Typically companies must have several characteristics to compete as analytic competitors. One thing that typically characterizes as analytical competitors is the development of at least one distinct strategic capability. Companies will not spend time and resources developing and studying analytics without an end goal in mind. Ultimately the company may want to use the analytics to gain an advantage. The company may need to study its analytics to decide where it can gain the advantage or it may focus its attention from the beginning or developing an advantage in a singular competency. If the company can gather information about customers and capabilities in its own industry, that information can most likely be gathered and measured by its competitors. The analytical competitor will need to figure out how to stay ahead of its competition and it can do that by developing a distinct advantage.
Another characteristic of analytical competitors is an enterprise level approach to analytics. An analytical competitor is going to need to have an effective method of gathering data and using it to make decisions. The company must have a sophisticated system that can be used by employees throughout the organization. Some type of business intelligence software is most likely utilized whether the company develops its own or works with an outside vendor to obtain something that meets its business needs. The company must train its employees to be skilled in both the software and the company’s approach to gathering and analyzing data so that those employees are able to make the everyday decisions that will help the company.
A third characteristic of analytical competitors is commitment from senior management. Because senior management is responsible for large-scale decisions and decides the overall direction of the company, they must be committed to use analytics to make these decisions. If a company spends a lot of money and resources on developing analytics and then the CEO makes decisions based on a gut feeling, the company will not be a true analytical competitor. Senior management must have some type of understanding of what analytics are being developed so that they can devote resources to this development and also that they can use the analytics to direct the company.
A fourth characteristic of analytical competitors is that they have a large-scale ambition to compete on analytics. The company must have the desire to compete on analytics or senior management will not devote resources towards it. It may take years before the company develops analytics that it can use to gain an advantage. Senior management will have to continue to spend time and money on analytics in order for the strategy to pay off. Then once the company has developed analytics that it can use to compete in the market, it needs to continue its using of analytics to stay ahead of the competitors who will all be working to catch up. If the company does not intend to be a true analytical competitor, it will be very difficult to maintain this commitment.
The two competitive advantages analytics offers companies are speed and accuracy. As the analytics of big data continues to grow, the speed and accuracy of data improves alongside it. This allows for better decision making at all levels of a company in a more timely matter. This also allows for a wider range (if necessary) of customers: both internal and external, to access necessary information to help complete their task. All of this is possible as long as management and leadership teams are willing to put a focus on analytics within their organization.
To use analytics as a competitive advantage, the first task is to analyze the competition. The firm should be able to take steps to overcome the competition. There can be comparisons within products or services offered by the competitors along with the buying patterns and preferences of the customers. For achieving the competitive advantage, collection of data is important. Consumer data is the main key to analyze. A structured questionnaire, data collection, and analysis of the data would help in taking a decision to gain over competition. This requires resources and commitment from the management.
I would add that while the collection of consumer data is important in understanding the needs of the customer, an organization must look internally to develop a strategic, distinct capability. Understanding what it is that sets them apart from the competition will allow the company to exploit the consumer data to identify which directions they should pursue.