How to Conduct Competitive Intelligence

A man looking out a window with binoculars as an example of doing competitive intelligence.

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One of the most effective market research strategies generally referred to as competitive intelligence (CI), is based on the gathering, analysis, and application of business information about a company’s rivals.

Arik R. Johnson, Managing Director of Aurora WDC, provides this definition of competitive intelligence:

CI is the purposeful and coordinated monitoring of your competitor(s), wherever and whoever they may be, within a specific marketplace.

Because CI is carried out in a continuous cycle, several basic steps must reliably occur.

Determine CI Research Objectives

In any form of market research, the first step is to determine the research objectives. The primary and end goal of market research is to take action on the information that is obtained. It is probable and desirable for the discovery process of competitive intelligence to result in unanticipated information. But, since CI is an expensive undertaking, it is critical to identify what is already known about rivals, what gaps in information exist, and then from that base, to identify specifically what the CI process is intended to learn. The key to strategic competitive intelligence is knowing enough about your competitors to predict what they are likely to do next.

Evaluate Existing CI Data Collection Strategies

Once knowledge gaps and specific competitive intelligence research objectives have been identified, the strategies for gathering this data must be refined. An aspect of this step is to examine the capacity of existing research strategies for producing high quality and actionable data. The extent to which data collection results in information that fosters effective business strategy is the litmus test of a CI program.

Determine CI Data Collection Strategies

A thorough and honest evaluation of existing data collection strategies generally points the way to what data should be culled, what needs further development, and what is missing from the CI program. The competitive intelligence research design must consider the feasibility of collecting desirable data, the relative cost of potential strategies, and the options for metrics to determine research effectiveness.

Set Up Access and Integration Systems

When a CI plan has been carefully designed and conducted, its value increases over time. Historical information can be critical for establishing a pattern or profile of a rival's strategic tendencies and decisions. Intelligence should be stored in a manner that permits and tracks appropriate access, fosters data mining and data integration, and ensures consistent security processes. CI is typically owned by a firm's marketing department, but it should be safeguarded by sophisticated security provided by the firm's in-house technology associates.

Establish Analysis and Reporting Processes

Starting with the end in mind is a strong approach to competitive intelligence data analysis and reporting. A clear idea of who the audiences are for the CI reports will help to determine what assurances are important for internal credibility, or stakeholder buy-in. For example, reports provided to sales staff may look very different from the reports provided to the marketing department. An effective CI plan will provide detailed strategies for analyzing data, including necessary software, qualifications, and training of personnel, and a dissemination calendar.

Plan Dissemination

Planning for dissemination requires in-depth knowledge about business unit calendars and business cycles. For competitive intelligence to be of value to an enterprise, it must be actionable, and it must be timely. There is a measure of grace in the cyclic nature of CI. Information that is not available one quarter may be discovered in a subsequent quarter. But ideally, anticipated CI outcomes should be integral to the corporate strategy formulation and provide a basis for tactical decision-making, as well.

Write the Story

Most market research is best presented to audiences in the form of a story. That is to say that the information should be interpreted for the audience in a way that clearly illustrates relevance to the audience members. Since the logical application of competitive intelligence is the support of decision-making, potential CI users should understand how data was collected and be made confident of that data through corroboration processes. The audience of a CI report should also be made to understand the estimated cost of not collecting or using specific competitive intelligence.

Stay Current With the CI Industry

The nonprofit organization Strategic and Competitive Intelligence Professionals (SCIP) is a good place to learn more about current issues in the CI industry. Members represent market research, strategic analysis, business development, and information management technology. The organization's scope is broad, including ethical and legal standards for collecting business information about the strategic intentions, business capabilities, and particular vulnerabilities of rival companies. Start exploring with a CI consultancy member of SCIP.