how competitive intelligence works
by definition competitive intelligence assembles actionable information from diverse published and unpublished sources collected efficiently and ethically ideally a business successfully employs competitive intelligence by cultivating a detailed enough portrait of the marketplace so it may anticipate and respond to challenges and problems before they arise competitive intelligence transcends the simple clich know your enemy rather it is a deep dive exercise where businesses unearth the finer points of competitors business plans including the customers they serve and the marketplaces in which they operate competitive intelligence also analyzes how a wide variety of events disrupts rival businesses it also reveals how distributors and other stakeholders may be impacted and it telegraphs how new technologies can quickly render invalid every assumption within any organization competitive intelligence means different things to different people and departments for example to a sales representative it may refer to tactical advice on how best to bid for a lucrative contract to top management it may mean cultivating unique marketing insights used to gain market share against a formidable competitor the nature of competitive intelligence varies for different companies depending on the industry circumstance and a host of other factors for example companies that are impacted by politics and laws might require information about statutory changes that could affect the company s operations for any group the goal of competitive intelligence is to help make better informed decisions and enhance organizational performance by discovering risks and opportunities before they become readily apparent in other words competitive intelligence aims to prevent businesses from being caught off guard by any oppositional forces types of competitive intelligencelet s run through several more specific types of competitive intelligence this list is not meant to be exhaustive but it could include tactical competitive intelligence vs strategic competitive intelligencecompetitive intelligence activities can be grouped into two main silos tactical and strategic tactical intelligence is shorter term and seeks to provide input into issues such as capturing market share or increasing revenues strategic intelligence focuses on longer term issues such as key risks and opportunities facing the enterprise tactical competitive intelligence focuses on short term immediate needs and actions providing actionable insights that can be directly implemented to improve current operations this type of intelligence is often granular and specific targeting particular aspects of the business such as pricing strategies marketing campaigns or operational efficiencies for example a company might use tactical intelligence to adjust its pricing in response to a competitor s recent discount or to refine a marketing campaign based on recent consumer behavior data on the other end of the spectrum strategic competitive intelligence is oriented towards long term planning and overall business strategy it involves a broader and more comprehensive analysis of the competition including industry trends technology regulatory changes and macroeconomics for example strategic intelligence might highlight emerging market opportunities or potential threats from disruptive technologies guiding the company s future direction and investments the differences between tactical and strategic competitive intelligence also extend to the sources and methods used tactical intelligence often relies on real time data competitive benchmarking and direct observation of competitor activities this may include monitoring competitors websites social media customer reviews and financial reports for immediate insights strategic intelligence typically involves more extensive research and analysis including industry reports market research studies economic forecasts and expert opinions tactical competitive intelligence is more rapid and responsive while strategic competitive intelligence is more deliberate special considerationswhile most companies can find substantial information about their competitors online competitive intelligence goes beyond grabbing such easily accessible low hanging fruit only a small portion of competitive intelligence involves trawling the internet for information a typical competitive intelligence study includes information and analysis from various disparate sources including the news media customer and competitor interviews industry experts trade shows and conferences government records and public filings but these publicly accessible information sources are mere starting points competitive intelligence also encompasses investigating the full breadth of a company s stakeholders key distributors and suppliers as well as customers and competitors for proof of the growing importance of competitive intelligence look no further than the creation of the society of competitive intelligence professionals scip founded in the us in 1986 this global nonprofit group comprises a membership community of business experts across industry academia and government who regularly congress build out intelligence infrastructure share research decision support tools and advance collective analytical capabilities this group renamed strategic and competitive intelligence professionals in 2010 holds several national and international conferences and summits each year 1risks and downsides to competitive intelligencewhile competitive intelligence is a valuable tool for informing business strategy and decision making it also comes with certain risks and downsides companies need to be aware that in their pursuit of leading the market being competitive does come at a price one of the primary risks associated with competitive intelligence is the potential for unethical or illegal practices gathering information about competitors must be done legally and ethically to avoid issues such as corporate espionage privacy violations and breaches of confidentiality agreements consider the ethical and legal risks with the emergence of artificial intelligence while large language models have incredible capabilities there are considerations around how potentially private data is used to formulate those models competitive intelligence involves collecting and analyzing a wide range of data but there is always the risk of misinterpreting this data incorrect analysis or faulty assumptions can lead to misguided business decisions for instance overestimating a competitor s capabilities or misjudging market trends can result in strategic errors that might harm the company s competitive position the main issue here is data and information are subject to interpretation or subjectivity meaning different people can take a data set and come to a different outcome while it is important to understand what competitors are doing an overreliance on competitive intelligence can lead companies to become overly reactive rather than proactive this might result in a company focusing too much on mimicking competitors rather than innovating or pursuing its own strategic vision gathering and analyzing competitive intelligence can be resource intensive requiring significant time effort and financial investment for smaller companies or those with limited resources the cost of maintaining a robust competitive intelligence program may outweigh the benefits in the era of big data there is a risk of information overload where companies collect more data than they can effectively analyze and use sifting through vast amounts of information to find relevant insights can be challenging and time consuming which can be expensive to collect store and protect it s also entirely possible that rich useful data for competitive intelligence isn t properly used or analyzed last competitive intelligence activities can sometimes expose the company to security risks for example while monitoring competitors a company might inadvertently expose its own strategic intentions or sensitive information in addition companies may collect data on or from customers that need to be stored property by embarking on a competitive intelligence mission companies must ensure the underlying data is protected and secured 