Competitive Intelligence is the act of researching what your competition is up to. Let’s face it, you are not the only one selling what you sell, be it a product or service. That means that some other company is targeting the same customers as you are, and there are only so many pieces of the pie to go around. It is at this point that the importance of competitive intelligence cannot be understated. If you are able gather enough information, you will be able to find out and capitalize on the competition’s strengths and weaknesses.
Not only that, because if you ignore what your competition is doing, you run the risk of putting your organization in a reactive stance instead of a proactive stance. If the Blackberry people at RIM didn’t pay attention to what the Iphone people at Apple were doing, like not paying attention to the latest apps, or release dates, or even patents, etc, but Iphone was investigating what was going on with the Blackberry, who do you think would have an advantage?
Granted, these organizations may be a tad larger than yours, so you might say to yourself of course they need to check each other out to see what is going on. So goes the same for you regardless of what market you are in. If you are competing in the same market for the same customers, then you need to know what other companies like you are doing.
The collection of a competitors information, however, should not be a random task. As in each step in your marketing plan, you must first ask the right questions and then start looking for answers. Collecting information at random will not be the most efficient way to using your competitive intelligence. You must first know what you are looking for so afterwards you can decifer the information you have collected.
Questions such as, what is their pricing, how do they pay their sales people, when is their next product release, what was their last large machinery purchase, why did they change their major supplier, how long do they sign their contracts for . . . These types of questions will have specific answers that will help you gain an advantage.
Obviously larger public companies will have a lot of data to sort through as they are required by law to release it. Of course, with a large company comes a lot of complexity as well. Smaller privately held companies will not have to release information however there are still numerous ways to retrieve intelligence (which is the topic of another article.)
If you will be starting a new business, or launching a new division of a larger company, it would be foolish to not do research on the competition. You need to know how much market share they hold, how long they have had it, are they profitable, etc. Answers to these types of questions will help you know where to enter the market and how to target the competition’s customers.
The importance of competitive intelligence is quite clear. It must be added to your marketing plan. If you know what your competition is doing, then you can figure out why they are doing it. At that point, you never know how that can transform your own thinking. Rest assured that your competition is trying to find out what you are doing.