Overview
Therefore,discoveringandaccuratelyidentifyingmarketsignalsiscrucialtoformulatingacompetitivestrategy.
Findingsignalsfromcompetitors’behaviorisaneffectivesupplementtocompetitoranalysis.Knowledgeofmarketsignalsisalsoessentialforeffectivecompetitivebehavior.Theprerequisiteforaccuratelydecipheringmarketsignalsistoconductbasiccompetitoranalysis,thatis,tounderstandthecompetitor'sfuturegoals,assumptionsaboutthemarketanditsown,currentstrategiesandcapabilities.Asthesecondstepofcompetitoranalysis,thediscoveryofmarketsignalsisbasedontheanalysisandcomparisonofthecompetitor'sknownsituationandtheirbehaviorandmakingakeenjudgment.Theinsighttodecipherthesignalisbasedontheconstantcomparisonbetweenthebehaviorofthecompetitorandtheanalysisofthecompetitor'ssituation.
Identification
Thebasicfunctionsofmarketsignalsaretwofold:theymaybetrueindicationsofcompetitors'motives,intentions,andgoals;theymayalsobebluffs.Theso-calledbluffisasignaldesignedbycompetitorstomisleadothercompaniestotakeornottakecertainactionsfortheirowninterests.Distinguishingbetweentrueandfalsesignalsoftenrequireskeenjudgment.
Therearemanyformsofmarketsignals,andwhichformismainlybasedonfactorssuchasthebehaviorofspecificcompetitorsandthemediaused.Inordertodiscussthedifferentsignalforms,itisimportanttoindicatewhichofthemareusedasfalsesignalsandhowfalseandrealsignalsaredistinguished.
Severalimportantformsofmarketsignalsareasfollows:
Advanceannouncementofaction
Theform,nature,andtimingofadvanceannouncementItisapowerfulsignal.Advanceannouncementisaformalinformationtransmissionmethodusedbyacompetitortoindicatethatitmayormaynottakecertainactions,suchasbuildingfactories,changingprices,etc.Anadvanceannouncementdoesnotguaranteethattherewillbeaction;anannouncementmaybeannouncedbutnotimplemented,thereasonmaybethatitisnotplannedtobeimplementedatall,oritmaybecancelledlater.Thisdeclaredfeaturemakesitmorevaluableasasignal,whichwillbediscussedlater.Generallyspeaking,advanceannouncementsmayhaveseveralnon-exclusivesignalfunctions.
Firstofall,itmayindicateacertainactionintentiontopreemptcompetitorstooccupyacertainposition.Forexample,ifacompetitorannouncesamajornewcapabilitythatmaysatisfyalltheexpectedindustrialgrowthneeds,thecompanymaybetryingtopersuadeothercompaniesnottoaddmorecapabilities,becausethatwillleadtoovercapacity.AnotherexampleofIBM’stypicalpracticeisthatacompetitorcanannounceanewproductthatisnotreadytogoonthemarket,sothatthebuyerwaitstobuyitsnewproduct,anddoesnotpurchaseothercompanies’productsbeforethenewproductisonthemarket.AnotherexampleisBerkey,whichhasinvokedantitrustlawsagainstKodakbecauseEastmanKodakwaslongbeforesomenewcameraswereputintoproduction.Itrevealedthesituationofsomenewproductstopreventthesalesofitscompetitors'products.
Second,announcementsmaybeathreatifacompetitorinsistsonimplementingitspredeterminedplan.IfcompanyAlearnsofcompanyB'sintentiontoreducethepricesofcertainproductsinitsproductseries(orcompanyBannouncessuchanintention),companyAmayalsoannounceapricereduction,andthepricereductionismuchlargerthancompanyB.ThismaypreventcompanyBfromimplementingpricereductionmeasures,becauseBknowsthatAisdissatisfiedwiththelowerpriceandisreadytoengageinapricewar.
Thirdly,theannouncementmaybeatestoftheopinionsofcompetitors.Thisistousethefeaturethattheannouncementisnotnecessarytoimplement.Forexample,companyAmayannounceanewwarrantyplanandobservethereactionsofothercompanies.Iftheresponseisnotunexpected,companyAwillimplementthenewplanasplanned.IfacompetitorsendsoutanunpleasantsignalorannouncesawarrantyplanthatisdifferentfromA,thenAmaywithdrawthechangeintheplanorannouncearevisedplantosuititscompetitors.
Theaboveseriesofactivitiesmeansthefourthtypeofroleannounced,whichisrelatedtoitsthreateningrole.Announcementcanbeatoolforexpressinghappyandunhappymessagesinaconstantlyevolvingcompetitiveenvironment.Announcinganactionconsistentwithacompetitormeanshappiness,whileannouncingapunitiveactionoranactionthatisverydifferentfromthecompetitormeansunhappy.
Thefifthdeclaredfunction,whichisalsoacommonfunction,istoserveasapacifyingsteptominimizethestimulustoothercompaniesfromtheupcomingstrategicadjustments.Thisannouncementisanattempttoavoidaseriesofunfavorablerevengeactionsandwarstriggeredbystrategicadjustments.Forexample,companyAbelievesthatthepricelevelofitsindustryshouldbeadjusteddownwards.AnnouncingthisactioninadvanceandexplainingitwithspecificcostchangescanavoidmakingcompanyBconsiderthispricechangeasanaggressiveactionintermsofmarketshareandthereforetakesomepowerfulretaliation.Whenthenecessarystrategicadjustmentsarenotaggressive,thedeclaredeffectisverycommonlyused.However,thisannouncementcanalsobeusedtoparalyzecompetitorstomakethemfeelsafe,inordertohelpthecompanytotakeaction,thisisoneofmanyexamplesofmarketsignalscanbeusedasa"double-edgedsword."
Thesixthfunctionannouncedistoavoidcostlysimultaneousactionsinareassuchascapacityincrease,becausemanynewfactoriesmaycauseovercapacity.Anenterprisemayannounceanexpansionplaninadvancetohelpcompetitorsplanitsexpansionlater,sothattheexcesscapacitycanbeminimized.Thefinalfunctionoftheannouncementistosendinformationtofinancialinstitutionsinordertoachievethepurposeofincreasingstockpricesorimprovingcorporatereputation.Thisapproachmeansthatcompanies,drivenbyacertainpublicrelationsmotive,trytomaketheirownsituationpublicasmuchaspossible.Butthiskindofpublicitymaycausetroublebypassinginappropriateinformationtocompetitors.
Announcementscansometimesbeusedtounifyinternalsupportforanaction.Announcinganactionpubliclymayeliminateinternaldisputesaboutthecompany'sintentions.Announcementoffinancialgoalsalsooccasionallyplaysaroleinreunifyinginternalsupport.
Throughtheabovediscussion,itcanbefoundthatbeforeanymaterialresourcesareconsumed,afull-scalecompetitivebattlehasalreadybeenannouncedthroughtheannouncement.Thedeclaratorywarbetweencomputermemorymanufacturersanditsresultsareanexampleofthissituation.TexasInstrumentsannouncedthepriceofarandommemorydevicethatwasputintoproductiontwoyearslater.Oneweeklater,BOwmarannouncedalowerprice.Threeweekslater,Motorolaannouncedahigherpricethantheabovetwo.Thecompany'slowerprices.Afteranothertwoweeks,TexasInstrumentsannouncedapricethatwasonlyhalfofMotorola'sprice,soothercompaniesdecidednottoproducethisproduct.Inthisway,TexasInstrumentswonthebattlebeforemostoftheinvestmentwasimplemented..Similarly,usingannouncementsbackandforthmaydeterminethemagnitudeofpricechangesorcauseanewcompetitortoreducetheirplanswithoutactuallydisruptingthemarketorriskingabattletochangeorwithdrawtheplan.
Itisveryimportanttocorrectlydistinguishwhetherapre-declarationisapreemptiveactionoracomfortingbehavior.Thestartingpointformakingthisdistinctionistoanalyzewhethercompetitorscangetlong-termbenefitsfrompreemptiveactions.Ifthereissuchalong-termbenefit,itismostlikelyapreemptiveaction.Ifpreemptiveactionisoflittlebenefittothecompetitor,or,foritsownbenefit,thecompetitormaydobetterbysurprisingactions,thentheannouncementmaybeacomfortingsignal.Knowingtheabilityofacompetitor,anactionrevealedbyitsdeclarationwillcausemuchlessdamagetootherenterprisesthanifitwerenotdeclared,suchadeclarationcangenerallyberegardedasanactofcomfort.Anothercluetothecompetitor’smotivationisrelativetothetimingoftheannouncementofspecificactions.Theannouncementisfarbeforetheaction,itislikelytobeacomfortsignal,andsoon.Butitisverydifficulttofullyexplainthelaws.
Announcementscanbedeceptive,becauseannouncementsarenotalwaysexecuted.Asmentionedabove,adeclarationmaybeawaytoexpressacompany’sintentions.Inthisway,itthreatensothercompaniestocancelacertainaction,weakenacertainaction,ornotinitiateacertainactionfirst.Forexample,inordertogetcompetitorstocancelplanstoincreasecapacity,acompanyalsoannouncedaplantobuildanewfactoryinordertomaintainitsshareofindustrialcapacity,althoughitsplanwouldcausealargeexcessofcapacity.Ifdeceptionforthesepurposesfails,noforcewilldrivethedeceivertofulfillitsthreat.However,whetherathreatorotheractionisfulfilledwillaffectthecredibilityoffutureannouncementsandfuturepromises.Insomeextremecases,adeclarationmaybeawell-designeddeceptiontocausecompetitorstoexpendresourcestostepupdefensesagainstnon-existentthreats.
Competitors’advanceannouncementscanbemadeinavarietyofmedia,suchasformaldisclosuretothepress,managers’speechestosecuritiesanalysts,meetingswiththepress,andsoon.Thewayofdeclaringthechoiceisacluetothepotentialmotivationofthedeclarant.Themoreformaltheannouncement,themoretheannouncerhopesthattheinformationwillbedelivered,andthewidertheaudiencefortheannouncement.Thedeclaredmediumalsoaffectswhocanreceivetheinformation.Announcementspublishedinprofessionalmagazinesmayonlybenoticedbycompetitorsandothercompaniesintheindustry.Thisannouncementhasadifferentmeaningfromtheannouncementsmadetothemajorityofsecuritiesanalystsandnationalcommercialnewspapers.Earlyannouncementsmadetoawideaudiencemayformapubliccommitmenttotakecertainactions.Suchannouncementshavedeterrentvalue,andcompetitorswillfinditverydifficulttowithdrawsuchannouncements.
Announceactionsorresultsafterthefactsareestablished
Companiesoftenannounce(confirm)actionsorresultsafterthefacts,suchasnewfactoriesandsalesfiguresWait.Thisannouncementmaycarrysomekindofsignal,especiallywhentheleakedinformationishardtocomebyand/orthecompanyannouncesitunexpectedly.Subsequentannouncementshavethefunctionofinformingothercompaniestopayattentiontothisinformationinordertochangetheirbehavior.Likeanyannouncement,apost-mortemannouncementmaybewrongormorelikelytobemisleading,althoughthissituationdoesnotseemtobecommon.Manyofthesedata-relatedannouncements,suchasmarketshare,donotpassauditsanddonotfullycomplywithsECreviewproceduresandresponsibilities.Whencompaniesbelievethatcertaindatahasapreemptivenatureorcanconveysomekindofactioninformation,theysometimesannouncemisleadingdata.Anexampleofthistacticisannouncingsalesfiguresincludingrelatedproducts,whichincreasetheapparentmarketshare.Anothertacticistoquotethefinalcapacityofanewplant,thatis,toimplythefinalproductioncapacityastheinitialcapacity,althoughitwillrequireasecondincreasetoactuallyachievethiscapacity.Ifacompanycanunderstandorreasonaboutthismisleading,itcangetimportantsignalsaboutcompetitors'intentionsandtruecompetitivestrength.Thisactionwillclearlydistinguishbetweenthepreciseannouncementofexistingcapabilitiesandtheannouncementoffutureexpansionplans.separateit.
Competitors’publicdiscussionoftheindustry
Asituationthatdoesnotoftenhappenisthatcompetitorscommentonindustryconditions,suchaspriceAnddemandforecasts,forecastsoffuturecapabilities,andtheimportanceofexternalchangessuchasrisingpricesofrawmaterials,etc.Thiskindofcommentcarriesacertainsignal,becauseitmayexposetheassumptionsofthepublishedcommentaryontheindustry'ssituation,anditsstrategyisbasedontheseassumptions.Inthisway,suchdiscussionsmayconsciouslyorunconsciouslyattempttomakeotherenterprisesoperateunderthesameassumptions,soastominimizethewrongmotiveorthechanceofwar.Suchcommentsmayalsocontainimplicitpricerestrictions:"Pricecompetitionisstillveryvolatile,andourindustryhasdoneaterriblejobofpassingontheincreasedcoststoconsumers.""Theprobleminthisindustryisthatsomecompanieshavenotrealizedthattheircurrentpricesareharmfultoourgrowthandabilitytoproducehigh-qualityproductsinthelongrun."Or,industrydiscussionsmayimplysomerequirements,includingthatothercompaniesshouldincreasetheircapabilitiesinanorderlymanner,insteadoffallingintoanexcessiveadvertisingcompetition,donotbreaktherankorderwhendoingbusinesswithlargecustomers,orotherrankings,andaboutUnderthepremisethatothercompaniesact"correctly",hintsofcooperationwillbegiven.
Ofcourse,companiesmaycommentontheindustryinordertoimprovetheirposition.Forexample,acompanytendstoletthepricedrop,sowhencommentingontheindustrysituation,itwillmakepeoplefeelthatthepriceofthecompetitoristoohigh,evenifthecompetitorshouldmaintainitspricelevel.Thispossibilitymeansthatacompanythatpaysattentiontocompetitorcommentssignalsmustrelyonitselftoverifytheindustrysituation,andseektounderstandthecircumstancesunderwhichcompetitorscanimprovetheirpositionaccordingtotheirinterpretationofthefacts.Beclearaboutyourintentions.
Inadditiontogenerallycommentingontheindustry,competitorssometimesdirectlycommentontheactionsoftheiropponents:"DuetoXandY,therecentincreaseincustomercreditisinappropriate."Suchcommentscanexpresshappinessordissatisfactionwithacertainaction.Butlikeotherpublicannouncements,itspurposecanbeinterpreteddifferently.Thismaybeamisinterpretationofthewillingnessofcompetitorstoservethemselvesinordertoimprovetheirownposition.
Sometimescompaniespraisecompetitorsbynameorpraisetheentireindustryingeneral.Thissituationhashappenedbefore,forexampleinthefieldofhospitalmanagement.Suchpraiseisusuallyasoothinggesture,thepurposeofwhichistorelievetensionorendunpleasantactions.Thiskindofpraiseiscommonwhenallcompaniesintheindustryareaffectedbytheoverallimageoftheindustryincustomersorfinancialinstitutions.
Competitors’discussionandexplanationoftheiractions
Competitorsoftendiscusstheiractionsinpublicorusesomeforums.TheseTheoccasionislikelytospreadthediscussiontoothercompanies.Acommonexampleofthesecondapproachmentionedaboveistodiscussitsactionswithmajorcustomersordistributors.Inthiscase,thisdiscussionisalmostcertaintocirculateintheindustry.
Anenterprise'sinterpretationordiscussionofitselfcanserveatleastthreepurposes,consciouslyorunconsciously.First,youcantrytomakeothercompaniesunderstandthelogicofthisaction,andthusfollowthisaction,orsendamessagethatthisactionisnotintendedtostimulateothercompanies.Second,theinterpretationanddiscussionofbehaviormaybeapreemptivegesture.Companiesthatareabouttolaunchnewproductsorenternewmarketssometimestellthepressthestoryofhowcostlyanddifficulttheiractionsare.Thisstorymayscareothercompaniesintotrying.Finally,thisdiscussionandexplanationmayattempttoconveysomekindofpromise.Acompetitorcanemphasizethehugeamountofresourcesinvestedandthelong-termpurposeinanewfield,therefore,maketheopponentbelievethatitwillstopinthatfieldinsteadoftryingtoreplaceit.
Competitor’sstrategy
Comparedwithwhatitmighttake
ComparedwithwhatacompetitormightThepriceandadvertisingleveladopted,thescaleofnewcapabilities,thespecificproductcharacteristicsadopted,etc.,allofwhichcarrysignalsaboutmotivation.Ifacompetitorchoosesastrategicvariabletotheextentthatitmaymostseriouslydamagetheinterestsofothercompanies,thisisastrongsignalofaggression.Ifanenterprisecanactuallyharmotherenterprisesmoreseriously,butitchoosesanotherstrategythatislessharmfultootherenterprisesinitsfeasibleplan(forexample:apricehigherthanitscompetitorscanproveit),Thisisapotentialcomfortsignal.Acompetitortakinganactionthatisinconsistentwithitsownnarrowinterestsalsomeanssendingasignalofreassurance.
Theinitialimplementationofstrategicchanges
Acompetitor’snewproductcanfirstentertheedgemarket,andthisnewproductcanalsobesoldoffensivelyTothemaincustomersofcompetitors.Youcanfirstchangethepriceofsomecoreproductsinyourcompetitors'productseries,oryoucanchangethepricesofproductsormarketsegmentsthatyourcompetitorsdon'thavemuchinterestin.Anactioncanbecarriedoutatthenormaltimewhentheproducttypeisadjustedeveryyear,oritcanbecarriedoutatanabnormaltime.Theseexamplesaboveshowhowtheapproachtakenbystrategicchangescanhelpdistinguishwhetheracompetitor’sdesireistoimposeapunishmentortotakeanactionthatisbeneficialtotheentireindustry.However,thereisalsoariskofdeceptioninplacesthatareusuallyrelatedtothistypeofmotivation.
Deviatefromthepastgoal
Ifanenterprisehasspecializedintheproductionofhigh-endproductsintheproductseriesinhistory,butbegantoproducealow-endproduct,thenthisIndicatesthattherearepotentiallymajoradjustmentsinitsobjectivesandassumptions.Thetransferofgoalsinanyotheraspectofthestrategycarriessimilarmessages.Whenthiskindofdeviationoccurs,seriousattentionshouldbepaidtothesignalandcompetitoranalysisshouldbecarriedoutwithinaperiodoftime.
Departurefromindustrypractice
Adeparturefromthenormalbehavioroftheindustryisusuallyanoffensivesignal.Examplesinthisregardinclude:
Sellingproductsthathaveneverbeenloweredintheindustry,andsettingupfactoriesinabrand-newareaoronlinehome.
Crossavoidance
Whenanenterprisecarriesoutanactioninacertainfield,andthereactionofitscompetitorsistoinfluencetheinitiatorTakingactioninanotherareaiscalledcrossavoidance.Thissituationoftenoccurswhencertaincompaniescompeteindifferentregionsortheproductlinesofthesecompaniesarenotexactlythesame.Forexample:acompanybasedontheeastcoastentersthewestcoastmarket,andthenthecompanymayfindthattheresponseofawestcoastcompanyistomarchontheeastcoast.Asituationsimilartothisexamplehasoccurredintheroastcoffeeindustry.MaxwellHousehasalargemarketontheeastcoastforalongtime,whileFo1gerhasastrongforceonthewestcoast.AfterthemergerofFo1gerbyProcter&Gamble,ithasadoptedTheoffensivemarketstrategybegantointensifytheinvasionoftheEastCoastmarket.McDonald’scounterattackstrategyistocutpricesandincreasemarketingexpensesinFogg’simportantwesternmarket.Therehavebeensuchthingsinmachinemanufacturing.Deereenteredtheexcavationmachineryindustryinlate1950withastrategysimilartothatofHerpillar.DillerhasmadegreatereffortstoinvadeCaterpillar’simportantmarket.,AwidelycirculatedrumoristhatCaterpillarisplanningtoenterDiller'salwaysstrongagriculturalmachineryindustry.
Crossavoidancereactionrepresentssuchachoice,thedefensecompanydoesnotdirectlycounterattacktheinitialaction,butindirectlycounterattack.Companiesthattakeindirectcounterattackscanrefrainfromtakingdestructiveactionsanddirectlyconfronttheinvadedmarket,butclearlyexpresstheirdissatisfactionandthethreatofsevereretaliationafterWei.
Ifthecross-avoidanceactionisdirectedattheprofitablemarketoftheintruder,itcanberegardedasaseriouswarning.Ifthecross-avoidanceactionpointstotheintruder’ssecondarymarket,itmaymeanthatsomethingwillhappen,butitdoesnotwanttotriggertheintruder’sunpreparedandhastycounterattack.Acounterattackonthesecondarymarketmayalsomeanthatiftheintruderdoesnotundotheaction,thedefenderwillinvestagreaterbetinthesubsequentcross-avoidanceaction.
Ifthedifferenceinmarketshareisverylarge,thecrossavoidancestrategymaybeaveryeffectivetooltorestraincompetitors.Forexample,whencross-avoidanceactionsinvolvepricewars,companieswithalargemarketsharewillsuffermuchmorelossesthanthecompaniesthatsendthesignal.Thisfactmayincreasethepressuretoforcetheintrudertobackdown.
Theimplicationoftheaboveanalysisisthatmaintainingarestrainedpostureinastaggeredmarketmaybeausefulpotentialdeterrent.
Combatbrand
Oneformofsignalrelatedtocrossavoidanceisthebattlebrand.Athreatenedorpotentiallythreatenedcompanymayintroduceabrandthathastheeffectofpunishingthreatsorexpressingtheneedtopunish(regardlessofwhetherthisistheonlymotivationforusingsuchabrand.Forexample,theCoca-ColaCompanyinthemid-1970sAnewbrandcalled"MrPibb"(MrPibb)wasused.Theproductsofthisbrandareverysimilartoaproductcalled"Dr.Pepptxr"thatisinvadingthemarket.Thecompanyhasadoptedacoffeebrandcalled"Horizon"inthemarketthatVogelisinvading.ThisproductisverysimilartoVogel’sproductsintermsofcharacteristicsandpackaging.FightingbrandscanbeusedasawarningordeterrentItcanalsobeusedasanassaultforcetoabsorbthemainimpactofacompetitiveattack.Beforeasevereattackbyacompetitorbegins,thisbrandservesonlyasawarninganddoesnotoftenprovidesupportandpromotion.Acombatbrandcanalsobeusedasabigbattle.Aspartofthis,itbecomesanoffensiveweapon.
Secretantitrustlawsuit
Ifacompanyfilesasecretantitrustlawsuitagainstacompetitor,thisActioncanberegardedasasignalofdissatisfaction.Insomecases,itisaharassmentordelaytactic.Therefore,secretlitigationisverysimilartocross-avoidancestrategy.Becausesecretlitigationcanbewithdrawnbytheproposingcompanyatanytime,asopposedtoprice-cuttingcompetition,etc.Strategically,thisisapotentialmilddissatisfactionsignal.Thissignalmaysay,"Thistimeyouhavegonetoofar,itisbettertowithdraw."Thiscanavoidthedangerofdirectconfrontationinthemarket.BeaWhenaweakercompanyaccusesastrongercompany,thisaccusationmaybeawaytoalertthestrongercompanysothatitwillnottakeanyintrusiveactionswhilethelawsuitispending.IfthestrongercompanyfeelsthatitisunderlegalreviewUnderthreat,itsstrengthwillbeeffectivelyneutralized.
Whenlargecompaniesaccusesmallcompanies,secretantitrustlawsuitsmaybeawhitewashedmethodofpenalizing.Duringtheperiod,itbearsextremelyhighlegalcostsandrestrainsitsattentioninmarketcompetition.Accordingtotheabovediscussion,litigationisakindofpartythatwarnsweakercompaniesthatattempttoinvadetoomuchmarketislessdangerous.PendinglitigationmaypasslegalactionPutitasideforthetimebeing,andre-proposeitselectively(makeweakcompaniesbeartheexpenseandconsumption),iftheweakercompaniesmisunderstandthesignal.
Identifythesignalbasedonhistory
Researchingtherelationshipbetweenacompany’sannouncementsandactionsorbetweenvariousotherpotentialsignalsandconsequencesinhistorywillgreatlyimprovetheabilitytoaccuratelydistinguishsignals.UnintentionallyrevealingtocompetitorsbeforetheyactedResearchonthesignalsofthiscompanywillbeveryhelpfultodiscoverthenewunconscioussignalsofthiscompany.Beforetheproductchanges,doesthesalesdepartmentalwaystakespecificactions?Isthenewproductalwayslaunchedafterthenationalsalesmeeting?NewproductlaunchesInthepast,didthepricesofexistingproductsalwayschangefirst?Whentheabilityutilizationreachesacertainlevel,doestheopponentalwaysdeclareIncreaseinreportingcapacity?andmanymore.
Thereisnodoubtthatwhendecipheringthesesignals,thereisalwaysthepossibilityofdeviationfrompastbehavior.Theidealcompletecompetitoranalysiswilldiscoverinadvancetheeconomicandorganizationalreasonsforthisdeviation.
Whethertheattentiontomarketsignalscandistractenergy,thesubtletyindecipheringmarketsignalsmayleadtoaviewthattoomuchattentiontomarketsignalsisakindofenergythatcontradictsproductiondispersion.Oneviewisthatinsteadofguessingthedisorderlybehaviorsandsignalsoftheopponent,itisbettertospendtheirtimeandpowerincompetition.
Althoughyoucanimagineasituation,thatis,seniorleadersareconcentratedonvarioussignals,sothattheyneglectbusinessmanagementandobtainastrongstrategicposition.Butthiskindofimaginationisnotenoughtojustifyignoringvaluablepotentialinformation.Strategyformulationitselfcontainscertainclearandunclearassumptionsaboutcompetitorsandtheirbehavior.Marketsignalsmaygreatlyincreasethecompany'sunderstandingofcompetitors,andthereforeenhancetheaccuracyoftheseassumptions.Ignoringmarketsignalsisequivalenttoignoringallcompetitors.