Organizing Competitive Intelligence
The development of strategies to compete is essential for the future survival of every organization. Competition is increasing from everywhere, ranging from small startups to global companies leveraging resources in the shared economy. Understanding this external global environment is now part of how you must strategize. Competitive Intelligence (CI) is the process by which you collect and analyze information to better understand the external environment. The product of Competitive Intelligence is knowledge that facilitates decision making, both strategic and operational. Therefore, CI is both a process and a product.
Finding sources for competitive intelligence is not a problem. However, sources can vary widely. Some examples include press releases from the competition, trade journals, customers, suppliers, employees, banks, investors, government reports, market surveys, etc. In some cases, these sources are walking down the hallway everyday; namely your employees. Many of your employees most likely once worked for your competition. Yet, no-one has spent one-minute collecting intelligence from these sources. The real challenge is organizing and making competitive intelligence a core competency within the organization.
One good place to start is to do a competitive intelligence audit; i.e. take an inventory of what you already have. Pull together all of the pockets of information scattered throughout your organization. Over half of all competitive intelligence information is accessible through your own organization (such as employees you once worked for your competition). Once you have completed the CI Audit, define your competitive intelligence objectives and outline a plan that will make competitive intelligence a major decision support service within the organization.
Some critical questions that should be asked are the following:
- How much information do we already have?
- What additional information do we need?
- How will we use this information?
- How will we transform this data into intelligence? What formats will we use?
- How much time and effort is required for CI?
Also try to place emphasis on the following:
- Design competitive intelligence so that it anticipates future events, such as changes to the competition through mergers.
- Competitive intelligence should tell you what areas to avoid as well as possible opportunities.
- Competitive intelligence will fill gaps or areas that otherwise would go unnoticed by the organization.
- Make sure competitive intelligence is a continuous process since the competitive landscape is always changing.
One of the main outputs of competitive intelligence is identification of the competition. A customer driven approach is a good starting place for identifying your competition. Identify those companies that compete against your company at the product or service level. What other companies offer similar products and services? Once you have identified the competing companies, you need to isolate the differences between your company and the competition. Since an analysis of differences can be difficult, focus your attention on strategic differences. For example, many of these differences will relate to competitive advantages and disadvantages. What areas are we better and worse at in relation to our competition? Try to pick up on trends and patterns that are going forward. For example, what are the relationships between your company and the competition regarding price, cost, distribution, quality, innovative products, etc. If price represents a basis for competition, then your CI effort needs to identify the cost structure going forward. If quality is important to competing, then CI will need to obtain information about customer satisfaction. Keep in mind that your competition is seeking to match or exceed your competitive advantages. Therefore, protecting your competitive advantages is one of the key benefits behind competitive intelligence.
Organizing a competitive intelligence effort is paramount to protecting your values within the marketplace. Competitive intelligence will allow you to manage and react very quickly to changes in the external environment. Competitive intelligence will not only help you identify and monitor the competition, but you can expand competitive intelligence to monitor issues that profoundly impact your organization (such as deregulation, technology, social changes, etc.). Finally, the process of competitive intelligence will require substantial support from senior management since it must become an integral function within the organization. Without some form of competitive intelligence in place, strategic decision-making will run the risk of being too inward thinking. In today's global, competitive marketplace, you must give consideration to the external environment. Competitive intelligence will make you see things externally.
Written by: Matt H. Evans, CPA, CMA, CFM | Email: email@example.com | Phone: 1-877-807-8756
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