Competitive Intelligence – A Perspective on Facts turned into Competitive Advantage
To understand what competitive intelligence is, it is useful to consider an example from the world of sports and gambling. If you are interested in horse racing and you also want to place bets on the horses competing, you can benefit from the use of competitive intelligence. Some of the following six points are relevant to horse racing, while all of them are relevant to practitioners of competitive intelligence.
1. The objective: turn information into intelligence to support decision-making
The starting point in horse races is that everyone has access to the same basic information. For instance, information about how the horses participating in the race have succeeded in their recent races and during their career, what their record times are, how much money they have earned this year and who is their driver in the race. All the gamblers also face the same challenges: they know that for each euro gambled in the races, the average return is less than that. This is because the organizers take their share from the bets placed, as does the state in the form of taxes.
Attending the races, you could decide to place a large bet on one of the contestants. Perhaps this was the one horse you had heard about before, or perhaps you just picked up one at random to bring excitement to your day at the races. Any possible winnings would then be a lot down to pure luck.
However, placing a large bet on a horse you know nothing about, against horses you know no more about, in conditions (track, distance, weather, etc.) the impact of which you don’t understand is risky. Would you bet 10K on a horse in these circumstances? It would be like a company putting a lion’s share of its R&D budget on a product, without knowing anything about the products of its competitors, without understanding whether there even is demand for the product in the market. On that note, for a discussion on product and demand, Tom Ewer’s blog is very helpful. In the blog, Ewer goes through the various ways to assess the strength of a business idea when thinking of launching a product online.
Let’s stay on the race track a while longer. How could gamblers benefit from the use of competitive intelligence i their situation? Unless they are prepared to accept losses as part of a hobby, they must start turning the available information into intelligence that will benefit them in their decision-making. If they prepare by spending 45 minutes to analyze an individual race, they are already in a better position than their fellow gamblers, or competitors.
2. “How to”: collect information, analyze it, apply into action
By analyzing the race in more detail, gamblers will learn about the competition that the horses have faced earlier: perhaps a horse that has recently fared well is now facing a much tougher competition. Perhaps another horse, not successful in her previous races, can be expected to be a strong contender in the current long-distance race. Gamblers can analyze the impact of the horse’s starting position on how the race is likely to develop. Even then, they might have to admit that some other gamblers have access to more privileged information: these gamblers could be talking to horse owners to find out about the preparations and the horse’s condition of the day.
Of course, spending that 45 minutes on analyzing the race beforehand has an opportunity cost attached to it: the time that could instead have been spent on other activities. So, the gamblers really need to believe in the good that collecting information, analyzing it to turn it into intelligence and applying that intelligence in their decision-making brings to them. Applying competitive intelligence to one’s benefit requires perseverance and a systematic way of working.
3. Competitive intelligence – getting ROI in the business world
A lot of these same principles apply in the business world. The major challenge often is the extensive amount of information available, hence the need for competitive intelligence process and experts. The sources for finding competitive intelligence are diverse: there are different market and macro-economic reports, competitor’s webpages and social media activity, industry analyses, customer data and product information, to mention a few. This Reference for Business blog discusses competitive intelligence – what CI does, what are its sources, how to manage it, what techniques to apply and how to make use of CI.
The starting point when gathering competitive intelligence is to look at the external environment – the world outside an organization’s home territory. The goal is to get ahead of the competition, and to stay there. The key steps in the competitive intelligence process are:
- Know your intelligence objectives. For instance, do you want to support the decision-making of your sales team, your marketing or product management? Who are the competitors you should know more about?
- Start collecting data about the industry, markets, products, customers and competitors
- Analyze and interpret the data to turn it into intelligence
- Share the intelligence inside your organization. Get rid of unnecessary silos.
- Planning, collecting, analyzing and sharing must lead to ACTION!
Collecting information should be done in a systematic way. Businesses must embrace learning and use a wide lens to study the markets, competitors, and the industry. Over time, they must also learn to focus on the intelligence that best supports their intelligence objectives.
4. Go deeper to understand your competitive intelligence environment
The truth is that you cannot afford not to know what your competitors are up to, what are the latest trends in your industry, what kind of product information your potential customers are searching for or where the market is heading. Luckily, with the competitive intelligence process properly established, you will:
- Learn about various risks, threats and opportunities before your competition does
- Develop a fact-based perspective on events and trends happening in the markets, industries and technologies
- Benchmark yourself to other organizations to better understand your strengths and weaknesses
- Get yourself an instrument for strategic decision-making
- Make all this a process with defined areas of responsibility inside the organization
Now, your strategy is beginning to take shape.
Picture: Flickr / Raed Yahya Al Banna
5. Consider a software tool to alleviate your work
To be able to perform consistently at a high level, you will need a tool to help you succeed in your competitive intelligence actions. There are several software solutions available in the market to help you make informed decisions. Software tools populated with the right kind of information help you understand emerging trends in the market and the industry, how your competitors want to position themselves, what kind of legal or financial issues they are facing, what are their latest product additions, how are people talking about the company and what is their organizational culture like?
What will a good competitive intelligence software tool do for you? It will:
- Save your time by collecting the relevant internal and external information into one central place
- Allow you to skip mundane monitoring tasks and concentrate on higher value-adding activities (see opportunity cost earlier in this post)
- Help you organize your work by gathering different reports, analyses and social media feeds in their logical locations
- Engage your team by allowing you to distribute insights to your team and comment news items. Your colleagues will become your tip-giving experts, sharing their intelligence
6. Intelligence Plaza 10 as solution – technology + humans + content
Now, let’s re-visit the horse races: taking into the account the various factors that may impact how individual races will turn out is a learning process. To become an expert, you are likely to need some help. Wouldn’t it be great if you were able to base your betting decisions on expert advice, based on thorough analysis of the race? Luckily, there is a market for experts and they are actively giving tips, or sharing their intelligence.
At M-Brain, we have recently re-launched our flagship competitive and market intelligence product as Intelligence Plaza 10. The product comes with a significantly improved modern user interface for seamless consumption of content via desktop or any mobile device.
As we always like to emphasize at M-Brain, an intelligence platform is only as good as the content it contains. For content, you need experts. More than 80 % of our customers choose our full Intelligence Plaza solution. This means that they receive not only the technology, but also get to enjoy from our curated content and analyst services. Our human analysts produce insight content, create market, industry and strategic analyses and manage the platform’s dashboards.
This is the privileged information that in our early analogy, the best performing gamblers have access to. We will be the experts who will, so to speak, analyze the track and the competing horses for you. Our consultative approach makes sure that the intelligence becomes actionable and is applied to the benefit of your decision-making. The end result: you will be able to outperform your competitors by mastering the process of collecting, interpreting and distributing competitive intelligence to your benefit.
Curious to find more about our Intelligence Plaza 10 solution? Contact us!
This blog was updated on 11.11.2020