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Modern business markets are incredibly competitive. No matter how innovative you think you may be, there are always dozens of other organisations fighting for control of the same audience or consumer base. The key to staying ahead of your competition is to understand them: all their strengths and weaknesses.
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it all the time, in business magazines and journals, but what is Competitive Intelligence and what does
it mean for us? Competitive intelligence can be described as the action of
defining gathering, analysing and sharing market intelligence regarding
customers, products, competitors and markets. It also encompasses the needs and
required support for managers and leadership in terms of the strategic decision-making
surrounding the implementation of information gathered.
Gathering and using competitive intelligence has become a core factor in the success of organisations in heavily crowded markets. Understanding and having a deep knowledge of the markets of which they are situated provides a substantial advantage over those that do not. It allows organisations to remain innovative and drive their strategies to remain one step ahead of competitors.
There are five simple steps to developing effective competitive intelligence:
- Identify all of your current and potential competitors.
- Place emphasis on those that you would consider your ‘key’ competitors (those that are similar to you in products, scope and brand).
- Also note successful competitors that are larger in terms of market share, as well as new smaller competitors that have the potential to disrupt the market.
- What are the key characteristics of these organisations?
- Depending on what you are assessing, you may focus on a single characteristic; but in general, the more intelligence you have, the more meaningful the conclusions will be.
- Look for characteristics such as: size (from employee base, to market share), profitability, market targets, strategies, growth rates and organisational objectives.
- Whilst there are many competitive aspects to explore, consider those that are most important to your position. For example, a local computer hardware shop wouldn’t gain much insight from comparing their market share to Apple, but they might gain a lot of insight if they consider Apple’s market targets.
- Find each competitor’s strengths and weaknesses – what they innovate, and where they lack in inspiration – as this will allow you to pinpoint their vulnerabilities, as well as their capabilities.
- Focus on areas such as their human resources, production capabilities and level of research involvement, areas which you can easily focus your efforts.
- Consider what makes your competitor so capable, and analyse where you are similar as well as where you differ.
- This is a good opportunity to imitate (and build upon) policies, approaches and objectives that are successful as well as to consider ways in which to make them more effective.
- Consider yours and your competitors’ strategies under differing circumstances
- Consider their responses to your own marketing as well as their intelligence on you
Now that you have collated this data you should compare it against your own organisation and use it to identify areas in which you can improve, as well as areas in which you are excelling. There are numerous aspects to consider in this process; but if you get it right, you will see your organisation grow and surpass your competitors. Remember – the goal is not to merely imitate your competitors, but it is to use the information you have garnered from your assessments of them to spread into niches that they have missed, and to build upon systems that they have successfully designed and implemented.
Competitive intelligence is no different to any other form of research intelligence – the only difference is the groups you are researching are direct rivals, who themselves are constantly evolving and adapting to new market stimuli and innovations. The gathering and use of this intelligence is a continual process, and in order to maintain your market share as well as grow, you must continually assess the market and those companies that your organisation shares it with. Competition is healthy for the economy, but it’s always best for the organisation that’s on top – after all, the aim of competitive intelligence is to aid your organisation in becoming the top dog. But it doesn’t stop once you get to the top table. To stay ahead you have to keep accelerating, staying ahead of the market – other competitors will never stop chasing you so you need to remain innovative and fresh, whilst retaining aspects of your organisation that made you successful in the first place.