How to Develop a Competitive Strategy

Today's episode will make you better at developing a strategy, and evaluating other people's strategies. Roger Martin is one of the world’s most sought-after experts on strategy, and the author of "Playing to Win", one of the most popular (and most actionable) books on learning the art of strategy. He’s written extensively for the Harvard Business Review; consulted for dozens of Fortune 500 companies, including P&G, Lego, and Ford; and written 11 other books on strategy, leadership, and clear thinking. In our conversation, we cover: 🔸 The five key questions you need to answer to develop an effective strategy 🔸 How most companies get strategy wrong 🔸 How to avoid “playing to play” instead of playing to win 🔸 Real-world strategy examples from Figma, Lego, Procter & Gamble, and Southwest Airlines 🔸 Why you need to either differentiate or be the lowest cost 🔸 Shortcomings of current strategy education 🔸 Much more Listen now 👇 - YouTube: https://lnkd.in/gTyPQZus - Spotify: https://lnkd.in/gKWWm-Fp - Apple: https://lnkd.in/gCing92Q Some key takeaways: 1. Strategy is an integrated set of choices that compels a desired customer action. 2. Great strategists aren’t born; they’re made through practice. Even if you see yourself as more operational than strategic, remember that strategy is a skill that anyone can develop over time. Just like any skill, it improves with practice. 3. To win in business, you must be either a low-cost provider or differentiated. If you’re neither, competitors can “bully” you and take market share. Two questions can help you figure out whether you’re winning in these ways. First, could you match competitor price decreases and remain more profitable than them? If not, you’re not a low-cost provider. Second, could customers essentially flip a coin between you and a competitor? If so, you’re not differentiated enough. 4. Use the Strategy Choice Cascade to define and implement effective business strategies. This framework consists of five essential questions: a. What is our winning aspiration? Clarify what you aim to achieve with your strategy. This guides all subsequent decisions and actions toward a clear objective. b. Where will we play? Select specific markets, segments, or niches where you will compete. Focus is crucial; trying to be everywhere can dilute effectiveness. c. How will we win? Determine your competitive advantage. You must either offer customers superior value or operate at a lower cost than competitors in your chosen areas. d. What capabilities must be in place to win? Identify and build capabilities that are critical for executing your chosen strategy effectively. These should be distinctive strengths that set you apart from competitors. e. What management systems are required to ensure the capabilities are in place?

Staying ahead of the competition requires more than knowing what your rivals are doing right now—it demands a strategic understanding of why they make the decisions and how they are likely to act. This is where Porter’s Four Corners Analysis comes into play. Developed by Michael Porter, this strategic tool goes beyond surface-level assessments of competitors by diving into the motivations and capabilities driving their actions. It allows businesses to anticipate competitive moves and align their strategies proactively. The model consists of four critical components: 1️⃣ Drivers (Motivation): What are your competitors' long-term goals, and what internal and external factors drive their strategies? Understanding their motivations can reveal future strategic directions. 2️⃣ Current Strategy: How are your competitors competing today? This involves analyzing their market positioning, key activities, and resource allocation to identify strengths and weaknesses. 3️⃣ Capabilities: What resources and skills do your competitors have at their disposal? Assessing their capabilities helps determine if they can realistically pursue their goals, revealing potential opportunities and threats. 4️⃣ Management Assumptions: What beliefs shape your competitors' strategic decisions? Understanding their assumptions about the market and competition allows you to identify potential blind spots or miscalculations. Why Use This Analysis? Predict Competitor Actions: Anticipate moves before they happen and adjust your strategy accordingly. Identify Weaknesses: Pinpoint gaps between competitors’ aspirations and their actual abilities. Strategic Decision-Making: Use insights to inform market entry, pricing, product development, and investment decisions. Incorporating Porter’s Four Corners Analysis into your strategic toolkit can provide the foresight needed to outmanoeuvre competitors. It’s not just about knowing what they’re doing—it’s about understanding the why, the how, and the what’s next. Ps. Interested in business strategy and innovation? Please follow for insights and updates. 😀

We've lost the art of good old-fashioned competitiveness. 𝙈𝙤𝙨𝙩 𝙛𝙤𝙪𝙣𝙙𝙚𝙧𝙨 𝙚𝙞𝙩𝙝𝙚𝙧: Ignore competitors completely ('We're so unique, we have no competition') Obsess over direct competitors ('Let's copy what they're doing') Both approaches miss the real opportunity. The competitive analysis framework that transformed my last company: Instead of just watching our direct competitors, I challenged my team to identify world-class leaders in specific categories and learn from their principles. 𝗘𝘅𝗮𝗺𝗽𝗹𝗲𝘀: - 𝙂𝙖𝙥 for e-commerce website experience - 𝙉𝙤𝙧𝙙𝙨𝙩𝙧𝙤𝙢 for customer service excellence - 𝘼𝙥𝙥𝙡𝙚 for product simplicity and user experience 𝗧𝗵𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻: 'How can we apply their world-class principles to our business?' Why this works better than traditional competitive analysis: You learn from proven excellence, not just industry mediocrity You discover innovations from outside your sector 𝗧𝗵𝗲 𝗔𝗜 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆 𝗻𝗼𝗯𝗼𝗱𝘆'𝘀 𝘂𝘀𝗶𝗻𝗴: Here are 5 AI prompts for competitive analysis: 𝗣𝗿𝗼𝗺𝗽𝘁 𝟭: 𝗖𝗿𝗼𝘀𝘀-𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆 𝗘𝘅𝗰𝗲𝗹𝗹𝗲𝗻𝗰𝗲 𝗗𝗶𝘀𝗰𝗼𝘃𝗲𝗿𝘆 'Identify the top 3 companies known for [specific capability like customer onboarding, pricing strategy, or user interface design]. Analyze what makes them world-class in this area and suggest how a [your industry] company could adapt these principles.' 𝗣𝗿𝗼𝗺𝗽𝘁 𝟮: 𝗣𝗿𝗶𝗻𝗰𝗶𝗽𝗹𝗲 𝗘𝘅𝘁𝗿𝗮𝗰𝘁𝗶𝗼𝗻 'Study [world-class company]'s approach to [specific function]. Break down their strategy into 5 core principles that could be applied to any business. Provide specific examples of how each principle works.' 𝗣𝗿𝗼𝗺𝗽𝘁 𝟯: 𝗚𝗮𝗽 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀 𝗔𝗴𝗮𝗶𝗻𝘀𝘁 𝗘𝘅𝗰𝗲𝗹𝗹𝗲𝗻𝗰𝗲 'Compare our current [process/strategy] to how [world-class benchmark] handles the same function. Identify the 3 biggest gaps and suggest specific improvements we could implement in the next 90 days.' 𝗣𝗿𝗼𝗺𝗽𝘁 𝟰: 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗧𝗿𝗮𝗻𝘀𝗳𝗲𝗿 '[World-class company] excels at [specific capability]. How could a company in [your industry] adapt their approach to achieve similar results? What would need to be modified for our context?' 𝗣𝗿𝗼𝗺𝗽𝘁 𝟱: 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗜𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗦𝘆𝗻𝘁𝗵𝗲𝘀𝗶𝘀 'Analyze the competitive strategies of [3 world-class companies from different industries]. What common patterns emerge in how they maintain market leadership? How could these patterns apply to our competitive strategy?' 𝗧𝗵𝗲 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗮𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲: While your competitors are copying each other, you're learning from the best in the world. What world-class company could you learn from that's completely outside your industry?"

Every time I reread these four books, I find a new leverage point I couldn't see before. They're not on most startup lists because they're not about startups. That's why they work: 1. Seven Powers by Hamilton Helmer This isn't a "strategy" book in the loose sense. It's an index of durable powers (scale economies, network economies, switching costs, cornered resource, branding, counter-positioning, process power) and when they actually bite. The point isn't growth for its own sake but asymmetric advantage - growth that widens the moat as you scale. Takeaway: Pre product-market fit, only counter-positioning (attacking incumbents with a model they can't copy without self-harm) and cornered resource (exclusive access to something critical) are real. Post product-market fit, scale economies become available. Choose one primary power and kill any project that doesn't reinforce it. 2. Obviously Awesome by April Dunford Positioning is frame control. If you don't set the frame (the category where customers mentally place you), the market will do it for you and you'll be benchmarked on the wrong axis. Dunford gives an operational process for defining your competitive set, value narrative, and the "best-for" claim that makes price comparisons meaningless. Takeaway: Run her 5-step exercise: competitive alternatives → unique attributes → value themes → who cares most → market category. Then rewrite your homepage copy and pricing page to match. 3. Shoe Dog by Phil Knight Phil Knight's memoir about building Nike from selling shoes out of his trunk to a global empire. Don't read it as a hero's journey. Read it as a case study in creative constraints. Knight turned cash scarcity into competitive advantage through the Futures program (getting retailers to commit 5-6 months ahead) and creative financing when banks wouldn't lend. Takeaway: Map your biggest constraint. Turn it into a differentiator. Nike turned cash scarcity into advance retailer commitments that gave them predictable revenue when competitors couldn't. 4. Thinking in Systems by Donella Meadows Many leaders optimize parts without seeing the whole. Systems thinking reveals where small changes create cascading effects - like how improving onboarding can paradoxically reduce retention if it brings in users who churn faster. Takeaway: Draw your growth loop as boxes and arrows. Find the one constraint that, if removed, would change everything else. That's your only priority. The best books should be reread at different stages. Each time through Seven Powers, different powers become available. Each time through Obviously Awesome, your positioning gets sharper. What book changed how you make decisions? Not how you think about them - how you actually make them.

Last year, I spent a week analyzing competitors for a public limited company. Charts. Spreadsheets. Product comparisons. It was exhausting. It also forced me to confront a truth. Most brands drown in data but starve for insight. They map every competitor move. Track every feature launch. But they never extract the one strategic insight that actually moves the needle. The result is paralysis, copycat behaviour, or worse, trend chasing at the cost of sustainable growth. What else can we do? Tip 1: Map the landscape, then find the empty spaces. Don't just list competitors. Create a positioning matrix. • Plot competitors on two axes that matter to your audience • Look for clusters where everyone competes • Find the white space where no one is playing • Align that space with your unique strengths We used to do this in our MBA classes. It works. There’s something about seeing all the major players on a visual grid, segregated by logic. It unlocks lateral thinking. Empty spaces aren't always opportunities. But they're always worth investigating. Tip 2: Strategic thinking beats endless analysis every time. I've seen brilliant marketers lose to average ones with better strategic instincts. The difference? Strategic thinkers decide what to do before how to do it. They prioritize high-impact bets. They choose their battles instead of fighting on every front. You can't analyze your way to breakthrough positioning. Strategy + Intuition >> Strategy alone. Tip 3: Act on one insight, not ten data points. Most marketers think more data solves their problems. • You don't need more consumer insights. Seriously. You need to act on just one • Pick the insight that aligns with your differentiation • Build your messaging around it • Test it in 90 days, then adapt Tip 4: Ask questions that surface differentiation. When we finally unlocked that client's positioning, it wasn't from more spreadsheets. It was from asking: "What do you do that makes competitors uncomfortable?" That question revealed their real edge. Great questions cut through noise. They expose what truly differentiates you from the pack. And they guide you to strategic clarity faster than any competitive audit ever will. Tip 5: Align your narrative with what you discovered. Once you've found your strategic insight, don't bury it in a deck. • Use it to differentiate your brand story • Let it streamline business decisions • Make it drive customer affinity across all touchpoints That’s it. #marketing #business #entrepreneurship

Yesterday I had the pleasure of helping a tremendous group at a local nonprofit organization with a quick strategy session. And I incorporated one of the most useful tools I’ve come across for filtering all the great “possibles." David La Piana ’s 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘺 𝘚𝘤𝘳𝘦𝘦𝘯. A Strategy Screen is a short list of criteria your organization uses to decide whether a new idea, opportunity, or partnership truly fits your organizational vision and current reality. You build the screen 𝘣𝘦𝘧𝘰𝘳𝘦 the ideas show up, so you can evaluate quickly and confidently. It’s especially useful for organizations without a formal strategic plan, because it offers a simple, consistent way to make smart, mission-driven choices in real time. The basics: Any potential strategy 𝗺𝘂𝘀𝘁: ✔ Directly support your organization’s mission ✔ Leverage your existing competitive advantages And it may also need to: ✔ Meet financial criteria (e.g., pay for itself or fit your budget) ✔ Uphold quality standards (no cutting corners just to say yes) ✔ Fit your geographic and/or audience scope ✔ Strengthen your position as a leader in your space Here's how it works. Imagine you're an organization that serves young children. You follow the Strategy Screen guidelines and come up with questions a bit like: Would the proposed activity • Advance our mission to help children and families thrive? • Leverage and sustain our competitive advantages of local relationships, existing infrastructure, and excellence in program delivery?    • Enhance or advance our focus on hands-on learning and family focus? • Arrive with or generate the necessary income to cover the full costs of the effort? • Foster collaboration and engage partners? • Introduce risk to reputation? Now, let’s say a funder offers your organization a grant to expand your early childhood program into an adjoining county. Sounds great, right? But you run it through your Strategy Screen: 1. Mission-aligned? ✔ 2. Uses your competitive advantages? 🚫 You’d be entering a region where you lack relationships and existing infrastructure. 3. Enhance or advance our focus on hands-on learning and family focus? ✔ 4. Financially sustainable? 🚫 The grant covers two years, but no funding plans exist beyond that. 5. Foster collaboration and engage partners? 🚫 You don't yet have the partners needed for this. 5. Risks to reputation? 🚫 Overextending could hurt your current strong reputation. Despite the appeal, you can see how the screen helps you say “not now." It also highlights where you might choose to build capacity or strengthen competitive advantages for the next opportunity. As a social sector leader, good ideas are everywhere. They might even land right in your lap. The Strategy Screen helps you filter fast. So you don’t waste energy chasing what doesn’t fit or create risks for your organization.

A guideline we've learned from our work on hundreds of campaigns: For more effective campaigns, fight the urge to use competitive research as inspiration – or worse, validation. Basing your campaign on what competitors are doing is flawed for so many reasons: 1. It assumes your competitors actually know what they're doing. Unlikely. 2. It assumes your competitors aren't just copying their stuff from another competitor. They probably are. 3. It assumes your market just wants to see more of the same things they're already seeing from competitors. Almost certainly not true. You can see tons of examples of this in the marketing agency world. Do a quick Google search for "we are passionate about marketing" and you'll find over a hundred agencies using that exact phrase. 🤔 Is it because that's what the market wants to see or is it because it's what everyone else is saying? Competitive research has it's place. It SHOULD mainly be about understanding the context in which your market lives. What messages are they hearing and what are they being told is important? How do you want to respond to and stand out among that messaging? At 97th Floor, part of our market research is what we call a User Experience Review (UXR). It's not classic competitive research. Instead, we put ourselves in the shoes of the customer and start to shop like they would. We browse, read, and convert. We make note of the messaging being used and what value props customers are being told to consider. We then find gaps in the market we should be taking advantage of to stand out to avoid the sea of sameness. Why bother sending a bunch of traffic via SEO and advertising to mediocre pages? UXR + SEO/Advertising = 🤌 Chasing status quo is the quickest way to lose. The absolute best you can hope for with that strategy is to be middle of the pack. To win, show them something new.

Reacting to Competitors Is a Positioning Weakness If your strategy changes every time a competitor moves… You’re not leading the category. You’re following it. At Preo Communications, we see brands derail their growth by: • Matching competitor pricing • Copying competitor messaging • Launching reactive offers • Responding publicly to competitor moves It feels defensive. It reads insecure. ⸻ Here’s the Strategic Problem When you react to competitors, you: – Accept their framing – Validate their relevance – Enter their pricing conversation – Lower your positioning to comparison level The moment you compare, you compress margin. Premium brands don’t compete. They define. ⸻ The Hidden Cost of Comparison If your audience hears: “We’re better than X because…” You’ve already lost leverage. Because now you’re in a shared category. And shared categories become price battles. ⸻ The Alternative: Category Control Instead of reacting, ask: Are we even playing the same game? High-leverage brands: • Stay inside their own framework • Repeat their positioning • Ignore competitor noise • Strengthen their category narrative They don’t chase. They elevate. ⸻ The Reality Competitor-driven strategy creates volatility. Volatility reduces perceived stability. Stability attracts capital. At Preo Communications, we help brands design positioning that makes competitors irrelevant. Because power isn’t responding. It’s being unbothered.

Bad news: your competitor released a new product. Good news: it’s a wake-up call for YOUR business. The natural reaction: Panic and rush to imitate. But this 'me-too' strategy rarely works. It often leads to wasted resources and missed opportunities. Instead, view competition as a wake-up call. A chance to drive real innovation. Here's why: 1. It forces you to reevaluate your market position 2. It highlights gaps in your current offerings 3. It creates urgency for meaningful innovation The key is to resist the urge to play catch-up. Instead, use a process like Outcome-Driven Innovation (ODI) to uncover unmet customer outcomes your competitor might be overlooking. Focus on solving these underserved customer outcomes. Then leapfrog competition and carve out a unique market position. Today’s product announcement = tomorrow’s cautionary tale. Focus on customer outcomes -> not competitor moves.

Every bold strategic move invites a response. The question is whether your strategy still holds when your competitors react. In a saturated telco market where wireless growth is flat-lining, fiber is scaling, and cable is fighting back, the real advantage comes from planning for several rounds of competitive play. A resilient strategy is designed with the understanding that competitors will imitate, discount, and reposition. That’s why scenario planning and adaptable execution are critical. You make a move, the market responds, and your strategy must still hold up. Anchoring on what can’t be replicated gives you staying power. Fiber’s structural speed and reliability advantages are a good example. Competitors can adjust pricing, but no amount of discount can make a legacy technology perform like fiber. Winning requires balancing your long-term advantage with fast tactical adjustments that neutralize short-term threats. If your strategy can be undone by your competitor’s next move, it’s not a strategy, it’s a tactic. How often do you pressure-test your competitive playbook? #Fiber #Strategy #DigitalInfrastructure