What is Competitive Intelligence or “CI”?
CI is often confused with a number of other intelligence gathering methods.
Competitive Intelligence is an ethical process by which information about competitors is obtained in a planned manner, organized and ultimately used to help executives and managers make strategic business decisions. CI is not espionage or spying although some of its roots lie in military applications. It is also not Business Intelligence, Market Research, Market Intelligence or Marketing Intelligence. In sum, CI involves coordinated, trained gathering and analysis of information that may not necessarily exist in the public domain or be otherwise available.
Part of the confusion is that many other intelligence-related activities and tactics overlap and may be used with one another to aid the marketing function in executing both its short and long term plans.
How does Competitive Intelligence work?
Perhaps it would be helpful to begin by contrasting CI with another commonly used technique. When interested in how customers view a company’s products compared to ones competitors, Market Research is generally employed. Whether by phone, mail, online or in person, the goal would be to assess awareness, perceptions, attitudes and usage of products by customers and prospects across many companies (including yours) in a given market. Using surveys or focus groups for example, one can identify competitors as well as their relative position to your company/product as well as to one another on a number of key factors. But because market research is customer-focused and does not speak to your rivals, it will not indicate any intentions your competitors have to expand their product lines, build a sales force or a new office, change pricing or seek new partners or markets.
Competitive Intelligence can complement market research findings by formulating specific questions to ask of one or more “target companies”. This is accomplished by interviewing their employees or speaking with them at trade shows and either asking them questions or just listening to and observing their activities. It is important that all responses and data be verified from multiple sources, e.g. marketing people at a trade show, engineers and a sales people called at one or more locations. If several people at different levels and functions each confirm that a new product is being developed within a certain timeframe, there is greater confidence that it will happen, and when.
Direct information gathering such as above should be augmented by monitoring news and press releases, job postings, patent filings, real estate purchases, leases and construction plans. Even discussions on social media such as LinkedIn and twitter can be analyzed to better gain insights into, and deduce potential plans that these competitors might have. For example, some high level employees might indicate their upcoming travel plans to attend meetings or trade shows in certain locations. This could suggest a pending merger or acquisition discussion or expansion into a new market.
Is Competitive Intelligence for you?
Every company should have a means of identifying and tracking the moves of their competition. Even a monopoly or oligopoly could be disrupted by an unseen company developing an alternative to its product or service.
CI provides an Early Warning System (EWS) that detects signals that can alert you that a competitor is probably planning to do something that will impact your business. So unless you are sure about who your main (and potential) competitors are, and can anticipate their current and future plans, there is a place for CI to help in your decision making.
One way to approach CI is to start with a known list of competitors. Find out as much as possible through inexpensive online sources about their personnel and finances (government and financial filings). As for marketing and sales plans, review press releases, trade show exhibitor lists, catalogs and pricing data as well as other public documents. Then shorten the target list and identify critical “gaps” that can best be filled by using CI tools. A modest investment of time and money will quickly help to determine whether there is value in continuing the process.
One last thing to consider is how your company would react if it was the target of a competitor’s CI efforts. How would you deal with questions whose answers could assist your competition to outmaneuver you? There should be a policy or set of procedures in place to protect proprietary information from such potential attacks.