Answering the question “what is competitive intelligence?” is simple, but to truly understand it, some examples can be very helpful. For this exact reason, this article will focus on several competitive intelligence examples from the business world and beyond. But first, let’s take a look at what the competitive intelligence actually means:
Definition of competitive intelligence
Competitive intelligence is the systematic process of observing, collecting and analyzing relevant information about the external business environment and distributing the resulting insights within an organization in order to make informed decisions. It can focus on competitors, customers and other stakeholders, but also on products and markets as well as on economic, technological or legal factors. Regardless of the scope, its main purpose is to understand the external environment so that appropriate actions can be taken by businesses to stay competitive.
Competitive intelligence examples
The airline industry is a great example of how competitive intelligence is being used in practice. Every day, airline companies are changing their flight ticket prices based on several pieces of external information. For instance, if all competitors increase their price for a certain route, a flight provider would quickly follow suit to secure higher margins. In addition, customer information is frequently used for pricing adjustments. By identifying and tracking specific users, flight companies can spot when a potential customer is repeatedly searching for the same flight details and increase the prices over time, since they can be sure that they really want to fly on these dates.
Investment banking and trading is another perfect case for highlighting the importance of competitive intelligence. While all bankers have access to the same information (excluding illegal cases of insider trading) through news channels, financial statement reports, industry research papers etc., those who know how to use and analyze the available information to gain valuable insights will have the best chances to outperform the rest.
Startups are also fantastic competitive intelligence examples, as they use this kind of information to disrupt markets. Whereas traditional companies have higher budgets, resources superior technology and often data too, startups are often able to outperform them in specific niche segments. By focusing on a particular field and processing, reacting and adapting rapidly to competitive intelligence insights, they can understand client pain points better and deliver superior solutions. Think of Airbnb and how they were able to leverage technology, socio-demographic change and consumer insights to disrupt the hotel industry.
The sports industry is one of the most competitive in the world and, recently, the ability to process and interpret external data has been a big success factor for organizations around the world. Just think of Billy Beane taking the baseball team Oakland Athletics to unprecedented success levels in spite of operating under one of the lowest budgets in the league. But aside from the famous ‘moneyball story’ there are plenty of other case studies. Other good competitive intelligence examples can be found in the football world where teams like Sevilla FC and Southampton FC perform miracles every year, in spite of their budgets. The reason they outperform their budgets is that they excel in gaining new data (scouting) and insights (analytics), and effectively distributing this information among their management teams.
Competitive intelligence is pivotal to business success across a vast amount of industries. Great examples of its benefits can be found almost anywhere, from the financial sector, to the sports world, to tech startups. In each of these cases, the common denominator is that organizations who are able to outperform their peers do so by mastering the collection, interpretation and distribution of competitive intelligence.