- INDEC
Competitive Intelligence | Process, Benefits & Tools
Competitive Intelligence plays an immense role in connection with benchmarking, competitor monitoring and competitive analysis. But what exactly is Competitive Intelligence and how can this know-how be improved and built up in one's own organization? In this article, we would like to address this topic and explain what's behind Competitive Intelligence.
Definition
First, let's look at the exact definition: The first part of the term, "competitive" is used to describe situations or activities in which people or firms are as good or better than others of a comparable nature. "Intelligence" is a collective term for technologies that enable data preparation, data mining, data management and data visualization. This collected "knowledge" leads to concrete possibilities for action within an organization.
Competitive intelligence is further described as the systematic process of planning, collecting, analyzing and communicating correct and specific competition-relevant data in an ethically correct way about the economic environment, about competitors and about one's own organization. Thus, there is also a clear distinction from illegal industrial espionage.
Why is Competitive Intelligence important?
In today's fast-moving world, companies are changing at a rapid pace and many markets are subject to strong competition. The observation of innovations, market developments and the growing know-how in one's own business segment is therefore enormously important.
Strategic monitoring of markets and competitors is a powerful tool for driving innovation and having the right information at hand at the right time.
With the help of Competitive Intelligence, the development of a market, its market participants and new state-of-the-art technologies can be strategically monitored and help to make the right decisions and reflect one's own role in terms of strengths and weaknesses.
Benefits of CI
Competitive profiling
Technology assessment
Review of own market positioning
Scanning of the economic environment such as competitors, technologies, subsidies, market entry barriers, etc.
Opportunity and risk assessment for new products, services and markets
Recognizing important trends and anticipating them
The 5 phases of the Competitive Intelligence Cycle
With the help of the CI Cycle and its 5 phases - Planning, Research, Analysis, Communication and Decision & Feedback - a successful CI process can be initiated in an organization.
1. Planing Phase
As with any strategic process, the CI-Cycle also begins with the planning phase: In this phase, the central question of which aspects of the competitive analysis are to be considered must be clarified. The so-called Key Intelligence Topics (KITs) must therefore first be defined.
Key Intelligence Topics (KITs) are the central topics of the business environment that are essential for an organization to achieve its defined business objectives.
The most common KIT categories are:
Early warning KITs: What are the opportunities & risks?
Strategic KITs: Data and information related to specific, defined business strategies
Competitor KITs: Information about the most important competitors
2. Research Phase
This is followed by an inventory of the knowledge on the defined KITs: If the knowledge is already available in the organization, the relevant questions can be concluded quickly. Otherwise, knowledge generation begins.
Knowledge generation includes competitor monitoring and the collection of internal and external information. Sources of information can be, for example, the following ones:
Content, Social Media & Campaigns
Regularity of content
Content & topics
SEO & keywords
Quality or quantity?
Which marketing channels are being used?
What do the CTAs (Call-to-action) look like?
Who is the target group?
News & Promotion
Press releases
Trade show appearances
Mentioning in news
Sponsoring
Awards
Trends / time of communication
Customer Testimonials
Customer reviews
Customer circle
Customer lists
Marketing-Mix
Product and pricing policy
Price changes
Product positioning and product presentation
Product / portfolio adjustments
Employees & Job Postings
Open positions
Job profiles
Reports & Studies
Market analyses
Annual reports
Service analyses
Joint customer surveys
Product breakdowns
In addition to the initial collection of data, it makes sense to continuously monitor the competition in order not to be surprised by competitor or new market conditions. However, continuous observation of the environment also means a constantly growing amount of data and an ever-increasing knowledge archive.
3. Analysis Phase
Since the collected data comes from different sources, it is initially unstructured and available in different formats and forms. At the same time, not every piece of information collected is useful or relevant to the company. It is therefore crucial to implement a system to bring the abundance of collected data into an evaluable structure and to be able to distinguish relevant from irrelevant data. The following questions can support the initial selection:
Data reliability: How reliable is the information source? Is the content clear and unambiguous? Can the accuracy of the information be confirmed?
Data timeliness: How up-to-date is the information and how up-to-date does the information have to be in order to be usable?
Meaningfulness: How meaningful is the information? How often and where is a certain piece of information found?
Relevance: Is the information relevant to a specific business objective?
Furthermore, data should always be understood as part of a larger context. Looking at individual pieces of information is usually not helpful. Rather, the entire market context must be considered, even if the focus of CI is on competition. This includes e.g. new market entrants, generally decreasing customer loyalty, new regulations and laws, higher price sensitivity, etc.
The heart of Competitive Intelligence is, besides complete, up-to-date, relevant and correct raw data, to draw the right correlations and conclusions from the available information. Depending on the defined question, the following analysis methods can be performed:
Strengths / weaknesses or SWOT analysis
Benchmarking
Location / market potential / market coverage analysis
Market positioning analysis
Segmentation / portfolio / price analysis
Technology / process / cost analysis
Profit / loss analyses
Search engine & marketing analyses
Analysis of industry trends and market development
The results of the analyses are intended to support companies in securing and expanding their own competitive advantage. At the same time, Competitive Intelligence helps to prevent or anticipate competitors' activities.
4. Communication Phase
After the analysis phase has been completed, the results must be communicated within the company. It is important that the information is provided by the CI team in the "right" form, in the "right" hands, at the "right" time and via the "right" medium so that binding actions and concrete measures can be derived and formulated from the findings of the analyses.
Ideally, Competitive Intelligence is already embedded as an integral part of the corporate strategy and culture, so that the insights are given the necessary position in the organization. The commitment of top management and the relevant departments is essential in order to implement and drive changes in the organization. Of course, the affected employees should also be brought on board at an early stage. They must understand the necessity of the changes and accept the upheaval in order to be able to support it in a targeted manner.
A fixed process and regular meetings with those responsible can be helpful. In addition, a special database or software should be used in which the relevant data and analysis results can be recorded and made available to the most important stakeholders. In this way, the acquired knowledge can be stored, retrieved at any time and the knowledge archive can be continuously expanded.
5. Decision and Feedback Phase
In today's world, big data is an important asset for any organization. With the help of CI, organizations can obtain a data-based decision-making aid, which must be transferred into future corporate planning and strategy.
Plans for changes can be documented, for example, with a rough action plan, which is then concretized and developed by the responsible project teams. If changes are actually implemented, it is advisable to prepare a further report showing the benefits of the revision compared to the performance before the change and compared to the expectations. The findings can be mirrored back to the CI team to optimize the CI process as well.
Finally, there is a reassessment of the Key Intelligence Topics (KITs). Have there been any changes at this point? Are there new aspects that are relevant to the business success of the organization? By answering this question, the CI-Cycle starts all over again.
You would like to learn more about Competitive Intelligence? We support you together with our special software and database GOBENCH in building your knowledge archive and analyzing your competitive data.
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