What Will Your Competitors Do Next?

Once you know the identity of your most direct competitors and have a good idea as to your second- and third-tier competitors as well, you should give some thought to which actions they are likely to take in the next year or so. Estimates of competitors' future activity depend on your knowing and understanding their objectives, strength in the marketplace and resources. This important intelligence is key to your company's:

• annual forecast of sales, spending, and profits
• promotion and advertising programs
• introduction, support, and success of new products and services
• market, product, or service category, and sub-category trends
• direction for future growth

Gathering competitive intelligence can be the difference between realizing your company's annual plan and losing business that may never be recouped.

To be successful in identifying competitor's strategies and tactics, you must gather every bit of available data from sales forces, outside consultants, market surveys, and trade associations. For example, the data that you look at may include pricing, promotion and advertising spending, new product introductions, sales results, market share trends, packaging innovations, key account management, service levels, and other indicators of competitive activity in the marketplace.

The observance of competitive strategies and market tactics can be the basis for understanding a competitor's objectives. Is it simply profits and growth? Or could it also include "owning the market," driving other competitors out of the market, or being first in new markets and international markets?

Understanding each competitor's behavior in terms of short- and long-term objectives, strategies, and tactics will be extremely important to survival and success, in business as on the battlefield. And many of the marketing programs mimic battlefield moves. Dividing competitive forces among different markets, flanking attacks in weaker markets, direct frontal assaults with spending, new products and pricing across all market segments and product lines, and converting the enemy's best soldiers to your own company forces are all examples of tactics that may be open to you.

Small Company Intelligence Tactics Visit your direct competitor's stores, customers, suppliers, convention booths, and sales personnel. Gather secondary data on the competition from trade associations, publications, conventions, customers, and your own sales force. Make a short list of possible competitive strategies and tactics for the current year, and your retaliatory strategies and tactics, including situations to which you will not respond. Analyze your competitor's products regularly for improvements, weaknesses, and quality trends.