Monday, April 1, 2013

Competitor Analysis in Foreign Policy

While this course focuses mostly on strategy in a business context, the study and application of strategy is widely applicable. As I read the "Competitor Analysis" book excerpt, I was struck by how similar foreign policy and business concerns can be. Here is a quick breakdown of the major points in the excerpt and how they apply in foreign policy:

  • Identify your competition. 
    • Countries identify competitors for power and natural resources. In the Far East, China and the U.S. would consider themselves competitors for both. States also identify "enemies" sometimes, just as a corporation might feel particularly spiteful against a rival or actively seek to undermine or destroy them.
  • Do you have unanticipated competitors?
    • Just as companies may have unanticipated competition over the long term, countries have difficulty identifying threats over time. Twenty-five years ago, the U.S. and the Soviet Union were bitter enemies. Now, Russia and the U.S. are trading partners, although their friendship is admittedly somewhat tenuous. 
  • What are the strengths and weaknesses of your competitors?
    • Nation-states overestimate or understate competing countries or enemies all the time:
      • Overestimate: The U.S. treats the possibility of a nuclear Iran as a catastrophic concern. The United States has more than 10,000 nuclear weapons in its stockpile, whereas Iran is essentially devoting its entire economic and political efforts to creating one. 
      • Underestimate: Recent statements (mostly off-the-record, due to the nature of the content) from U.S. analysts indicate that North Korea cannot hit the mainland United States with a missile. South Korean officials believe that the evidence suggests otherwise, so this could be a case of American hubris. Hopefully we don't have to find out.
The business reading also discusses the "aggression factor," or how aggressively companies defend and stake out their turf. That can easily be read as a foreign policy concern, as well.

There is one strategic element that plagues U.S. policymakers far more than U.S. business leaders: time-frames. To be sure, businesses must implement strategy quickly and effectively in some cases to secure their position. However, U.S. foreign policymakers have to deal with turnover of top leadership every 4-8 years. This turnover (i.e. elections) often means rethinking old strategy or trying to implement very different strategies on a fairly regular basis. While businesses may have five-year plans or similar long-term strategies, such plans are more difficult for American foreign policymakers to develop or certainly implement.

How can you develop effective strategy when you are faced with vast uncertainty, including the direction of your organization or the stability of your own job?

[1] "50 Facts About U.S. Nuclear Weapons," Brookings Institute, (accessed 1 April 2013).
[2] "South Korean officials: North Korean rocket could hit U.S. mainland," CNN (accessed 1 April 2013).

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