How to Conduct Purposeful Competitive Intelligence Analysis
To approach competitive intelligence with a practical mindset, think about it in terms of what you want to accomplish: your purpose. You may want to identify unmet customer needs, predict what a competitor is going to do, or decide whether to invest in a new technology.
Don’t spark turf wars with other departments. As you begin to formulate a purpose and scope for your CI program, partner with other departments to formulate your purpose and scope and operate as a service provider for these other departments. Provide them with the information and intelligence they need without taking credit for the work in order to gain the cooperation and support required to improve your impact.
To avoid the fallout of office politics, consider drafting a purpose statement that clearly communicates CI’s role as a service provider.
Identify unmet customer needs through competitive intelligence
You can find out a great deal from customers, especially when they’re calling to complain about the poor service they received or posting a complaint in a discussion forum. Every complaint represents a need that’s not being met. One purpose of CI is to identify these unmet needs so that your organization can work toward meeting those needs.
Don’t limit your scope to the unmet needs of your own customers. Look to the unmet needs of your competitors’ customers and monitor any unmet customer needs that your organization is uniquely qualified to address, even if the need is outside your traditional market.
Discover nontraditional customers through competitive intelligence
Finding new, nontraditional customers for existing products can be highly profitable. A number of years ago, a university discovered that cornmeal (a byproduct of corn) was a great organic fertilizer and weed control product for grass. As a result, the company processing the corn was able to expand into an entirely new and very profitable market.
Sometimes nontraditional customers discover a new use for an existing product. Get to know the people who use your product and what they use it for.
Identify new markets through competitive intelligence
CI can help identify new market opportunities and serve as a valuable tool for assessing the potential upside and downside of entering a new market. The info you gather can help you gauge demand for your product or service, size up potential competitors, and determine whether anyone has already tried entering this particular market and whether and why they succeeded or failed.
In addition to helping identify potential opportunities, CI can also prevent you from wasting valuable resources on unprofitable ventures.
Keep abreast of changes in your industry through competitive intelligence
Even standard operating procedures across an industry are subject to change, and when competitors start to change the way they do business, the last organization to take action is usually the loser. Your company should continuously monitor changes in your industry (using CI) and implement those changes when appropriate in order to remain competitive.
Predict competitor activities through competitive intelligence
One purpose of CI is to keep an eye on the competition. The intention isn’t to mimic what competitors do but to predict what they’re going to do so that you can respond in a way that gives your organization a competitive advantage. CI can help you identify a variety of market or industry scenarios and plan several moves ahead to give you the lead and help you maintain it.
Respond to economic change through competitive intelligence
Most businesses rise and fall based on economic conditions, but the relationship between sales and the economy isn’t always so predictable. Yes, the economy affects what consumers buy and how much money they spend, but a downturn in the economy can trigger increased spending in certain markets.
Economic data is readily available. In the United States, the federal government provides a lot of this information about U.S.-based companies. In addition, most investment firms have a chief economist who issues periodic updates about companies those firms invest in; most of these updates are publicly available.
By analyzing and comparing different views of the emerging economy, a CI team can effectively synthesize the data and help to proactively prepare for economic shifts.
Capitalize on consumer trends through competitive intelligence
A big factor in maintaining a competitive advantage is the ability to predict consumer behavior. By combining weak signals (uncertain or ambiguous data) and using special tools, such as analytics and scenarios, the CI team can pick up on trends and develop predictions that help senior management capitalize on opportunities and avoid threats.
To understand the value of weak signals, assume that you stumble across a job listing that a competitor has posted advertising for an engineer who can design specific types of computer chips. (That’s a weak signal.)
As you dig deeper, you discover that the chips specified in the ad involve an entirely different market than what that competitor has historically been involved in. That’s a slightly stronger signal that may suggest that the company is planning to enter a new market. However, you still need to perform additional research to confirm your suspicions or find out what’s really going on.
By the time a consumer trend negatively impacts your bottom line, you’ve probably missed your chance to respond.
Identify good investments through competitive intelligence
Before your organization puts time, money, or other resources into a course of action, decision makers should employ CI to investigate the pros and cons of the investment and look into other options. You can avoid costly mistakes by performing due diligence before moving forward on any decision to invest substantial amounts of money or other resources.
Make decisions on acquiring or partnering with another organization through competitive intelligence
Acquiring or partnering with another organization is essentially marriage at the corporate level. To avoid potential pitfalls, CI should perform a background check on the targeted organization and analysis of whether the partnership or acquisition is likely to further your organization’s strategic goals.