Make Sure You Watch Your Competitors. Strategy, Tactics & Innovation Are All On The Line.

Executives see business as a blood sport where the best products and services “win” or “lose.” But the marketplace is not the only place where product and service wars are won. Sometimes they’re won by just watching and studying what their competitors are doing. Sometimes strategies, tactics and innovation are the by-products.

Here are five questions:

1. Can you name all of your competitors?

2. Do you know what your competitors are doing?

3. Do you know what your competitors are planning?

4. Do you know who the “new entrants” are?

5. Does “competitive intelligence” influence your strategy and tactics?

If you answer “no” to any of these questions, you’re missing huge tactical and strategic opportunities. Worse, you are absolutely risking your market position.

Competitive Intelligence (CI)

Bloomenthal (2021) defines it this way:

“Competitive intelligence, sometimes referred to as corporate intelligence, refers to the ability to gather, analyze, and use information collected on competitors, customers, and other market factors that contribute to a business’s competitive advantage. Competitive intelligence is important because it helps businesses understand their competitive environment and the opportunities and challenges it presents. Businesses analyze the information to create effective and efficient business practices.”

He also recognizes two “silos” of competitive intelligence:

“Competitive intelligence activities can be grouped into two main silos: tactical and strategic. Tactical intelligence is shorter-term and seeks to provide input into issues such as capturing market share or increasing revenues. Strategic intelligence focuses on longer-term issues, such as key risks and opportunities facing the enterprise.”

CI consists of five steps:

1. Identify the intelligence targets

2. Collect data & information

3. Process the data & information

4. Analyze & produce intelligence

5. Disseminate the intelligence

Technologies & Platforms

Since intelligence is anchored in data, all of the current and emerging data analysis tools, technologies and platforms are necessary for analysis and production. But, as always, it all begins with targeting. Companies should rank-order their tactical and strategic targets. In an era of disruption, companies should pay special attention to new entrants, or competitive products and services that leave their swim lanes. For example, some companies add services to their products even though their brand is product-based. Some companies add new services over time, like Amazon and all of the cloud computing providers. When Amazon started, it focused on books. Now it hosts a pharmacy. Airbnb, Uber and Lyft came out of nowhere – at least from the perspective of the hospitality industry.

Other technologies are especially important, such as artificial intelligence, machine learning (especially natural language processing), generative AI, social media analytics, explanatory, descriptive, predictive and prescriptive analytics, and data science, among other existing and emerging technologies that focus on the collection, analysis, production and dissemination of intelligence.

Note also that there are lots of tools and platforms that help support the competitive intelligence process. “Platforms” embed methods, tools, techniques and technologies into applications that companies can use to conduct the intelligence process. Some of these platforms are designed around function – like marketing intelligence – some around data – like social media intelligence – and some around specific vertical industries – like healthcare. These platforms collect and analyze data, and then generate “dashboards” that present intelligence work products that can be disseminated with a key stroke. Companies should avail themselves of these methods, tools, techniques, technologies and platforms where it all comes together.

Competitive Intelligence Officers

CI is a profession with methods, tools, techniques, technologies, certifications, associations, publications, conferences, podcasts. If competitive intelligence is a profession with all of the trappings of a discipline, companies need credentialed professionals to pursue competitive intelligence. If you’re thinking about formalizing an “Office of Competitive Intelligence,” you will need professionals with specific skills and competencies. You need professionals who know how to collect and “clean” data, you need data “architects,” business intelligence analysts, machine learning experts, algorithm matchers, natural language processing experts, and those who know how to find, learn and exploit cloud-based platforms.

CI, Corporate Strategy, Tactics – & Innovation

CI is purposeful. Yes, companies need to snoop around their known and future competitors for its own sake, but the real value of competitive intelligence is the role it plays in corporate strategy, business models and processes. The more companies know about their current and future competitors, the more informed their strategies, business models and business processes.

Competitive intelligence has two faces. Tactical intelligence should impact the immediate go-to-market processes and strategic intelligence should shape products and services to be offered over the next 2-3 years. Some competitive intelligence, especially that discovered from venture capitalists and start-ups, might push strategic planning out 3-5 years.

Final Thoughts

Competitive intelligence is often an ad hoc activity. Sometimes it’s even anecdotal. C-Suites should strongly consider formalizing the competitive intelligence function with a well-funded, full-time, dedicated team which should be invited onto whatever strategic planning processes exist at their companies. It’s especially important to focus on competitors leaving their lanes and ones that might come from left field.

You must make competitive intelligence sourcing decisions. Will the work be conducted in-house or outsourced to a trusted, experienced partner? Will some of the work be co-sourced? This decision is important because it defines where companies draw the brains-versus-brawn line. If a company decides to insource the intelligence process they’re tilting toward brains, but if they decide to outside the process they’re voting for brawn. C-Suites should think long and hard about sourcing decisions because once the brains leave the building it’s hard to get them back.

Competitor intelligence should also stimulate innovation. The more companies learn about what their competitors are doing the smarter they will become about themselves and how they should improve, replace, reinvent and automate their own processes and perhaps their entire business model. This is another benefit of competitor intelligence.

References

Bloomenthal, A. (2021). “Competitive Intelligence: Definition, Types, and Uses.” Invest-opedia.

The Gartner Group. (2022). “Competitive and Market Intelligence Tools for Technology and Service Providers Reviews and Ratings.” The Gartner Group.