Your business doesn't exist in a vacuum.
Whatever sector you operate in, and however unique your selling proposition, there will always be other businesses competing for customers in your field.
A competitor is a rival company operating in the same industry as you, selling similar goods or services. You may be competing against your rivals to win customers on the basis of price, the type of product you sell, the type of promotions you run, or perhaps the quality of service you offer.
When you look around at your current competitors, do you know what they're doing? Do you know how effective their current operations are, or how satisfied their customers are? When you develop your business strategies, do you consider what your competitors' strategies might be?
About Competitive Intelligence
This sort of knowledge is competitive intelligence (CI). It's generally part of a market intelligence plan, which is designed to improve your business decisions by keeping you up to speed what's happening in the external market environment.
Using CI practices, you can monitor and assess the actions of competitors and long-term market prospects. This helps you gain valuable information, and develop proactive plans to reduce the chances of receiving unexpected news – like a competitor's new product launch, or a change in pricing strategy.
You've probably heard sensational stories about unethical competitive espionage – like companies sending spies into a competitor's research and development department, or paying a former staff member for information about another business. Fortunately, you don't have to resort to such covert means, as you can learn a great deal from legitimate, legal sources. The key is deciding to look in the first place – and then knowing where and how to look.
What is Competitive Intelligence?
Competitive intelligence is the systematic monitoring of your competitors' actions to determine what they're currently doing – and what they're likely to do in the future. By gathering this type of information, you improve your own decisions, both strategically and tactically, and you get a better understanding of your own competitive position.
For example, if you know that a major competitor is pursuing an acquisition strategy, then you might decide not to compete on size, but to focus on quality and customer service instead. Or, if a competitor starts to buy raw materials from another country, you might emphasize that you use ‘home-grown' materials as a theme for your next advertising campaign