Putting ourselves in that role of a head of digital innovation, we are elevating ourselves above the need to simply look at our competitors from a marketing perspective, which of course we do on a regular basis.
So this is about the macro environment, if you like, and we need to ask ourselves these three questions. I thought this was quite good because what it’s doing is it’s forcing you to maybe think a little deeper than we might usually. And also, to not make assumptions and take for granted potentially what we already know.
1. Competitive threat
We need to understand how threatened we are by the competition. I think that that can be on a number of levels. I mean, there are obvious economic levels that you can be threatened by competition, such as revenue, market share, all of that sort of thing.
But also, the more nuanced threat that you might discuss every now and then with your colleagues. It’s always worth taking that into consideration because inevitably people will have picked stuff up about what’s happening in your particular marketplace that may well pose a threat. It’s worth thinking about it on that basis.
2. Dependence on others
I think the other thing which is also really important to think about, especially with regard to the innovation that you’re proposing, is the extent to which that, and also the wider business, is dependent on other players and partners.
I think that the way to think about that is, is there somebody else in the mix that we need to bring along with us in this process? And how much of a partner are they versus a competitor?
Those kind of relationships are really important, and they’re important to understand in that context.
3. Susceptibility to barriers to adoption
I think also not really so much about competitor analysis, but a question we’ve got to think about generally is, how susceptible is the business to those barriers to adoption?
The business in terms of how it’s set up, in terms of the attitudes of the key influencers, senior management team in the business, and also that’s linked to whether you’re working with other companies and partners as well.
So, there’s those three broad questions I think are worth pondering in the context of this assignment.
Then, it’s about trying to understand the level of threat. I mean, this sounds horribly aggressive, and I don’t mean to sound like that, but it’s the language of strategic business, isn’t it? Competitive threat. That’s why I’m talking that way.
So obviously, we’re looking at current competitors, but we also need to be aware of who might become a competitor, which isn’t always the easiest thing to try and suss out; but nevertheless, it’s something that we need to consider.
Amongst these current and potential or future competitors, how mighty are they? How much of a threat are they going to pose?
In thinking about your particular innovation, go to the end line there. How sustainable is it? I.e., is it difficult, easy to copy? Is it unique? Is it durable?
If you’re thinking of something that is easily copied and drowned out by existing competition and/or future, then it needs a rethink because in the big wide world, in the big bad world of business, it wouldn’t get past stage one.
Is there going to be any barrier to entry? I think what they’re referring to here is some of the more legal aspects, so regulatory, any patenting. Although we’re not applying for a patent (and we discussed a little bit about the declaration of precedents last week). Although we’re not applying for patent, it’s something that we need to be aware of.
I think in putting together an assignment proposal of this nature at our level, we need to demonstrate that we have given that some consideration and it’s on our radar. But we don’t expect at this stage. We’re not investing in a patent, and we’re not going down that route.
Thinking through those things enables you then to think about the level of advantage you might have over the competition. Just a few things there guided by the Gruber and Tal playbook, which is centred around market opportunity. In this case, it’s about market assessment. I think it’s important that we look at it in terms of market assessment, not marketing assessment.