Competitive Intelligence For Dummies
Competitive intelligence (CI) is the process of legally and ethically gathering, interpreting, and acting on information about an organization's competition or other forces that may affect its future success. CI reveals opportunities and detects early warning signs so companies can seize market opportunities and bypass organizational disasters. So get up to speed on critical CI concepts, the benefits of CI, where you can find good information sources, and how to pinpoint future-focused intel.
5 Key Concepts of Competitive Intelligence
To perform competitive intelligence (CI) effectively, you need to have a solid understanding of what CI is and what it's not. By spending a few moments reviewing the following list of key concepts and committing them to memory, you'll be well on your way to CI mastery:
CI isn't spying. Professionals don't participate in or condone the use of illegal or unethical means of gathering competitor intelligence. True CI involves maintaining a standard of "integrity above reproach."
Competitive intelligence isn't just competitor intelligence. Although part of CI's job is to keep an eye on the competition, it also needs to keep an eye on other forces that drive the market and the industry, including technology, economic conditions, ideologies, the media, and changes in laws and regulations.
The CI process involves four essential steps: planning, gathering, analyzing, and executing. The CI team must plan what kind of questions it wants to answer and develop a strategy for gathering the necessary info. The CI team then gathers relevant information from a variety of sources, and one or more analysts on the team interpret its meaning. Finally, the CI team presents the analyzed intelligence to the organization's leaders who decide whether and how to act on it. If any of these steps is missing or performed poorly, the value of the CI is compromised or nonexistent.
CI is serviceoriented. Think of CI as a product and your organization's decision makers as clients. Part of the CI team's role is to find out the type of intelligence the organization's decision-makers need in order to gain a competitive edge.
CI seeks to capitalize on a constant succession of momentary advantages. Successful companies are agile. They respond quickly in order to capitalize on emerging opportunities and avoid potential pitfalls. They don't rely solely on what brought them success in the past.
9 Ways that Competitive Intelligence Can Help Your Organization
Decision makers in your organization may need to be convinced that CI is indeed valuable. You can't simply stick a dollar figure on CI, but a list of benefits that highlight exactly how CI functions as a support system for the entire company can be quite persuasive. CI can help your organization do the following:
Make smarter decisions: Well-informed decisions are better decisions.
Gain first-mover advantage: By monitoring the forces that impact your business, you become more in tune with customer needs, growing trends, and other factors that reveal opportunities for new products, services, and ways of doing business.
Avoid costly mistakes: If you're about to make a major investment, acquire a business, change suppliers, introduce a new product, or engage in any other costly endeavor, CI can help you assess the risk and potential upside and avoid making a costly mistake.
Avoid nasty surprises: Good CI is all about being proactive rather than reactive. When you're continually monitoring what's likely to impact your business, you're less likely to be surprised by competitor innovations, cost-cutting technologies, changes in industry regulations, disruptions from suppliers, and so forth.
Anticipate competitor moves: Developing intelligence about a competitor's goals, its ability to achieve those goals, and its customers, suppliers, and partners can enable you to see where the company is going and why. It can also help you develop your own strategies in response.
Predict changes in the industry: Changes in production, materials, distribution, and other factors can significantly affect the way you do business and the cost of doing business — as well as the way you should be doing business. CI delivers the intelligence you need to lead your field.
Identify unmet customer needs: The CI team can "listen in" to what customers say online, over the phone when speaking with customer service representatives, and even in discussion forums hosted by competitors to identify unmet needs that may lead to ideas for new products and services.
Improve your organization internally: Benchmarking your procedures and processes against the best in the business can significantly improve efficiency and quality.
Discovering cost-saving technologies, products, and processes: History shows that the first competitor in any industry to take advantage of an emerging technology tends to gain a competitive advantage. CI can give a company a heads-up on emerging technologies, products, and processes that can ultimately save time and money.
If someone in your organization questions the return on investment of CI, remind him of the cost of not doing CI in terms of missed opportunities and costly mistakes from making uninformed decisions.
3 Great Sources for Gathering Competitive Intelligence
The Hollywood version of gathering competitive intelligence might show some phone tapping, computer hacking, or night-time activities involving flashlights. Illegal! Fortunately, plenty of competitive intelligence is freely available, and you don't need to break a sweat over the methods.
Here are some great (and legal) sources of information to consider as you build a competitive analysis:
|Sources inside your organization||CEO and other executives, board of directors, salespeople, marketing managers and personnel, customer-service reps, delivery personnel|
|Sources outside your organization||Customers, suppliers, distributors, financial analysts, SEC filings, online databases, social media, Dow Jones, LexisNexis, newspapers, trade journals, white papers, speeches and presentations, catalogs, patent databases, analytics|
|Events||Trade shows, conventions, conferences, standards organizations|
When it comes to internal sources, think big and target everyone within your organization. Why? Because your co-workers are already doing competitive intelligence as they perform their jobs on a daily basis. A big part of doing CI consists of formalizing these activities and building a system around them so that you're constantly mining information from these sources, analyzing it, and getting it to the decision makers who need it to formulate future strategies.
6 Steps to Finding Future-Focused Competitive Intelligence
When gathering competitive information, you may begin with some general data-mining on a topic and discover that what you're researching is far from a new idea. The information isn't especially helpful because it's historical information, and good competitive intelligence focuses on the future. Where do you go to find future-focused intelligence? Consider the following approach:
Look for a topic-focused standards group.
This strategy is particularly good when researching any new technology. Corporations, trade associations, and universities often contribute to formulating the standards for new technologies. You can often find leads to experts who can provide the valuable insights you're looking for.
Research patent filings.
You can find out about some emerging technologies by using the U.S. Patent and Trademark Office website to find out about any work that may have been done in this area and the names of the major innovators.
Gather names and research them online.
As you conduct your research, gather the names of experts in the field. They're the people whose names pop up again and again on websites and in articles related to the topic of interest. These experts are on the cutting edge, so they're likely to be valuable sources of future-focused data.
After your list of experts is complete,
Do an Internet search for each expert on your list to gather as much information as possible, including contact information, the company or university where they work, and any groups they belong to.
Search for these experts on social-media sites, especially sites such as LinkedIn that list professional résumés, articles, and expertise. These sites may offer information that you can't find by performing a generic Internet search.
Search for white papers, articles in trade publications, and anything else that may reveal emerging information on your topic of interest and provide insight into each expert's knowledge of that topic.
Keep in mind that white papers and articles may not appear in a general Internet search. You may need to perform your search on trade publication websites and other industry- or technology-specific sites.
Interview the experts.
Develop a list of questions you have based on your research and the goals of your inquiry, and then contact the experts and interview them. Don't rely solely on what's already in print.
Pull it all together.
Create a spreadsheet or table that includes all the key findings.
As you discover bits of information, ask Who? What? When? Where? Why? and How? Then perform additional research to answer those questions. Interrogating the data in this manner increases the breadth and depth of your knowledge and insight.