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