Where you stand depends on where you sit

December 19, 2013

 

One of the most difficult things to accept in competitive intelligence is that just because you think you understand something doesn’t make it so. Specifically I’m talking about understanding and then predicting actions of competitors.

It is absolutely vital to keep in mind that your competitors not only do not necessarily see the world the way you do, they almost certainly do not use the same kind of metrics in making decisions that you do. This makes it very difficult for you, acting as your own analyst, to understand and then predict your competitors’ behavior without significant digging.

A recent article in The Economist[1] referred to a study that highlights just how different individual enterprises can view the world. In its discussion about carbon pricing, the article noted that the study about how major enterprises used carbon pricing in planning capital projects was particularly intriguing. The prices noted ranged from $6.70 per ton of carbon dioxide to over $34 per ton (or over 5 times as high).  The article concluded, “[t]hese prices change behaviour.”

They certainly do: the difference in pricing by two companies looking at capital planning in the same competitive environment will result in two different decisions. So always take care to determine your competitor’s perspective before predicting their actions.


[1] “Carbon Copy”, The Economist, December 14, 2013, 70.



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s