The need for Competitive Intelligence
Competitive intelligence is an integral part of a company’s decision-making process. It is the act of collecting and analysing information about competitors and the marketplace with the intention of forming a business strategy. Competitive intelligence is more than simply analysing the competitor. It involves learning about the company’s external environment. It embraces the entire environment that involves competitors, distributors, customers, technologies, and macroeconomic data.
Types of competitive intelligence
Competitive intelligence is of two types namely, strategic intelligence and tactical intelligence.
Strategic intelligence focuses on long term strategy formulation. It focuses on the issues affecting the company’s competitiveness over a period of two years. It helps to analyse the future risk and opportunities of the company, identifies the weak signals and formulates the application of methodology best suited for the company.
Tactical intelligence focuses on short term decision making. It seeks to provide input into issues facing the company on a short run such as capturing the market share or increasing revenue. It helps support the sales process in an organisation by investigating various aspects of a product or the product line and its marketing.
Importance of competitive intelligence
Competitive intelligence taps into the market information to gather and analyse data, and form a pattern indicating the market dynamics and how the company’s presence affects competition. It helps the company decide on the best course of action to take and authorises implementations of tactics and techniques needed to beat the competition.
Competitive intelligence:
- Can provide insight to support corporate strategy, product development and marketing strategy
- Can provide tactical intelligence on how to outperform key competitors.
- Helps to be aware of market dynamics and its effect on the business
- Gives complete knowledge of the external environment which influence the company’s marketing strategy
- Helps in assessing risk by analysing the changes in the market and its influence on the business
- Helps recognise the opportunities in the current and future market to expand the business
- Helps analyse the efficiency of different markets and formulate strategies to support ‘opportunity for investment’ or expansion.
Competitive intelligence is different from corporate/industrial espionage. Industrial espionage uses illegal and unethical methods to gain an unfair advantage over the competitor. Competitive intelligence, on the other hand, uses publicly available information or information that is legally obtained.
Competitive intelligence is meaningless if it is not done on a regular basis and information needs to be analysed thoughtfully and carefully. A company’s success is determined in knowing ahead of your competitor and implementing strategies to capture the market.