Principles of the Competitive Intelligence

Organizations use competitive intelligence to compare themselves to other organizations, which enables them to make informed decisions. Most firms today realize the importance of knowing what their competitors are doing, and the information gathered allows organizations to realize their strengths and weaknesses. With the right amount of information, organizations can avoid unpleasant surprises by anticipating competitors’ moves and decreasing response time.

Examples of Competitive Intelligence research are evident in Daily Newspapers, such as the Wall Street Journal, Business Week and Fortune. Major airlines change hundreds of fares daily in response to competitors’ tactics. They use information to plan their own marketing, pricing, and production strategies.

Resources, such as the Internet, have made gathering information on competitors easy. With a click of a button, analysts can discover future trends and market requirements. However competitive intelligence is much more than this - as the ultimate aim is to lead to competitive advantage. As the Internet is mostly public domain material, information gathered is less likely to result in insights that will be unique to the company. In fact there is a considerable risk that information gathered from the Internet will be misinformation and mislead users.

As a result, although the Internet is viewed as a key source, most CI professionals will spend their time and budget gathering intelligence using primary research - networking with industry experts, from trade shows and conferences, from their own customers and suppliers, and so on. Where the Internet is used, it is to gather sources for primary research as well as information on what the company says about itself and its online presence (in the form of links to other companies, its strategy regarding search engines and online advertising, mentions in discussion forums and on blogs, etc.). Also, important are online subscription databases and news aggregation sources which have simplified the secondary source collection process.

Organizations must be careful not to spend too much time and effort on old competitors without realizing the existence of any new competitors. Knowing more about your competitors will allow your business to grow and succeed. The practice of Competitive Intelligence is growing every year, and most companies and business students now realize the importance of knowing their competitors.