Competitive Moves: A Note on Information and Secrecy

In part because of the proliferation of the business press and in-creased requirements for public filings, companies are disclosing more and more about themselves. Although some of this is legally required, much of what is written in annual reports, stated in inter-views or speeches, or comes out via other means is not statutorily re-quired. Disclosure may stem more from concern with the stock mar-ket, managers’ pride, inability to control statements by employees, or simply from lack of attention.

As should be clear from the discussion in this chapter, informa-tion is crucial to both offensive and defensive competitive moves. Sometimes selective release of information can serve very useful pur-poses, in market signaling, communicating commitment, and the like; but often information about plans or intentions can make it a great deal easier for competitors to formulate strategy. For example, if an impending new product is disclosed in detail, competitors will be able to focus their resources in preparing a response. Contrast this situation with the one in which disclosure of the new product‘s nature is very vague; competitors are then obliged to prepare a range of defensive strategies, depending on what shape the new product ac-tually takes.

Selective disclosure of information about itself is a crucial re-source the firm has in making competitive moves. The disclosure of any information should only be made as an integral part of competitive strategy.

Source: Porter Michael E. (1998), Competitive Strategy_ Techniques for Analyzing Industries and Competitors, Free Press; Illustrated edition.

Leave a Reply

Your email address will not be published. Required fields are marked *