Around 500 of the largest American companies – and even the American government – have departments dedicated to monitoring each step that their competition takes. Even though many of these methods of “espionage” are not recommended, this is a way to deal with unpredictability, anticipate surprises and measure factors that can interfere in your business’s success. And this isn’t just domestically.
This strategy is known as competitive intelligence. It consists of capturing relevant information about your competitors, customers, suppliers and the market as a whole, and it’s used not just to react to unexpected events, but also to anticipate trends, shape a sustainable business model and create strategies that will drive growth.
In this post, we’ll talk a bit about competitive intelligence and why your company needs to adopt this strategy. Take a look!
Why should companies adopt this type of strategy?
Businesses need to collect all of their market information in an intelligent manner, not only to understand customer behavior, but mainly to reduce costs.
It may not seem so, but your competitors are an excellent source of this information. Used in an intelligent manner, competitive intelligence, also known as CI, is a way to learn and optimize your short-term and long-term strategies, based on your market competition.
It’s a practical and innovative method of monitoring activities and analyzing what your competitors are doing to identify what market trends are, evaluate the best opportunities (SWOT), and surpass your competitor’s results through better planning and decision making.
Put in a colloquial manner, “knowing your enemy is having a better knowledge of yourself.” But the truth is that globalization, with its changes in consumer behavior and markets, which was previously viewed as a “threat” has now become an ally of managers and comptrollers who have adopted a more results-oriented style.
How should you use competitive intelligence?
Many companies focus on an informal style of model analysis and market intelligence — through sporadic research, the collection of irrelevant data and press reports. This practice has proven inefficient, because most of the processes are already underway — or worse: have already happened.
Competitive intelligence helps companies learn more quickly and change their business plans in a more innovative manner. In a market in which more and more businesses have the same market proposal, the same presentation and even the same products and services, differentiating your company is the golden rule to creating a competitive advantage.
The application of CI is based on forces such as market entry, negotiating power with suppliers and buyers, and threats of substitution and rivalry. The strategies used are based on analyzing this information and forming a planning team that will identify opportunities and threats with an understanding of the impact that their actions will have on the market and on your competitors themselves.
The internet has made this type of analysis easier due to the quantity of information available online, where there’s an effective trading of data between businesses, suppliers and users in a socialization that occurs in real time – which makes it a unique environment for data collection.
It’s essential for businesses to train professionals to not just gather information, but to interpret it in a pro-active manner — and not just reactively as usually occurs in most businesses worldwide.