Requiring the Use
of CI
In some firms, the most effective way to put CI to use
immediately is to require that every operating business unit (whether it is a
small sales department or a large multinational subsidiary) include with its
annual plan (whether capital, marketing, or strategy) an appraisal both of
current competition and the current marketplace as it impacts its decisions.
Experience shows that this formal directive is very often needed in addition to a general admonition that the
planning process must take into account competitors and competition.
Put in another way, if management cannot see the competitive
information set forth separately, it may have no guarantee that those preparing
the plan have actually taken it into account or that they have even looked into
it. Also, by seeing the CI that the unit has developed, management can evaluate
its appropriateness and adequacy and suggest additional sources.
A second step would be to require that the individual plan not
only indicate the current competitive environment but also show how the unit
perceives the future environment. From there, management can insist that the
specific unit indicate how it intends to respond to
changes in its competitive environment.
CI can be successfully injected in a similar manner at many
stages other than the planning processes. When you consider fundamental
corporate decisions, such as an acquisition, divestiture, major capital
investment, or introduction of a new product, management can require that those
involved, both in considering and in advocating the transaction, prepare a
competitive analysis. The analysis should indicate how the planned action will
assist your firm to respond to its competitors and how the affected competitors
may be expected to respond.
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