Competitive intelligence (CI) is one that often surprises people in many organizations. This is because CI can take on many forms and be interpreted differently depending on the person(s) performing the task, which could either be an individual or a team. Many companies do not have a formal CI function, but instead, use different terms to describe the concept, such as Competitive Analyst. However, when using this term, it must be understood that this person cannot function alone or with just one other analyst. They will need to have a team behind them with complementary skills in order to effectively carry out CI activities.
At times, companies have taken on additional staff for a specific project or need, only to realize the benefit of having a full-time CI staff member after the project is complete. This person would ideally have a broad range of skills and be able to work on many different types of CI tasks. A more common practice in companies today is to hire an outside Competitive Intelligence firm that can provide the necessary skills required.
Competitive Intelligence involves an internal, or external organization that collects, analyzes and shares information about competitors’ markets, customers, products/services and strategy. Competitive intelligence can directly affect key business decisions in the areas of pricing/revenue management, product positioning (development), new market entry and with respect to organizational structure and resources. It is used as a tool for competitive advantage and can be defined as: “that information, knowledge and insight that enables the creation of opportunities and identification of threats by understanding competitors’ perspectives”.
It is typically understood that Competitive Intelligence is specific to a given business, or more specifically, to a given function within an organization. Competitive Intelligence versus Competitive Analysis can be defined as follows: Competitive Intelligence has more of a broad focus with multiple sources, whereas Competitive Analysis typically focuses on one product or market segment. Competitive analysis tends to be narrow in scope which makes it more tactical in nature.
With the increase in competition and expanding markets, investing in Competitive Intelligence activities is a great way to stay ahead. Gathering data and conducting research should be an ongoing activity, as CI is meant to support the long term decision-making process.