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This is a book about how individuals in organizations can turn data and information into insights that decision makers cannot and will not ignore. This book provides its readers with 24 commonly applied methods for helping generate actionable recommendations for decision makers, as well as a handful of detailed chapters that address the process of competitive analysis itself.
Given the priority of competitiveness in firms today, business managers need to have a benchmark about what business and competitive analysis is and how it works. More importantly, they need to be able to convert the wealth of available data and information into a valuable form for decision-making and subsequent actions. Collected data must be converted into intelligence. This is accomplished through analysis.
Business and Competitive Analysis (BCA) is a book about analysis. Analysis is one of the more difficult and critical roles a manager, consultant, functional specialist, strategist, or intelligence provider is called upon to perform. Although great strides have been made in recent years in terms of planning strategy and intelligence projects and collecting data, the same cannot be said for analysis.
Much of the background research we performed in developing this book was derived from practice and research in the larger field of competitive intelligence (CI). This field is not one most of our readers will have encountered during their formal education, and their current employers may not have anybody with that discipline in their job titles. Nevertheless, nearly every firm performs some of the CI functions, and most of them perform it on a regular basis in advance of making key decisions. Analysis is one of the key roles performed by individuals in the CI field, and it is the one that arguably generates the highest value for executives. In our view, business and competitive analysis can and should be a key weapon in the firm's arsenal for achieving competitive advantage.
Despite many advances and steady growth in the CI field, some areas of this growing field have received more or less attention than others. The growth of digital communication and information technology and especially the Internet has led to much attention being given to processes and techniques of data collection, as well as information and knowledge management. Planning competitive intelligence projects has also received a boost from the ever-present attention given more broadly to strategic planning and strategy development. Despite these areas of popular interest, two areas that have received disproportionately less attention are analysis and its communication. In fact, our own observations, experiences, and several studies underlie the authors' contention that many practitioners have limited understanding of the breadth and depth of the challenge underlying these areas.
We seek to remedy this situation by offering this needed book that is devoted entirely to the process, tools, and techniques for conducting business and competitive analysis. This is our second book in this subject matter area, with our first, called Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition, having been published several years ago and subsequently translated into half a dozen different languages. We received a lot of constructive feedback on that effort, particularly from managers and analysts who were using the techniques described in that book. Based on the feedback and reviews, readers typically found it to be an excellent, one-stop source for reminding and guiding them on the key steps of a particular tool to address a particular problem they were facing, as well as providing them with an enhanced idea of what was supposed to be accomplished by applying the tool. That book was used in many well-known enterprises to help train newly hired analysts and consultants. Finally, the book was used in business school courses in scores of countries to help students learn and apply these techniques to decision-oriented case studies and "real-world" projects.
We took the feedback we received and incorporated it into this book in the form of a wider range of proven techniques and a better background on the process and context of business and competitive analysis. This book is absolutely not a second edition and contains completely new content. Between the two books, we provide lengthy coverage of nearly 50 different techniques, which is surely the most detailed coverage of business and competitive analysis methods ever produced.
We recognize that there are literally hundreds of business and competitive analysis techniques that we could have included in this book. It was not our intention to offer an exhaustive list and detailed description of all these techniques. Instead, we have extensively reviewed the literature in the field, considered survey research and our own experiences in determining those techniques we view as potentially being the most applicable across a broad range of decision making contexts supported by the business and competitive analysis process.
Although we have tried to include both "classic" and evolving techniques, we recognize that some techniques that are being used in consulting and industry may not be included here. One reason for this is that some of these tools are and remain proprietary to the consultancies employing them. Another part of the reason we may not have included a useful tool here is that analysis is a process that requires both technical knowledge and creativity. We recognize and hope that managers and analysts will creatively develop techniques not included in this book that provide for better outcomes in their specific contexts.
The reader should also be alert to the fact that any listing of techniques is bound to run into a variety of problems of semantics and definitional confusion. Some of the techniques included in this book are known by multiple names. This may have occurred because the technique came to be associated with a particular originating organization or particular company's use (e.g., McKinsey 7S), a particular author (e.g., Porter's Five Forces Model), or has retained a generic name (e.g., benchmarking analysis). We recognize that some of the techniques included in this book have seen modifications in use over the years or are derivatives of other closely related techniques. In all cases, we have tried to include and describe the most popularly utilized versions of the techniques, as opposed to all of a technique's possible derivatives. Throughout our methods chapters, we have tried to alert the reader to where there is overlap between techniques by suggesting that the reader refer to the overlapping constructs elsewhere in the text.
Many of the techniques included in this book were created by leading economists, financial and cost accountants, futurists, sociologists, anthropologists, intelligence agencies, business professors, consultants, and other insightful practitioners or theoreticians. They often developed their ideas in an effort to solve pressing analytical problems that they faced. We are grateful to these individuals for enlightening our understanding of business and competitive analysis. We make a sincere attempt to acknowledge the originators of these techniques in the book.
We must also note to our readers that it was not our primary intention to "invent a new wheel" when it comes to analytical techniques. The techniques we have included all have a history, with some having been applied for several decades or longer. This book's techniques have been and are in use in real organizations and do not exist just in theory. However, we have included several techniques that are likely to be unfamiliar or novel to many readers, even those who have gone through graduate business, management, or marketing courses, as well as individuals who have been performing analysis in their enterprises for many years. We believe strongly that unfamiliarity is a particularly bad indicator of a method's value. We believe our readers will find that even some of the new techniques (to them at least) will be of high potential value in helping them make sense of their firm's business and competitive contexts.
How to Use the Book
To assist our readers, the majority of this book is self-contained, with the array of analytical techniques being supported by references for further reading for those individuals who want lengthier treatments. The book is organized into two main sections, with the first providing the reader with an understanding of what the evolving body of knowledge in the field has revealed about analysis in its real-world context and how analysis processes actually are supposed to work.
This book includes five detailed chapters that describe, define, and discuss the basic facts about analysis, how analysis can ideally be performed, avoiding analytical pitfalls, and communicating analysis results. The last chapter in the opening section describes our unique FAROUT method for understanding the application of the various tools. We strongly recommend that readers thoroughly review that particular chapter before progressing into the remaining sections of the book that contain coverage of the analytical techniques themselves.
We have tried to make the book easy for the reader to use. The basic structure of the chapters containing the analytical techniques is common throughout the second part of the book and contains the following format:
- Short DescriptionA brief definition of the purpose and objective of the analytical model to provide an analyst with a quick and handy reference guide.
- BackgroundTo place the model in context of management, this section outlines a broad description of the history behind the development of the analytical technique.
- Strategic Rationale and ImplicationsUnderstanding the strategic thinking and implications associated with a particular analytical technique is important in order to evaluate the appropriateness of a particular tool. This section reviews the strategic issues inherent in each technique.
- Strengths and AdvantagesEach model has its own strengths and advantages that need to be weighed in light of the purpose of the analysis. This section briefly reviews those strengths and advantages.
- Weaknesses and LimitationsLikewise, each model has its own inherent weaknesses and limitations. The weaknesses/limitations identified in this section need to be taken into account when performing the analysis.
- Process for Applying the TechniqueThis is the "how to" of the analytical technique and identifies the necessary steps required to use this tool. Case studies, figures, and tables are also provided to guide the analyst through the strategic thinking required for each model.
- FAROUT SummaryUnique to this book, the FAROUT Summary allows analysts, at a quick glance, to identify the ease of use, practicality, and usefulness of each model.
- Related Tools and TechniquesEach model of analysis is related to or supported by a number of other techniques that may aid or enhance the analyst's task. This section provides a useful guide of related tools and techniques that support the objective and purpose of each analytical model.
- ReferencesFor those analysts wanting to delve further into a particular technique, references for additional readings are provided at the end of each chapter.
Readers will benefit by becoming familiar with this template. This book was not designed to be read in one sittingif nothing else, its length would probably make that an extremely tiring task and practically impossible for most individuals. Instead, we have designed it as a handy comparison and reference source. In this respect, it can be most effectively applied in a "just in time" fashion so as to proactively or concurrently meet an organization's analytical needs as they arise.
The book features conceptual ideas about business and competitive analysis, along with a strong bias toward practical application. Among the unique aspects of this book that readers should find valuable are the following:
- It provides in one easy location two-dozen of the most common and popular models of analysis used in business. Normally, executives and students would have to go to multiple sources to locate each model. Here, for the first time, the most commonly used models are defined and explained in one book.
- Every model is also uniquely evaluated using FAROUTan evaluation process for identifying the ease of use, practicality, and usefulness of each model. FAROUT allows analysts or decision-makers to understand the strengths and weaknesses of the techniques.
- An easy-to-use, consistent format (i.e., template) is utilized to provide the reader with a faster understanding of how to apply the techniques.
- The book covers both the so-called "classic" strategy techniques, such as industry analysis, along with some of the newer popular techniques, such as business model analysis. Several of these models, such as win/loss analysis, strategic relationship analysis, driving forces analysis, and event and timeline analysis, among others, have never been treated this comprehensively in any other publication.
- It provides external techniques addressing the environments and industry that the organization competes in, along with the techniques for focusing internally on the organization.
- It provides references to more comprehensive treatments of the techniques for those who want to investigate them in greater depth.
We expect to stimulate others to begin closing some of the knowledge gaps in business and competitive analysis that we have explicitly and implicitly identified throughout this book's chapters. We also hope that this book encourages practitioners to further share their experiences and observations with researchers and teachers like us in the field. We anticipate that the book will compel our readers to question some, if not a large number, of their current analysis practices and understanding. Our ultimate aim is that this book be viewed as a valuable contribution to the knowledge and practice of business and competitive analysis. Whether or not we achieve our aim is left in your hands, our readers, as it should be. Please feel free to contact either of us if you would care to share your views.
Babette E. Bensoussan Craig S. Fleisher
The Mindshifts Group Pty. Ltd. Odette School of Business Level 6, 8 Help Street University of Windsor Chatswood 401 Sunset Avenue508 OB New South Wales 2067 Windsor, Ontario, N9B 3P4 Australia Canada
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