You communicate your strategy to competitors when you share it publicly. Use this opportunity to tell them what you want them to know about your strategy; others things you must keep secret.
One of the roles of top management is communicating their strategy. You communicate internally to align your own organisation, and external communication will be to investors, customers, business partners and competitors. Don’t expect to send different messages to each – they can all access your equity research and investor relations pages!
When designing your communication, consider what you want your competitors to hear?
You can dumb your strategy down and make bland empty PR statements, but this will not engage stakeholders. And you miss the opportunity to impact your competitors response. But better to say nothing than mislead, which will undermine your long term reputation with all stakeholders.
What message can you send that will cause them to do what you want?
For example, some leaders have a market share “red line” that they will defend at all costs. It would be useful for the competitors to know this red line, to deter them so that you never need to invest in defending it. Of course, words will not be enough, you will need to back them up with aggressive action when the red line is breached. A stubborn and vengeful competitive reputation can be the cheapest defence in the long run.
Another example – if you can invest in capacity to produce for one of two markets, if you communicate your choice publicly, it will change competitors pay-offs. If you are jumping right, it is rationale for them to jump left. Of course they might decide to copy you irrationally, but at least you tried to train them to share the market nicely!
A reputation for inevitability can be used on offence too, by cultivating a reputation as a relentless steamroller – once you are committed, you will win, the only choice for competitors is between a long and expensive losing fight or a quick surrender.
Of course the details of your strategy should be kept secret, especially if you are attacking from a weak position. Your challenge is to establish yourself before the incumbent can bring their superior resources to bear to block you. So you should keep your “thin-end-of-the wedge” attack path, objectives and ambition hidden for as long as possible. You can encourage the competition’s natural desire to believe that your ambition is limited to a small niche of their least attractive customers.
You want to convince competitors that you are either harmless or invincible – or best of all, both at the same time. Their biggest reaction will come when they think you are a threat they can do something about.