If you own a business you’re likely conscious of the fact that certain organizations seem to have everything going for them. They enjoy a large market share, they always come out with the most innovative products, and continuously achieve impressive sales figures. You’ve also likely asked yourself - “How are they doing this?”
The secret to these organizations’ seemingly mystical success is competitive intelligence (CI). It is by gathering intel on their competitors and their markets using competitive intelligence, and then formulating strategies based on this intel that these organizations gain a competitive advantage, and thus, always stay a step ahead in the game. Business success is all about being able to make better and informed decisions confidently, before anyone else, and this is exactly what competitive intelligence allows organizations to do. In this article, we’ll discuss the advantages competitive intelligence can offer your business, its importance in an organization, as well as how it benefits business performance. Let’s get started.
What Are the Advantages of Competitive Intelligence?
Before we begin to discuss the specific competitive intelligence advantages for your organization, let us discuss the overarching advantage of CI; something known as information advantage. This information advantage ensures that you’re never taken by surprise; neither by the market nor by your competitors. As put forward by Bloomberg, “competitive intelligence is your best alarm clock”, because it alerts you to take action whenever an opportunity or a threat arises. Competitive intelligence’s information advantage can be broadly categorized up further into 4 more advantages, which are as follows:
Predicting Your Competitors' Moves
Most businesses use competitive intelligence largely to be able to predict the moves of their competitors and stay ahead of them. While this is not the only advantage of competitive intelligence, it is still one of the critical ones. Based on the insights gathered from the changes on competitors' websites, their social media updates, announcements, presence in the news, review sites, job portals, and the like, you can get a clear picture of what your competitors have planned in the future, and the direction they're headed. As the adage by Sun Tzu goes - "Knowing your enemy is half the battle." Similarly, knowing your competitors allows you to better prepare your own business for changes in the market or an evolving industry.
Refining Your Marketing Strategy
Your market positioning plays an important role in determining how well your product or service will sell. Your marketing strategy, thus, is a crucial undertaking. The insights gleaned from competitive intelligence help create your marketing strategy, whether you're looking to maximize revenue from an existing product or service, trying to launch a new product/service, or entering a new market. Competitive intelligence can not only get you good customer knowledge - which will be invaluable in forming your marketing strategy - but help you examine the marketing mix of competitive brands and products in the space. You can determine what is working for your competition and what their best practices may be, and then translate those findings into a tailored marketing strategy that fits your business’s specific situation.
Understanding Customer Sentiment
Insights from competitors’ customers, such as their likes and dislikes, as well as how they feel about the products/services and companies in the market can be very important for an organization's strategies. Using these, you can better understand what they value and appreciate, and their level of satisfaction with what your competitors are doing. If the customers are satisfied with your competitors' products or services, competitive intelligence can help you find out what’s working for them. Similarly, if customers are consistently disappointed by a particular product feature or customer service issue, you can leverage that over the competition by improving your own product or customer service.
Figuring Out Your Company's Direction
Doing the same thing over and over again without any efforts to improve and innovate can be hazardous to your business. Competitive intelligence can offer inspiration to get you out of such a rut. Insights on the kind of innovation your competition or other companies in an adjacent market are doing can help your organization think outside the box. Such insights may inspire you to altogether change some of your strategies regarding your organization's key functions. Better still, competitive intelligence will constantly allow you to monitor your market and competitors as you make your moves successively.
What is the Importance of Competitive Intelligence in an Organization?
Competitive intelligence is important for any organization, as it can give them a competitive advantage over their competitors by enabling their business leaders to make informed decisions. Competitive intelligence is now an integral part of the business strategy of organizations globally as it helps them understand their competitive environment, its opportunities as well as its challenges. By acting as a bridge between information and action, competitive intelligence enables organizations to do the following:
1. Monitor market trends, customer expectations, emerging technologies, disruptors, and changes in their industry to better position themselves.
2. Predict their competitors’ next moves and be ready to counter them through qualitative and quantitative information.
3. Identify future threats that might arise in their industry.
4. Find opportunities for business growth.
5. Improve their sales pitches to win more deals.
6. Benchmark themselves to identify gaps and understand where they can improve.
7. Make strategic business decisions with confidence, armed with actionable insights and research.
8. Enhance time-to-market, market-entry, and market defense capabilities.
Thus, when utilized to its full potential, competitive intelligence provides businesses with the most detailed and accurate course of action regarding all their key functions. But that's not all.
CI isn't just important because of the competitive advantage it offers organizations. Digital technologies are rapidly making the market more competitive and agile. Due to this, competitive intelligence has now become not only a tool for offense against competition, but to defend oneself from them. Here are some more reasons why the implementation of CI will soon be a standard practice for businesses:
- With increased business activity, the expectations of customers are increasing too. Customers now expect faster delivery of products and services, as well as quicker communication. CI is required for efficient customer service.
- Organizations have too much data on their hand, and no time to identify which of it is relevant. CI is relevant information that organizations need, and focusing just on CI ensures that stakeholders don’t pay heed to any other clutter. This prevents information overload and maintains an organization's digital sanity.
- Competition is becoming global. Companies now have the means and the technology to sell their products far and wide, without any geographical constraints. This means that you need to be proactive in defending your market share as well as neutralizing threats.
Consequently, competitive intelligence is highly important in the present-day, dynamic markets, and will be more so in the future as more technological breakthroughs take place. Lack of CI in such times can be downright harmful to organizations, and can lead to uninformed decisions, loss of direction, or worse, loss of market share.
How Does Competitive Intelligence Benefit Your Business Performance?
Competitive intelligence, at its core, is information. But not just any information, it is industry-specialized information about your competition that you can use to make informed decisions. This actionable information is valuable because it offers businesses the insight they require to boost their business performance. Competitive intelligence gives you an idea on what you should be doing, making organizational functions more efficient. This has worked out well for countless businesses all around the world who use it to get ahead of their competition. How you use competitive intelligence is up to you, but this is usually how CI improves business performance:
1. It positively influences the process of strategy formation by providing timely, relevant, and useful information on the business environment and competitors, which is critical to strategic decision-making.
2. When delivered to respective stakeholders, competitive intelligence augments the development and implementation of strategies.
3. Continuous use of CI within a company creates defense capabilities and can be a source of sustainable competitive advantage.
Competitive intelligence removes all the guesswork from your strategy development process and powers it with accurate insight.
We live in one of the most competitive environments in the history of the business world. Competitive intelligence is a requisite if you wish to be able to survive in this age of information. Although companies have always informally gathered intel on their competitors to gain an advantage over them, the amalgamation of technology to the field of competitive intelligence has made it 10x more effective than ever before. AI-powered market and competitive intelligence software like Contify can give you a comprehensive picture of your market and competitive landscape by delivering insights gathered from relevant online sources. Insights from each of these sources offer a perspective you can use to gain a competitive advantage. Using CI to make informed decisions is an endeavor you shouldn't dismiss, because your competitors certainly won't.