Competitive intelligence to prevent others from eating your lunch
When relaxing or working at home, it is common to gaze across at your neighbour. Call it curtain twitching, being nosey or reconnaissance, but most of us look at what they have. Are they happier than I? What have they had done to the house? What new car is that? Eventually, they decide to extend their property, add a conservatory, decking and a garden pod. They host regular dinner parties, barbecues in the summer and croquet on the lawn. You may be a little jealous or you may be happy for them. But what if they knock on your door and offer you ￡100k below the true value of your home? The analogy is not too dissimilar to business. Sure, you have an idea what your peers are doing but do you know the full story? How well are they performing? Are they eyeing up strategic acquisitions? So, to defend against such events, we discuss competitive intelligence to prevent others from eating your lunch.
Competitive intelligence
Competitive intelligence is the gathering of information by an organisation to understand and compare themselves to other organisations. This may involve elements such as trying to identify potential risks and opportunities and changes in the market environment to leverage to your advantage. Organisations that fail to do this are analogous to an ostrich with its head in the sand. Conversely, organisations that do this are like the alert meerkat, scouring the horizon to warn others of upcoming threats.
In our experience, there is confusion over the audience for such competitive intelligence. Some suggest that responsibility for collating this may rest with marketing, as they try to understand the customer and marketing messages of competitors. Others may consider it a facet of a commercial team as they hunt for opportunities to exploit with new products, propositions and promotions. Additionally, some might say that it is part of the job of the management team to continuously display awareness of their environment. Informally, intelligence may be shared as occasional ‘snippets’ of information during conversation. In truth, a RACI and a stakeholder mapping exercise are helpful to understand who needs to produce it, where it must be communicated and who takes what action.
Competitive guesswork?
Most organisations don’t set aside budget for such information. It may be part of the marketing budget or a ‘sunk cost’ from internal resource. In years when results start to worsen, this may put such intelligence under pressure as budgets get the axe or headcount is reduced. So, let’s look at some of the problems that organisations face.
Personal biases reduce usefulness
Collectors and users of competitive intelligence may seek facts to support their own beliefs. Some users see themselves as less biased than other people and believe that they are more objective. Others display overconfidence that what has worked in the past will always work in the future, so they don’t need to listen. This may lead them down blind alleys based on personal intuition or fallacy. Unfortunately, this can stop business leaders from investing in competitive intelligence – they believe know what works and what doesn’t work in their industry better than anyone else can.
Problems with other forms of research
Similarly, we also know that many forms of research are filled with biases. There are many ways to influence the results of surveys, interviews and focus groups, for example. We also know that Six Sigma’s CTQ and the NPS metric can be misinterpreted. At least you can reliably see, capture and understand what competitors are doing. Do we measure up? Are there any gaps in our proposition? What innovations and technologies are they leveraging? What strategies are they pursuing? This reduces the guesswork as to where to focus your competitive efforts. Ultimately, companies (read investors) want to solidify and build upon competitive competencies and the resulting advantages without the guesswork.
领英推荐
Weaknesses of competitor research
In this article, we will not be covering data and the sources of competitive intelligence. What we would be remiss not to mention is the time, focus and thoroughness of in-house collection, dissemination and subsequent decision-making. Typically, there is a lack of most of these within organisations. Even if the budget exists, some information is collected but never communicated. Some is never collected or collected sporadically. Often, information is disseminated in a random fashion with little-to-no evidence of any decision taken as a result.
Examples of competitive success
Examples of competitive myopia
Conclusion on competitive intelligence
We believe that competitive intelligence needs a strategic approach and a regular cadence to collection, dissemination and contemplation by appropriate stakeholders. A third-party suffers less from the internal biases that plague organisations. They are also more likely to look beyond the obvious, having the freedom and time to pursue their intellectual curiosity. Remember, it only takes one eureka moment to change your fortunes. It also takes one omission or failure to take action to have you playing catch up.
Contacting Think Beyond
If you would like to find out more, simply get in touch by calling our team, a short email message or via our contact form.
Alternatively, you can find out more about our range of research services.
Finally, why not check a related article about understanding external business influences.