In the age of instant feedback and constant data flow, we need to remember to step back every once in a while and take a look at the bigger picture. More importantly, we need to analyze the way we make decisions and ensure the process is aligned with our goals. We don’t work in a vacuum. Our actions, the actions of our competitors, the behavior of our target customers and the general macroeconomic conditions all affect the very fabric of our business climate. Therefore, it’s necessary that we include real competitive intelligence in our decision making process in order to remain relevant and innovative.
What is Competitive Intelligence?
Competitive Intelligence is a systematic process of observation and collection of relevant information about your business environment, followed by analysis and dissemination to incorporate the new data into the decision making of your entire organization. Depending on the purpose, competitive intelligence analysis can focus on the market, competitors, customers, economic, technological, regulatory and legal environment, etc. Whatever the case, the ultimate goal is to obtain information on which to base your actions. This is the key aspect that makes your competitive intelligence not just a passive attempt at competitor surveillance, but a proactive activity that enables you to detect threats, identify potential opportunities and then act accordingly.
The sources of raw information that feed into our competitive intelligence process are varied and range from patent databases to news sites to in-depth analyst reports from research groups like Gartner. The explosion of user-generated information that is occurring in the form of blogs, forums, wikis and social networks where people discuss products and companies, have only raised the importance of the competitive intelligence process. This greater number and diversity of locations in which to discover relevant information has led to our current situation that is becoming known as “infoxication“. The exponential expansion of data has crystallized our need to implement tools to help us collect, process and analyze this new wealth of information.
In innovative sectors, characterized by the emergence of new competitors and short product lifecycles, competitive intelligence is vital. Experts estimate that 75% of the current Fortune 500 companies will be replaced by 2027. This turnover is caused by the negligent disregard of changes occurring in the market, long and costly R&D practices and rapid advancements in technology that leadership teams have yet to properly take into account. Keeping a constant radar on all market conditions, including competitor activity and customer evolution, is no longer just important, it’s critical to survival.
Competitive Intelligence vs Business Intelligence
To avoid confusion, here we must differentiate competitive intelligence with other disciplines such as business intelligence. The field of competitive intelligence focuses on the external environment in which your organization operates. This process relies on sources of raw information of all kinds, external and unstructured, and takes a proactive approach to the future, with the objective of detecting opportunities and threats. Meanwhile, business intelligence also seeks to generate useful information for decision-making, focuses almost exclusively information and structured data captured and stored within the organization.
Most developed and developing countries share a common theme throughout their economies: SMEs. Spain, for example, is an economy driven almost entirely by small and medium enterprises where the level of competitive intelligence varies wildly across industries. While larger companies with access to more resources may have adopted more modern practices of Competitive Intelligence, other organizations are far from operating at the same level. We developed Kompyte in part to improve this inequality and democratize the competitive intelligence process to all companies and industries that compete online. While a one-size-fits-all approach is indeed challenging, we have developed a suite of tools that any online company can put to use immediately to capture market insights that are otherwise unavailable.
Remember, real competitive intelligence isn’t just about spying on your competitors. It’s about taking a step back, looking around and listening closely to the changes that are happening under your feet. The advancement of technology and changes in consumer behavior aren’t slowing down, they’re speeding up. The companies that spot the trends early and position themselves accordingly will be the winners, while the rest will be left scratching their heads.