A paradox is currently surfacing on the business landscape: Companies that have abundant resources are still falling short of success in today’s competitive world. In such scenarios, one can only question what exactly is going “wrong.”  Companies with appropriate and abundant resources, plus smart management, usually make their mark. With the exceeding number of competitors in the market, it is not shocking to see large companies liquidate early in their business life cycle. In order to survive in the current competitive world, it is crucial to profile the competition so that you know what they are doing, why they are doing it, how they are doing it, and when they are doing it. Companies today spend a great deal of time and resources on Competitive Intelligence.

Competitive Intelligence is the process of regularly monitoring your competition, within a specific market place, to ensure that they do not steal your market share. It consists of having the knowledge of what they plan to do, along with the strategies they will employ, even before they bring them to light. It involves careful planning in the selection of the business strategies that they will use to counteract the competition. A great deal of research is devoted to gathering adequate data that recognizes market trends, and then, integrates that knowledge with the company’s information database to formulate business decisions that would insure an increase in the company’s market share.

Benefits of Competitive Intelligence:

Competitive Intelligence has a strong strategic importance as it transforms competitor information into relevant strategic knowledge about a competitor’s performance. When one has the “know-how” of the capabilities and intentions of one’s competitors, it becomes easier to position one’s strategies accordingly. The fundamental advantages of using Competitive Intelligence are that it helps detect competitive threats, eliminates unexpected actions from competitors, helps uncover new opportunities, and enhances competitive advantage by recognizing the shortcomings of one’s competitors.

Who should use Competitive Intelligence?

Never before in history has competition been so tough. The market presents abundant opportunities along with unwanted threats. Faced with this challenge, business owners—regardless of the nature of the business—are engaging in the practice of Competitive Intelligence; and it is, therefore, gaining enormous importance.  After all, your profits depend on several varied aspects—the differentiation of your products, the marketing strategies your company applies, the pricing policies you incorporate, and the level of technology you use, etc. Consequently, you would only be able to succeed in these areas if you knew about the market, your competitors’ offerings, and the strategies they employed. True pleasure exists when you recognize that you are excelling in the industry because you know and understand your competitors, and because you have risen above the competing firms.

Incorporating Competitive Intelligence:

Competitive Intelligence is not about stalking competitors… It is about researching your competitors in an ethical way.  It is keeping a close eye on what your competitors are up to so that you have information that helps accomplish strategic planning that will enhance profitability. One of the major mistakes that entrepreneurs make is to underestimate the number of competitors they actually have. It is very important to take note of the existing, as well as potential competitors, and then, conduct extensive research before developing your master marketing plan.

Tools and Techniques of Competitive Intelligence:

One of the most successful, basic strategies of competition is the way a company markets itself. Knowing the marketing strategies of your competitors is essential in developing your own marketing strategies. How exactly do you do that? Start with the basics… Check the latest advertising campaigns and request their brochures or other marketing material; pay attention to their pricing strategies and any sales or discounts they are offering; pay a visit, as a mystery shopper, to see how they deal with their clients; and, check their online sites to know how much traffic they are driving to their site. Another way of conducting Competitive Intelligence—that is gaining a lot of interest—is through search engines. Major search engines can provide in-depth market knowledge about your competitors. Hiring Competitive Intelligence Consultants, who employ a variety of CI software, is also a viable option. If your competitors are publicly traded, you might also want to check them out on the SEC (Security Exchange Commission) to get detailed financial information.

Mistakes to Avoid:

Although Competitive Intelligence provides companies with vast advantages, it can present setbacks. In order to avoid timely setbacks, conduct your intelligence by keeping the following points in mind.  The first point has to do with the importance of gathering accurate and complete information. It is very common for companies to draw conclusions based on information that is simply incorrect or insufficient. This practice leads to misleading and incompetent conclusions and/or results. Another mistake that must be avoided is under staffing, CI demands extensive research. One research person may or may not be sufficient—the extent of the research depends on the size of the market and the number of competitors. Similarly, lacking adequate infrastructure that supports the gathered information can create problems. Information must reach its desired destination for it to become valuable, or it ends up as stale information.

Collecting data with clearly marked objectives—knowing what information to gather and for what purpose–is critical in the success of Competitive Intelligence because it saves time and resources. On the whole, Competitive Intelligence, if conducted professionally—while avoiding mistakes—creates a strong impact on tactical decision-making, and therefore, on improving Return on Investment.