Do you know your Competitive Factors?

Ask any CEO if s/he and her/his team know the factors of competition for their products and services and they will always tell me they do. When asked to define competitive factor, often there comes a “deer in the headlights” response. Further, when you get these same people in a room, divide them into teams and have each team come up with the competitive factors for their products and services, you may get very different answers.

Many teams are not even able to agree within their small group. Heated debates often ensue, and sometimes there never is consensus. Such is my experience as I travel around helping companies find new factors of competition and develop their Blue Ocean Strategy. (for information on Blue Ocean Strategy, see blogs starting October 21, 2007)

Let’s start with a definition of Competitive Factor. A competitive factor is a feature or benefit considered key or essential to the promotion of a product or service to its intended market. Because it is perceived as valuable by the customer it is a value element used to attract buyers. It is an ingredient, a constituent, an element or characteristic of the product or service that is highly sought by the customer.

Competitive factors usually include price. Other competitive factors may be fast delivery, such as the case of Federal Express, capability, color, size, ease of use, quick response, and many others. In an established industry, these factors are generally well known and offered at varying levels by all competitors.

The challenge is that if you don’t know what your factors of competition are in your current bloody Red Ocean is (see prior blogs for definition of Blue Ocean Strategy and Red Ocean Strategy), there is no way you will be able to find your Blue Ocean. The key tools working toward finding the Blue Ocean is the strategy canvas and the value curve tools. A key element of the strategy canvas is the competitive factors. It is vital that you know, accurately, what those are.

So, how do you figure that out? Start with your own team. Work out a list of factors that they can agree on. Then take those factors to the rest of the employees for feedback. From that feedback, make up a composite list that you will now go to the market and confirm. For further information on competitive factors email me, info@corporatestrategy.com