What is Competitive Intelligence? And “What’s in it for me?”
Competitive Intelligence (CI) is the brains behind decision-making. It’s simple. The better the information, the better the decision.
Need more? When introducing a new concept in business, such as CI, the question that invariably arises is “What can I/my company/my clients gain from this?”
As a professional in the industry, it is easy to create a treatise that expounds on the many benefits to every executive and every company, and there are many white papers that do just that. But, let’s get to the bottom line, with a rational list that makes the most sense and offers the most persuasive argument.
First, CI improves decisions. The primary value of competitive intelligence is that it results in better decisions by minimizing risk. This applies both to big decisions, such as entering a new industry or expanding a product line, and smaller decisions alike, such as buying a piece of equipment, or targeting a different customer group. Large companies have a financial cushion against making mistakes; smaller companies don’t and certainly not today. In these economic times, no company can afford the effects of a poor decision. It is essential to get it right the first time.
Second, CI helps identify new opportunities before the competition does. One of the goals of CI is to help identify where the market, industry, and customers are headed, and to do so before the competition catches on. In short, CI’s objective is to get the information you need in order to grow your company. It will uncover how and where the market for your product or service is changing; what identifiable shifts exist in customer needs or desires (features, packaging, distribution channels) and how to capitalize on those. It can address what technologies can or will affect your industry or your customers, and identify what buyers (reps, distributors, or retailers) are seeking. It puts you ahead of the curve, and enables a company to move from a crisis-driven or reactionary state to an opportunity-driven one.
Third, CI provides an accurate and objective view of the marketplace - today. If you agree that there are many changes occurring in business, you must be up-to-date on those in your industry, as well as the outside forces that impact your ability to be successful. Current, objective, and relevant information balances or overcomes the human factor of overconfidence, self-interest, risk aversion, and inability to see the big picture or the near future. Whether or not you conduct competitive intelligence, you will eventually learn the reality of the marketplace. With CI, you learn it sooner, sometimes much sooner, and that delivers a significant competitive advantage.
Fourth, CI answers management’s questions. When an organization conducts competitive intelligence on a subject of importance in developing a sound strategy, there are always multiple bonuses. Because CI is the systematic process of collecting, analyzing, and presenting objective information, it serves to answer management’s questions – even those that might not have been considered prior to the study. As such, it effectively helps management learn new important information they didn’t even know - including unknown customers, market drivers, barriers to entry, substitute competitors, and discontinuities.
Finally, CI helps your company be proactive and decision-ready to respond more effectively to events and opportunities. “Timing is everything,” and this applies even more when making strategic business decisions – especially in economically challenging times. In a recession, all businesses are affected, and a company has to move more cautiously because the customer base, consumer, industrial, or non-profit is spending differently. Companies have to think much more carefully and strategically about what it is doing, and whether it should be hunkering down or being more aggressive in select areas. How do you decide? With a small investment in CI, a company can get many answers and a direction for action.
While a company cannot anticipate the unknown, Competitive Intelligence can provide insight and perspective that enables you to respond to changes, respond to them sooner, and make better decisions.
Seena Sharp of Sharp Market Intelligence is my long-time colleague who identifies your competitive edge by uncovering opportunities, threats and growth segments. Visit Seena at www.sharpmarket.com and download the free chapter in Seena Sharp’s new book, Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World (Wiley) http://bit.ly/8XLKmj. And read the great Amazon reviews http://bit.ly/5FCHtL
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