The company’s strategy can be deduced two main ways: what it says and what it does.
What a Competitor Says
What a Company Does
Company objectives can have many different focuses. The company may focus on short or long term financial objectives. Sometimes they might be to increase market share or their growth rate or gain technical leadership. Often these objectives are common to companies in an industry, (i.e. growth rate is an objective in social media and market share is in automotive.)
If you look at the reporting structure of the company hints can be gleaned as to objectives, if the VP of supply chain reports to the CEO cost reduction or capital improvements might be the objective. If you can understand the company’s tolerance to risk, technology leadership, management incentives, regulatory restrictions or other corporate level goals, one can develop a better understanding of the company’s objectives
The company’s assumptions about the company’s abilities to achieve their objectives and their assumptions about the industry along with their assumptions about the economy one can begin to understand the current and future moves the company will make. There are several factors that are observable in secondary literature, these include industry trends and unwritten rules, product experiences, beliefs about the competitive position, geographic factors and past experience.
A company’s resources and capabilities define its ability to respond, with its strategy, objectives and assumptions defining how a company might want to compete. The difference is crucial. Capabilities are discovered using a SWOT analysis with strengths defining capabilities. Understanding a company’s ability to adapt to current environments will give you an idea of how long a competitive opportunity might last. Kodak was never able to reposition the film business to adapt to digital competitors. Their investment in fixed assets and a bloated organizational structure lead to the company’s demise.
Compiling the company’s objectives, assumptions, strategies and capabilities will allow one to build a profile of potential offensive and defensive moves a company might make. One can even gauge the strength and speed of a potential response.
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