CI (Competitive Intelligence) can be a truly powerful business tool for companies that use it correctly. In order to be truly strategic and effective, management needs to understand why a competitor behaves a certain way. Otherwise, employees will either be spending too much time trying to make sense of large amounts of data, or looking for an elusive or non-existent "smoking gun."
It's critically important to stay focused on strategic issues, and try to better understand both your competition and your market. Like a good mystery novel, the most important clues are often in full view, but it takes patience and skill to find the key points in a business plan or go-to-market strategy.
Key Points to Consider
It's very tempting to use CI as a tactical sales tool. But forward-looking companies institutionalize the use of CI reports, market analyses, win/loss analyses and prospect interviews, and the creation of CI sales guides.
It's not easy to collect and sift all the necessary information; it calls for specific search and analysis skills and resources. And it takes hard work and commitment -- and a logical knowledge management process -- to do it right. Yet most of the important differentiators already exist in your company, if you know where and how to look.
CI also stands for "customer intelligence" and as such, it can be a very useful technique for management. The methodologies that apply to competitors can be used to look at business partnerships as well.
Tips for Those Considering CI
It's important to "read between the lines" when assessing a competitor's positioning, listening to its earnings calls, or attending conferences. Typically, things not said will hint at areas of weakness or potential concern. Conversely, the company's statements about its areas of focus point to the areas it doesn't emphasize. Another point: a company's short-run competitive moves almost always reflect its longer-term beliefs, assumptions, and strategies.
Formal training with groups such as SCIP (the Society of Competitive Intelligence Professionals --www.scip.org) and the Academy of Competitive Intelligence (www.academyci.com) provide a good foundation for what it takes to create and manage an effective CI program.
Four Corners Analyses
Four Corners analyses are useful for predicting competitors' likely future behavior. Derived from management strategist Michael Porter's work on competitive forces, the technique looks at the factors that drive senior management: their assumptions about the competitiveness of the market, the capabilities of various companies, customers, and suppliers, and the success of the company's current strategy.
CI is not just another sales tool. Yet it's often seen by field personnel as a one-way conduit to be used on the way to a meeting with a prospect. You must educate your sales force (and other stakeholders) about what CI is, and what it isn't. You've got to set appropriate expectations to truly focus on the important projects and primary research. If CI is used to merely regurgitate known competitive positioning, the opportunity cost is huge.
Also, few businesses effectively use CI to leverage the support of their senior executives in visits to customers and prospects.
Common Sources of Information
SEC filings are extremely valuable. So are analyst calls, where senior managers take questions which are often very pointed -- and the answers can reveal a lot. There are also several powerful desktop resources, including Factiva, Hoover's, OneSource, and Thomson's Dialog or InSite 2.