledge they have

Mentally, your marketplace can be…

OR

Local (known) Distant (unknown)

Mentally, your marketplace can be…

OR

Easy (looking for you) Hard (no interest)

Mentally, your marketplace can be…

OR

Open (obvious need) Narrow (no need)

Every Marketplace has its own rules

Choose a marketplace where the rules are in your favor

The rules you follow affect your performance in competition

Choose Ground that…

Weather – Climate – Heaven – Time

Climate is the emotional trends and physical changes in business

Constant changes in climate mean that your position is always changing as well.

Climate is the emotional attitudes that affect business that change over time.

Climate includes the economic trends

The business climate can be…

OR

Sunny Overcast

The business climate can be…

OR

Hot Cold

Climate provides the timing for good decisions

Change always creates opportunity.

Climate

PLACEPLACE

TIMETIME

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

Leadership and systems are two sides of the same coin

Leadership is your ability to make decisions

Leadership strengths can be overdone

OVERDONE WEAKNESS

A Leader is Smart

But doesn’t Overanalyze

Ground

ParalysisOver analysisArrogance

DumbIgnorant

OVERDONE

A Leader is Courageous

But not Foolhardy or Reckless

Climate

RashFoolhardyReckless

WEAKNESS

Cowardice

OVERDONE

A leader is Caring

But not overly sensitive or a zealot

Mission

IdealismToo fond of peopleZealot

WEAKNESS

IndifferentAloofUnmotivated

OVERDONE

A leader has Integrity

But not with an overly delicate sense of honor

Systems

Overly sensitiveGullible

WEAKNESS

UnfairDishonest

OVERDONE

A leader enforces Discipline

But isn’t a tyrant or too rigid

Command

RigidityTyranny

WEAKNESS

UndisciplinedQuick-TemperedLazy

Leadership

Systems are the methods of interacting with others

Your systems include customers and suppliers

Begin the systems analysis by documenting “what is”

Perform a “skills” analysis

Methods must match the mission

Which system is more complex?

System A System B

Methods

Understanding the competitive neighborhood and your place within it

Strength arises from unity and focus while outside perspectives expose reality

Competitive positions are relative and affected by deception so analysis is never done

Competitive Position

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

Organizational goal

Department goal

Leaders goal

Individual goal

Mission gives people their motivation for doing what they do.

People can have different motivations for doing the exact same thing.

Mov

ing

Liste

ning

Aiming

Claiming

Battle

Deception

Surp

riseSiege

UnityFocus

Division

There are four different levels of mission

Mission

Fitting the pieces together

All the pieces of the puzzle

You know yourself and others when you know…

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

Unity defines the strength of an organization

Conflicting goals lead to war

Focus creates strength in the marketplace.

A lack of a shared mission weakens the organization.

All business functions must satisfy the core mission.

The result is a lack of focus and divisive internal politics.

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

You cannot see yourself or your competitors objectively

Your information sources are too close to your position

You need outsiders who can offer an objective perspective

Understanding the competitive neighborhood and your place within it

Strength arises from unity and focus while outside perspectives expose reality

Competitive positions are relative and affected by deception so analysis is never done

Competitive Position

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

The quality of your position is relative to that of your competitors

The nine comparisons of competitive positions

Lemonade!Lemonade!

Which enterprises are in the best competitive neighborhoods?

Which enterprises are the best known?

Which enterprises are leveraging changes in the climate?

Which enterprises have chosen the best market segments?

Which enterprises make the best decisions most rapidly?

Which enterprises have the most effective and efficient systems?

Which enterprises have the clearest and highest-level missions?

Which enterprises have the most united teams of people?

Which enterprises have the sharpest focus on the market?

Competitive analysis is never finished

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

Decisions are often based on subjective opinions rather than facts

The reality of your competitive position is subjective.

Strategic positions are both objective and subjective.

Objectively, positions have a physical reality.

Subjectively, positions exist in people’s minds.

Group Discussion• Discuss times when you have incorrectly “judged a

book by it’s cover” and were wrong.• Perhaps you didn’t read a book, visit a restaurant, or

talk to someone because of appearances.• Discuss times when you thought something would be

great but was disappointing.• Why or how were you fooled?

Strategy depends totally on the choices of others.

Objective & subjective are complementary opposites.

Objective and subjective positions constantly create one another.

Group Discussion • Discuss how the extreme of one thing creates

its opposite.• Consider natural cycles.• How does a big company create small

competitors?• In what ways does strength become a

weakness?

Subjective positions are easier to change than objective ones.

Changing opinions is the same as changing positions.

Identify your competitive neighborhood

Examine your marketplace and business climate

Examine the leader and systems

Identify the levels of mission

Evaluate unity and focus

Get an outside perspective

Compare to competitors

Examine for deception and delusion

Repeat the analysis

1

2

3

4

5

6

7

8

9

9 Key Components: Where are we?

Remember, your competitive position is always changing

Analysis predicts which ventures will be profitable

In a poor business climate, you cannot survive business droughts

In a poor marketplace, you have too few potential customers

If your leadership is weak, you respond too slowly to changes

If your business systems are weak, you have high costs and undependable quality

The goal of any new venture is to make you stronger

Strengthen your position

Successful competitive advantages come from clear differences in position

My Enterprise Competitors

Your first responsibility is to make the safe decisions.

In the end, you must make decisions.

The End