Competitive Intelligence Strategies

Curveball Strategies to Fool the Competition

Strategic hardball playing rough and tough with competitors employs smart strategies to defeat rivals. Strategic curveball outfoxing competitors can be just as effective in vanquishing the competition. The aims of curveball and hardball strategies are the same: gaining an advantage that allows to strike out your opponent. In fact, the hardball strategies are laid out to deceive the competition are often combinations of the tough-mindedness of hardball with the cunning of curveball. The curves are the shrewd manoeuvres to take the competitors to different paths than that they would have ordinarily chosen. An effective curve will get rivals to Do something dumb that they otherwise wouldnt have. They would become active in an area that appears to be in the interest zone but in fact isnt, or Not do something smart that they would otherwise have. They would fail to recognize the area that appears not in the interest zone but in fact is. The following four techniques to throw curveball are the most common 1. Draw your rivals out of the profit zone. Lure competitors into disadvantageous areas for example, by competing for, but intentionally failing to win, the business of less profitable customers. By using clever pricing to get competitors to pursue unprofitable customers, you lock up the most profitable ones. Example: A U.S. cleaning company Ecolab knew that small, independent customers though willing to pay higher prices than chain retailers were also costlier vto serve, and thus not profitable in the long run. But rival Diversey was smitten by the healthy gross sales revenue promised by such customers. To help Diversey win these customers, Ecolob priced its bids to small independents high enough to lose to Diversey but low enough to keep downward pressure on Diverseys net margins. Meanwhile, Ecolob priced aggressively to win big chain accounts the cheapest to serve and thus most profitable. While Diverseys revenues increased, its bottom line eroded and it lost 15% on US sales. Meanwhile, Ecolob enjoyed a steady 20% return on sales. 2. Employ unfamiliar techniques. Knock rivals off balance by importing a technique for example, employing the retailers hard sell in the sticky world of retail financial services. Similar techniques in other business segments are immensely useful to create confusion in the competitors strategies and makes it difficult for them to shift gears fast. Example: A decade ago, Britains Halifax Building Society was a second tier bank with respectable returns on equity but a diminishing share of its core home mortgage market. In 1999, Halifax set out to build a powerhouse company of retail financial services and getting out of the image of the sleepy building society. They used the brash marketing and merchandizing tactics of a retailer to challenge the competitors
Subir Ranjan Das, COMES, UPES

Competitive Intelligence Strategies

that included the large banking companies as well. The big banks were reluctant to respond to Halifaxs stand-alone offerings with ones of their own because these would risk cannibalizing business that had been built up through cross selling. Today, Halifax is the largest and one of the most profitable retails banks in the U.K. Some 40% of UK households use Halifax products, including personal mortgages, checking and savings accounts, and credit cards. 3. Disguise your success. Veil your success by achieving an advantage through unlikely means for example, generating product sales through your service operations. If rivals cannot even see your success, they will not move to attack you. One way to disguise your success is to drive sales through your service organization making service technicians de facto sales representatives. Example: DiaDevice, a medical diagnostic equipment maker in the US, used this technique to outfox rival MediTec. It installed full-time service technicians in secondtier hospitals that MediTec had deemed not profitable enough for on-site service. DiaDevices on-site technicians boosted new equipment sales by influencing hospitals request-for-proposal process. They knew the strengths and weaknesses of all the equipment installed at the hospital regardless of the supplier. Thaks to this curveball, Dia Device gained share in service contract renewals and new equipment sales virtually unopposed by MediTec. 4. Let rivals misinterpret your success. Allow rivals to act on a conventional but incomplete explanation for your success for example, squeezing costs rather than aggressively utilizing assets. A successful companys competitors may think they know the secret to its success. But they are often wrong. By letting the rivals misjudge the key source of your performance, you maintain edge even longer. Example: Air Deccan, Indias first no-frills airline flourished by letting rivals think it was competing just by squeezing costs. The real secret to Air Deccans was its ability to increase the asset utilization aggressively. Fast turnaround times at the gate kept its planes, pilots and crew in the air for more hours each month than traditional rivals. Aprt from this, smart scheduling brought most of its planes and crew back to home base at the end of the day. Extreme asset efficiency enabled Air Deccan to improve its profitability through volume games; and keep competition at bay. This strategy was also very effectively used by Jetstar, the Australian low cost airline. Such opportunities are abound to throw your competitors a curve, which doges and puts them off track. And each time you throw one, you earn time to plan and play your next curveball.

Subir Ranjan Das, COMES, UPES