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Y O U C A N L E A R N A L L
Y O U N E E D T O K N O W
A B O U T T H E C O M P E T I T I O N ’ S
O P E R A T I O N B Y L O O K I N G
IN HIS GARBAGE CANS
STUDY THE COMPETITION
W
hether a company is
long established or in its
start-up phase, a key
strategic issue is its competitive
advantage—the factor that gives it
an edge over its competitors. The
only way to establish, understand,
and protect competitive advantage
is to study the competition. Who is
competing with the company for its
customers’ time and money? Do
they sell competitive products or
potential substitutes? What are their
strengths and weaknesses? How
are they perceived in the market?
For Ray Kroc, the US entrepreneur
behind the success of fast-food
chain McDonalds, this reportedly
involved inspecting competitors’IN CONTEXT
FOCUS
Analytical toolsKEY DATES
1950s Harvard academics
George Smith and C. Roland
Christensen develop tools to
analyze companies and
competition.1960s US management
consultant Albert Humphrey
leads a research project that
yields SOFT analysis, the
forerunner to his later
SWOT analysis.1982 US professor Heinz
Weihrich develops the TOWS
matrix which uses the threats
to a company as the starting
point for formulating strategy.2006 Japanese academics
Shinno, Yoshioka, Marpaung,
and Hachiga develop computer
software that combines SWOT
analysis with AHP (Analytic
Hierarchy Process).