Competitive Intelligence

By Dr. Marilyn M. Helms; Dr. Helms is the Sesquicentennial Endowed Chair and Professor of Management at Dalton State College in Dalton, GA.

Competitive intelligence is a systematic ethical program for gathering, analyzing, and managing external information affecting your company’s plans, decisions, and operations. The concept of competitive intelligence is based on gathering the right kind of strategic information and applying it to decision making processes. A competitive intelligence effort becomes effective only when a corporate culture encouraging employees to share information has been created and senior management learns to listen and implement the new information wisely. As such, competitive intelligence plays a vital role in the survival of small and large businesses.

Competitive intelligence can enhance marketplace competitiveness. For example, gathering information about the capabilities, vulnerabilities, and intentions of business competitors can provide a greater understanding of the market and the various players in the market. Much of the information too is easily gathered using information databases and other "open sources" of intelligence.

Competitive intelligence is increasingly considered an important, if not mandatory, piece of every business’ overall strategy and functioning. If developed and used in the right way, competitive intelligence can boost a business’ bottom line as well. But the key is developing and using it in the right way, based on a particular business’ needs, organization, and competition. That key will help you understand your competition, learn your competitive edge, and rank the importance of effect of possible future scenarios. Employees too will learn the significance of corporate security as they see information available about competitors as well as their own company.

Competitive intelligence is comprised of many different types of information which includes competitor, customer, market, technological, product and environmental. In addition to this factual data, competitive intelligence also involves the ability to develop an understanding of the strategies and mind-sets of your competitors. One of the key success factors in this intelligence process is to develop a sense of probable competitive reaction to an industry development or an initiative of your own. This reflects the linkage between research and strategy.

As much as 95 percent of intelligence is available just for the asking – some from web sites, vendors, trade shows and business articles. The challenge is to build an informal network that actively seeks out the information in a routine and regular manner. This does not imply a large mechanized process or organizational empire, yet it is a formalized process for gathering and analyzing information.

Like effective strategic management, competitive intelligence does not begin or end with senior management. Just as competitive intelligence is used at all levels; it must also be collected at all levels. Wherever and whatever competitive intelligence is found, it must be synthesized and disseminated to those within the organization who need it. This process must become a natural part of the daily business routine.

Competitive intelligence's focus is external events and trends, with a strong focus on competitor’s activities and likely intentions. A key goal is “early warning” – timely alerts to allow decision makers to take preparatory action to maintain competitive advantage. Competitive intelligence can detect changes in the market early and quickly enough to make a difference for the strategic position of the company.

Continuous monitoring of competitors, customers, suppliers, and other industry forces should be an integral part of the overall strategic management process of companies. Competitive intelligence is much more than a management discipline; it is a practical, useful, and changing method of determining where a company stands in the business world and how it can compete effectively and knowledgeably in its marketplace. Competitive intelligence is becoming necessary to ensure not only success but also survival.

The competitive technique is also useful on a personal level. As business professionals prepare for new job markets, it is important to use the techniques of competitive intelligence to research industry players and general business trends as well as salaries, the economy, and the particulars of the regional job market.