Understanding the strengths and weaknesses of your competition is paramount if you want to shape opportunity. Zhuge Liang, the great military strategist of old China wrote:
“A skilled attack is one against which opponents do not know how to defend; a skilled defense is one which opponents do not know how to attack.”
Mounting a skilled attack requires the ability to analyze and synthesize marketplace intelligence. The ability to convert marketplace intelligence into actionable strategy and tactics is both science and art. The meaning of intelligence is open to different interpretations and quite often results in fuzzy, ambiguous conclusions. Effective strategists have the ability to wade through this “fog of war” and generate the navigational beacons necessary to guide a campaign.
There are many techniques for analyzing intelligence. Many consulting boutiques have developed sophisticated processes and technologies for competitive analysis. While many are quite excellent, their cost and the resources required to utilize the processes are prohibitive for all but the largest enterprises. Michael Porter, in Competitive Analysis (Chapter 3 – A Framework For Competitor Analysis) lays out a fundamental process for competitive analysis.
A technique for competitive analysis that we have adopted at vSente is based upon the military concept of center of gravity. Center of gravity analysis establishes the relative strengths and vulnerabilities of two or more adversaries as they compete for a mutually desired objective. In war this objective is typically terrain. In business the battle is for customers.
Proper CG analysis will tell you what to attack and what NOT to attack. Applying CG analysis to business is a process of understanding and exploiting the relationships between two or more adversaries competing for market share. The intent of CG analysis is to uncover exploitable vulnerabilities within your adversary. If you’re simply projecting your strength against your competitor’s strength then you have a war of attrition on your hands. Some marketers follow a single-dimensional approach to competitor analysis by focusing on only their strength… and then promoting this strength… oblivious to how this measures up to competitor strengths and/or customer needs. The concept of center of gravity has received much attention by the military as the basis for formulating battle strategy.
Carl von Clausewitz the nineteenth century Prussian soldier and writer was the first to apply the term “center of gravity” to warfare. He described a center of gravity as,
“the hub of all power and movement, on which everything depends.”
Clausewitz clarifies this description by stating that:
“the ultimate substance of enemy strength must be traced back to the fewest possible sources, and ideally to one alone.”
Other writers have used terms such as “vital centers,” “key nodes,” “decisive points,” or “critical vulnerabilities” to approach the same concept. The “hub of power and movement” itself is the “center of gravity.”
Take the “hub” away and the enemy system ceases to function or the enemy ceases to act against you. That “hub” has certain characteristics, among them critical vulnerabilities. These vulnerabilities will naturally flow into target sets. From these target sets, individual targets can be identified and attacked as required to support the campaign’s objectives. Given proper analysis, successfully attacking those targets will decisively affect the center of gravity.
Center of gravity represents strength. Your strength. The strength of your adversary(s). All relative to the needs of the customer.
Dr. Joe Strange has developed a center of gravity methodology called the CG-CC-CR-CV model:
CG – Center of Gravity
CC – Critical Capabilities
CR – Critical Requirements
CV – Critical Vulnerabilities.
Dr. Strange describes15 how each one of these links can be manipulated in order to neutralize competing centers of gravity. He defines a center of gravity (CG) as
“primary sources of moral or physical strength, power and resistance.”
In business, specific examples of a center of gravity include; offering, infrastructure, relationships and execution. A CG is essential to the conduct of the enterprise, represents a dominant characteristic, is a necessary system from which power and movement is derived, represents a target that an adversary might strike, can offer it’s own resistance and can strike it’s own blows.
The ability of a CG to perform certain functions at the strategic, operational or tactical level is what makes it a center of gravity.
Strange labels these functions “critical capabilities” CC. He defines them as:
“primary abilities which merits a Center of Gravity to be identified as such in the context of a given scenario, situation, or mission.”
Examples of critical capabilities in business include the ability to; finance operations, produce consistent products, achieve desired quality, develop sustainable customer relationships, provide appropriate levels of service and support, project the desired brand or reputation, and, command and control employees, vendors and partners.
Disabling a Critical Capability will alter the nature of the COG in such a powerful manner that the COG is crippled and ceases to be a primary source of strength.
Critical Requirements CR are:
“essential conditions, resources and means for a Critical Capability to be fully operative.”
Examples of critical requirements needed to support critical capabilities include; a sustainable need for the product or service, a loyal customer community, a good industry reputation, decisive leaders, access to skilled labor, a motivated work force, the ability to price above cost, good labor relations, and a positive press image.
A thorough systems analysis of each of a COG’s Critical Capabilities will reveal many requirements that the CC needs in order to function. These requirements must be evaluated to determine if they are critical to the CC. Only those requirements that, if removed, result in disabling the CC can be labeled as Critical Requirements.
Dissecting these Critical Requirements will reveal some CRs or elements of them that are Critical Vulnerabilities CV – deficient or vulnerable to neutralization, interdiction or attack.
Examples of critical vulnerabilities open to attack include; a poor quality reputation, high labor costs resulting in uncompetitive price, bloated management making slow decisions, bad service disenfranchising loyal customers, arrogant relationships with vendors and suppliers, and a cash flow crisis.
Because these vulnerabilities are critical, successful prosecution of one of them will cause a chain reaction back up through the CR-CC-CG chain that results in the neutering of the CG. Thus, CVs indicate the types of target sets that should be pursued in order to affect an enemy center of gravity.
The Attack Planner Worksheet contains a detailed exercise designed to determine the center of gravity of you and your top competitor.
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