No business is an island. The corporate graveyard is full of onetime leading businesses that lost their competitive edge by failing to keep current on their competitors. Think of the classic story of Digital Equipment Corporation, with its once technical superiority turning into organizational chaos, or the various bloated airlines, with cost structures and business models that were vulnerable to competition long before 9/11.
In today's world of accelerated product lifecycles, the instant diffusion of information, and rapid globalization, the competitive landscape is not getting any easier or safer to navigate. As Kotler writes in his well-known textbook, Marketing Management, "markets have become so competitive, understanding customers is no longer enough." Also, in a 2005 McKinsey & Co. article about competition, the authors write, "Plentiful, cheap, and global labor, capital, capacity, infrastructure, and information have affected industries profoundly." In terms of the overall competitive dynamics today, the genie is out of the bottle. There is no going back.
In September 2003, I wrote an article in MarketingProfs about testing one's marketing strategy. I will outline that original model—and extend it, as one way to test your competitive market strategy.
Testing Your Competitive Market Strategy
A famous figure in the world of strategy was a general named Sun Tzu. He lived in northeastern China about 2,500 years ago and was considered an expert in military strategy due to his many victories on the battlefield. Many successful military leaders (such as General Patton) and business executives (such as former GE CEO) have attributed their victories to their application of Sun Tzu's principles.
Sun Tzu wrote about four areas, among others, that we could apply to the testing of marketing strategy: speed, strengths and weaknesses, alliances, and successful market capture. In essence, each of these areas can be compared and contrasted vis-à-vis your competition.
Market timing and speed are critical to many industries, such as technology, pharmaceuticals, and some consumer goods. Today, in fast-moving areas such as wireless, telephony, and hybrid cars, you can see how market windows open and close relatively quickly. The economic rents accrue to those who can thoughtfully scan the market environment and quickly spot profitable opportunities.