Competitive intelligence is the study of an organization’s competitors and their respective strategies to gain insight to increase your own organization’s success. It involves gathering and analyzing information on your company’s competitors, such as products, services, prices, promotional offerings, customers, and suppliers. It is less concerned with what a competitor is doing than why they are doing it- this approach leaves a competitor’s plans open for interpretation or exploitation. The purpose of competitive intelligence is to gain and maintain a competitive advantage. In this sense, it can be seen as the process of obtaining insights that give a company a distinctive edge over competitors. The first step in creating new value is to retain the value within an organization. The second step is to create, acquire or influence new sources of added value, new products, services, or markets, and attract other organizations for strategic alliances. Competitive intelligence helps in both steps.
Competitive Intelligence Tools Used By Leading Companies
1) Company profiling: Profiles help you see the target environment and your competitors with fresh eyes. It enables you to get an overview of your competitors. Companies use a variety of sources to collect data for general profiles, such as annual reports, financial reports, investor information services, industry directories, and news articles. Semi-structured interviews with experts in the field can also help identify relevant factors.
2) Competitor Analysis: It identifies, understands, and describes a competitor regarding your product or industry. It involves researching a specific company or industry’s strengths, weaknesses, and strategies. The information gathered can then be used to gain an advantage over the competition.
3) Industry analysis: Understanding industry trends and issues is vital to success. Research allows you to keep abreast of all the best practices in your industry. It helps you see where you stand and to identify challenges and opportunities.
4) Market share analysis: Market share analysis is used to identify buyers’ positions in the market and analyze their preferences for different products. The information gathered from all information sources is then used to study market share drivers, market trends, current positions, competitors, and other information that will give you a snapshot view of your customers.
5) Competitive advantage: Competitive advantage is a process of creating value by taking advantage of circumstances that are beyond your control. You can obtain it by analyzing trends and opportunities in the industry and using them to enhance your product or service offering. The competitive advantage allows you to differentiate yourself from competitors and use that as a basis for creating equity.
6) Value chain analysis: Standard competitive intelligence tools are helpful only in the short term, but competitive intelligence is essential for long-term success. In business, you can add value to an organization and a product through product development, engineering, marketing, sales, and support. These processes are usually independent of each other, and their efficiency can vary based on factors such as the product or service type. Value chain analysis allows you to identify the value-added by each step in your supply chain. It also enables you to identify opportunities for optimizing these steps, creating more incredible value.
7) Value creation: Competitive advantage is vital in business, but in some cases, it can backfire if you do not execute it correctly. On the other hand, value creation is a process that helps you create more value. It involves creating more value from every input and using this to expand your reach and profitability.
It is a process that generates valuable insights into the organization’s adversaries and competitors. The outcome of the process is information that can enhance productivity, strengthen relationships, terminate relationships, redesign products and services, or develop new ones. Rapid change helps companies maintain their competitive advantage in a volatile global economy.