What are they up to now? Competitive intelligence can provide strategic insights
All too often, businesses seek to develop better products and services without knowing enough about their competition. To truly hone the edge they’re looking for, companies need to constantly ask one simple question: “What are they up to now?” And the best way to get answers is through competitive intelligence — the process of legally and ethically gathering data on competitors.
This article lists four main principles of a competitive intelligence policy and explains how to execute it.
A sidebar describes how competitive intelligence software can help.
All too often, the competitive efforts of many companies are internally focused. These businesses seek to develop better products and services without knowing enough about their competition.
To truly hone the edge you’re looking for, you need to constantly ask one simple question: “What are they up to now?” And the best way to get answers is through the practice of competitive intelligence.
Years ago, the notion of gathering detailed information on competitors may have been negatively referred to as “corporate espionage.” Nowadays? Not so much. This is the information age, when companies have a strategic imperative to analyze every bit of data they can on what the competition is doing at all times.
Of course, “at all times” doesn’t mean “at any cost.” Competitive intelligence is the process of legally and ethically gathering data on competitors. And your purpose isn’t to undercut what they’re doing but to anticipate trends, compare best practices and target opportunities.
Specifically, you need to stay apprised of your competitors’ product and service lines, financial standing, and market position. You should also track whether the competition is expanding or contracting. Mergers, acquisitions or strategic alliances could mean you need to play defense, while closures or bankruptcy may mean it’s time to go on the offensive.
Before you dive into competitive intelligence, it’s important to establish a formal policy governing your efforts. (If you’ve already gotten started, perhaps slow down and integrate a policy going forward.) Generally, a competitive intelligence policy should follow four primary principles:
- Be authentic. When gathering information, don’t hide behind secret identities or misrepresent your affiliation. For instance, if you sign up to receive marketing e-mails from a competitor, use an official company address and, if asked, state “product or service evaluation” as the reason you’re subscribing.
- Respect all formal agreements. In the course of gathering competitive intelligence, you or your employees may establish sources within the industry or even with a specific competitor. Be sure you don’t encourage these sources, even inadvertently, to violate any standing confidentiality or noncompete agreements.
- Abide by all intellectual property rights and laws. As you may know, the technicalities of intellectual property law are complex. It’s not particularly difficult to run afoul of the rules unintentionally. When accessing or studying another company’s products or services, proceed carefully and consult your attorney before putting any lessons learned into practice.
- Monitor consultants closely. When it comes to competitive intelligence, the Achilles’ heel of many companies isn’t their employees but outside consultants. If you engage third parties for any purpose, be sure they know and abide by your policy.
The Internet provides a good starting point for competitive intelligence. Begin with your competition’s websites. You should know the ins and outs of their sites as well as you do your own. Look to relevant industry websites and blogs, too. And don’t forget social media: Facebook, Twitter and LinkedIn.
In addition, there are “big picture” websites to peruse. The Competitive Intelligence Resource Index, for instance, runs Ciseek.com — a portal for those looking for information on the concept. Also check out Hoovers.com for “comprehensive insight and analysis about the companies, industries and people that drive the economy.”
The printed word is your friend, too. Assign one employee (or more) to keep tabs on national and local newspapers, industry publications and journals, and any other useful print sources. Your competitors’ brochures, catalogs, press releases, annual reports and other collateral should be must-reads as well.
Finally, at its most basic level, competitive intelligence can simply involve talking. Encourage yourself and your employees to chat up virtually anyone who might hold a nugget of useful knowledge — customers and prospects, bankers, business contacts, and referral sources.
Naturally, you have to do more than just gather data. You must be able to verify its accuracy, a critical component of competitive intelligence, and analyze it.
Ensuring accuracy comes down to quality sources and fact-checking anything of which you’re uncertain. The task of analysis lies with you and your management team. Fortunately, there’s software that can make the job much easier.
Competition, by its very definition, means putting at least two teams on the field. And, in any given business sector, there are typically multiple players battling for supremacy. Winning depends more and more on having the best data and drawing the deepest meaning from it. Competitive intelligence can get you there.
| Sidebar: Put your data to work with competitive intelligence software
So you’ve amassed a huge amount of information on your competitors. Now what can you do with it?
As is the case for just about any aspect of doing business, investing in the right software helps. Multiple developers offer competitive intelligence software that enables users to locate, index, organize and analyze a broad range of data.
You can pinpoint key performance indicators to track and scrutinize. You’re able to set up dashboards that allow you — and everyone involved in the effort — to see the latest knowledge gathered. And you have the power to generate reports and presentations that maximize the value of the data you’ve found.
As with any technology purchase, perform a cost/benefit analysis before cutting the check. If you’re starting slowly with competitive intelligence, you may not need the most expensive system. Then again, if you’re ramping up your efforts, a pricier package may give you room to grow. A couple of interesting names to check out are RivalMap and Digimind.
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