Competing - Capabilities and Intentions

So strategy is hard. Anything complex usually is. And as the old adage about eating elephants goes, "we have to do it one bite at a time."

So the first bite is understanding what your competitors are capable of and what they intend to do. (I'm assuming at this point you have at least a good idea about who your competition is.)

Capabilities should speak to a "perfect world" threat assessment. You may not think that it is realistic for your competitor to corner the market on software patents but if they are pursuing expansion of their patent portfolio, they are capable of causing problems.

So what capabilities to you focus on?

You have to assume your competitor is rationale, i.e. they are not going to suddenly start giving everything away to inconvenience you. They might give things away for the short term to gain market share; they might give things away that they can then charge for related services, but they will have a rational reason for their action.

This is where intentions come to the fore. You have categorized what they have the technical capability to achieve, now you probe the likely actions they will take.

This is the art of strategy. You have to understand your competitors well enough to figure out which capabilities they will exploit to their advantage. Obviously, there will be a range of these intentions.

To help frame these capabilities and intentions, you should focus on three general scenarios:

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  Best Case - What would be the best case for you that your competitor could pursue. In other words, assume your competitor is incompetent and wanted to help you achive your strategic aims.


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  Worst Case - What would be the worst thing for you that your competitor could do? Assume they have perfect knowledge of what your aim is, and they want nothing more than to thwart you.


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  Most Likely Case - Given everything you know, what is the most likely course your competitor is likely to pursue? Assume they are rational. What would you do in their shoes? Obviously (I hope) you can't just look at one case in this situation. You have to look at a whole spectrum of options and decide what really is most likely. Don't pull punches. Your competitor won't.

Once you have these views into your opponents courses of action, your strategy work is greatly simplified. But we'll get to that next...