How to use competitive intelligence to beat the competition
Updated: Feb 12, 2021
With the enormous amount of data generated by the business processes and the rapidly increasing volumes of information flowing within and between companies, the question is not how to acquire useful data but how to utilize it to gain insightful information that would lend enterprises a competitive edge.
With businesses under constant pressure to meet rising consumer expectations, increase efficiency, and profitability, dealing with intense competition is challenging. Analytics can play a transformational role in helping businesses ace their game and gain a competitive advantage. It can provide real-time insights into multidisciplinary business functions for better judgment and decision making.
John Pepper, Chairman at Procter & Gamble (1995 -2002), in his keynote address to the 1999 SCIP CEO Roundtable at Montreal in April 1999 said:
I can’t imagine a time in history when the competencies, the skills, and the knowledge of the men and women in competitive intelligence …. are more needed and more relevant to a company being able to design a winning strategy and act on it.
Advantages of Competitive Intelligence
1. Finding new opportunities: CI helps identify any new areas of opportunity that arise in the market and to take advantage while it’s still available.
2. Adopting best practices: If you find your competition making new changes or employing new techniques, there is no harm in applying those to your business as long as it is advantageous and well-suited to your system.
3. Learn from experience: Learn from the triumphs and failures alike. These experiences of your competition are invaluable lessons you can utilize to your advantage.
4. Action and reaction: CI can help you determine the appropriate time for business actions and react quickly to your competitor’s actions.
5. Ace the game: Always staying ahead of the game is a sure-shot way of gaining market share and ensuring the competition does not overtake you. CI is a valuable mechanism that can help in attaining this objective.
6. Innovation is vital: Innovation sets the business charging ahead of the competition and help sustain a competitive advantage. CI collects the trends and patterns appearing in the industry, thereby providing reliable data for innovations.
Also Read: The Art of Emotional Branding and understanding customer emotions
Once you have adopted the competitive intelligence (CI) process, identified your competitors, recognized your areas of interest, and gathered intel, the obvious question is how to use it competently? Turning this data into results that can benefit your business strategy is challenging and not always rewarding. Businesses should prepare for the possibility that the CI process might not prove as fruitful as they initially expected it to be, or may only help marginally, which apparently won’t justify the money, time and effort invested in the process.
Let’s explore ways to make competitive data actionable.
How to make competitive data actionable
The business demands and requirements should dictate the use of competitive data. It cannot be a process that you blindly copy from a competitor, the fact being their challenges could be very different from yours. This data should help you fix a problem or cater to a business need. Set a well-defined business objective even before attempting the CI process and focus on major points that would help achieve this objective.
2. Business alignment
It is imperative to translate the business context into analytical problems. Execute problem definition and solution design with the focus on business rather than the analytical point of view.
Identify the key stakeholders that would benefit from the data acquired. Involving people who actually would work with this data help identify their requirements and incorporate it from the start instead of going back and forth every time they need something different. Reiterations and revisions are highly likely even after careful consideration of every request put forth, but it’s possible to minimize it. Moreover, a marketer or a promoter thinks differently to a data analyst, its a fact.
Competitive analysis is created by breaking down the data and extracting vital information that can help answer the focal points identified at the beginning of the process. There are different tools, basic and advanced, for any level of the process. Companies like Amazon and Google use deep learning artificial intelligence. Data collection, modeling, and application of the knowledge gathered are all layers of the process and needs to be tightly integrated. Impartial focus on each segment of the process is necessary to derive significant advantage from the analytics investments.
The intel should be communicated to and comprehended by the stakeholders. It is not an easy process as information passed on different channels of communication often gets lost, misinterpreted, or misused. Hence, it is necessary to establish a safe and secure communication channel for efficient transmission of data. For instance, MS Outlook can be used effectively for the purpose, that can limit access to such sensitive information within the organization.
The findings of the analytical process will help turn your competitor’s data into actionable results. For instance, you can develop a competitive pricing policy or a better sales pitch with your competitor’s profile and understanding of their triumphs and failures. You can learn from their mistakes and utilize their experiences for your advancement.
Competitive intelligence is a double-edged sword. The flow of information within and outside your business could lead to possible misinterpretation and misuse. Especially in organizations that decide to outsource these activities to those with core expertise, it is a gamble they have to take.
Also Read: How data-driven decision making is driving businesses towards success
Application of CI
Assess the strengths and weaknesses of your company, and that of your competitors, to help leverage data in a significant way and prepare for extensive opportunities and strategize for future challenges. SWOT analysis of your business framework helps incorporate the intelligence gathered through the CI process,
● Strengths – CI helps identify your positive attributes and competitive advantage and the uniqueness that your business brings into the industry. It is true for your competition as well.
● Weaknesses – Identify your problem areas. Ideally, you would have already made this a part of your objective for the CI process. Explore solutions in your competitive landscape, which might already be tried and tested and save you time and money.
● Opportunities – CI helps you keep a tab on the pulse of the industry. It helps identify changing trends and market conditions to take advantage of.
● Threats – Preparedness is half the battle won. Just as opportunities are a fact of life, so are threats, and in business, it is no different. CI prepares you for any such event by keenly monitoring the competitive landscape.
The business ecosystem is customer-centric. Competitive intelligence can provide deep insights into the customer acquisition, retention, and support management system of your competitors and help you craft dynamic and successful strategies to compete effectively and secure your market position. CI can also help businesses leverage data to create an outstanding and truly personalized customer experience.
Like every business decision, evaluate the competitive intelligence process to measure its practicality and profitability. It is imperative to establish the success rate of the CI process in achieving its designed goals. CI should not be a shot in the dark.
● Accuracy – Ensure the authenticity and usability of the information and that it conforms to the industry trends and practices.
● Measurability – a definite, quantifiable measure should be applied to rate success on CI currently executed.
● Applicability – Assess CI applicability in varied business functions. It should be easy to apply in different business functions with consistent efficiency and output.
● Profitability – Calculate expense and income in terms of time, money, and effort spent on the process. The longevity of the program is an essential factor as CI is not a short term project. To gain valuable insight, implement CI for an optimum period company deems suitable, and then evaluate for its profitability.
A point to remember is that CI could use internal as well as external sources of information but should not depend on unethical means to obtain them. CI uses publically available data, and businesses should draw a definite line between competitive intelligence and corporate espionage. Employment of AI and machine learning in data processing and analytics raise the chances of success in applying competitive information, which in turn may lead to more enterprises using data as a strategic source of competitive advantage. It is a vital journey for businesses to endure the new surge of competition that is evolving.
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