What is Competitive Intelligence?

Competitive Intelligence (CI) is a growing field that involves the practice of gathering, analyzing, and using information about competitors, markets, and industry trends to make strategic business decisions. According to recent studies, 91% of businesses conduct CI activities, and 74% of them claim that CI helps them make better strategic decisions. In this post, a quick overview of CI in business and its components, process, benefits, and techniques.

CI is essential for organizations to stay competitive, identify opportunities and threats, and make informed decisions. It is the analysis of an enterprise's marketplace to understand what is happening, what will happen, and what it means to the enterprise. The business goals of CI may be offensive or defensive, such as positioning the company in the marketplace, plotting a course for future positioning, knowing what is happening, what may happen, and how to react.

Components of Competitive Intelligence

The components of CI involve data collection and analysis, market research, competitor analysis, and business intelligence. Companies gather information from various sources and analyze it to understand customer preferences, market trends, and the strengths, weaknesses, and strategies of rival companies. The most popular CI tool is SWOT analysis, used by 87% of businesses. Social media monitoring is also a popular CI tool, with 64% of businesses using some kind of social media monitoring for CI purposes.

Competitive Intelligence Process

The CI process consists of four stages, including setting objectives, gathering information, analyzing information, and communicating findings and recommendations. The planning and direction stage involve establishing goals and objectives for the CI effort, followed by data collection and analysis to identify key insights. The findings are then disseminated to decision-makers, who use the insights gained from the analysis to make informed decisions.

Benefits of Competitive Intelligence

CI provides several benefits to organizations, including strategic decision-making, anticipation of market changes, identifying potential opportunities and threats, and understanding competitor actions and strategies. The top three reasons businesses conduct CI are to understand market trends, monitor competitors, and identify new business opportunities. The majority of CI activities are focused on collecting and analyzing external data, with 69% of businesses using CI to support their sales and marketing efforts, and 54% using it to support their product development efforts.

Examples of Competitive Intelligence Techniques

There are several techniques companies can use to conduct CI, such as SWOT analysis, competitor analysis, and market research. SWOT analysis involves identifying an organization's strengths, weaknesses, opportunities, and threats. Competitor analysis involves studying the strengths, weaknesses, and strategies of rival companies. Market research involves gathering and analyzing data on customer preferences, market trends, and other external factors.

In conclusion, CI is a crucial aspect of any organization's strategy, as it provides decision-makers with the information they need to make informed choices. Companies can use various techniques to conduct CI, and the insights gained from the analysis can help them stay ahead of market trends, identify potential opportunities and threats, and understand competitor actions and strategies. By using CI, businesses can make strategic decisions that can help them stay ahead of the competition and thrive in their respective markets.

References

Bloomenthal, A. (2022, December 31). Competitive Intelligence: Definition, Types, and Uses. Retrieved from Investopedia: https://www.investopedia.com/terms/c/competitive-intelligence.asp

Competitive Intelligence (CI). (n.d.). Retrieved from Gartner.com: https://www.gartner.com/en/information-technology/glossary/ci-competitive-intelligence

Crayon.co. (2022). Guide to Competitive Intelligence.