The Four Corners Analysis helps understand and predict the actions and reactions of competitors in the market. It focuses on four key aspects of a competitor's strategy:
Drivers: Analyze the factors that motivate and influence a competitor's actions, such as financial performance, market share, or customer satisfaction. This helps in understanding the rationale behind their strategic decisions.
Current Strategy: Assess the competitor's current strategy, including their market positioning, product and service offerings, pricing, and distribution channels. This helps identify their strengths and weaknesses, as well as potential opportunities and threats.
Capabilities: Evaluate the competitor's resources, capabilities, and core competencies. This includes their financial resources, human capital, technological capabilities, and organizational structure. Understanding their capabilities allows you to anticipate their potential strategic moves.
Future Goals: Determine the competitor's short-term and long-term objectives, as well as their appetite for risk and growth. This helps in predicting their future strategic direction and potential actions.
This framework relies heavily on the accuracy and completeness of the information gathered about competitors, which may be difficult to obtain or may change over time.
It assumes that competitors act rationally and consistently, which may not always be the case.