What is the value of using Michael Porter's Framework for Competitor Analysis to observe competitors and trying to predict what moves they will make next?

Question

What will be an ideal response?

Answer 1

Unless a company pays attention to the strategies and situations of competitors and has some inkling of what moves they will be making, it ends up flying blind into competitive battle. As in sports, scouting the opposition is an essential part of game plan development. Gathering competitive intelligence about the strategic direction and likely moves of key competitors allows a company to prepare defensive countermoves, to craft its own strategic moves with some confidence about what market maneuvers to expect from rivals in response, and to exploit any openings that arise from competitors' missteps. Michael Porter's Framework for Competitor Analysis points to four indicators of a rival's likely strategic moves and countermoves. These include a rival's current strategy, objectives, resources and capabilities, and assumptions about itself and the industry. Doing the necessary detective work can be time-consuming, but scouting competitors well enough to anticipate their next moves allows managers to prepare effective countermoves (perhaps even beat a rival to the punch) and to take rivals' probable actions into account in crafting their own best course of action.