How Can You Do Better Than Your Competitor?

By Author: Kirthy Shetty
Total Articles: 2542
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What is competitive intelligence? Does it mean corporate espionage? The recent Hollywood blockbuster, Inception has a whole storyline based on corporate espionage in an effort to steal competitive intelligence.

The overall definition of competitive intelligence is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization.

Some of the points that emerge from this definition are that competitive intelligence is an ethical and legal business practice, as opposed to corporate or industrial espionage which is illegal. The key focus of competitive intelligence is on the external business environment. There is a process involved in gathering information, converting it into intelligence and then utilizing this in business decision making. Competitive intelligence professionals emphasize that if the intelligence gathered is not usable or actionable then it is not intelligence.

A more focused definition of competitive intelligence regards ...
... it as the organizational function responsible for the early identification of risks and opportunities in the market before they become very apparent. Experts also call this process the early signal analysis. This definition focuses attention on the difference between dissemination of widely available factual information such as market statistics, financial reports, newspaper clippings performed by functions such as libraries and information centers, and competitive intelligence which are a perspective on developments and events aimed at yielding a competitive edge.

The term competitive intelligence is often viewed as synonymous with competitor analysis, but competitive intelligence is more than just analyzing competitors — it is about making the organization more competitive relative to its entire environment and stakeholders which in this case are - customers, competitors, distributors, technologies, macro-economic data etc.

Many organizations use competitive intelligence to compare themselves to other organizations in a process called as ‘competitive benchmarking' to identify risks and opportunities in their markets, and to pressure-test their plans against market response, which enable them to make informed decisions. Most firms today realize the importance of knowing what their competitors are doing and how the industry is evolving, and the information gathered allows organizations to categorize their strengths, weaknesses, opportunities and threats.

The actual importance of these categories of information to an organization depends on the contestability of its markets, the organizational culture, and personality and biases of its top decision makers, and the reporting structure of competitive intelligence within the company. Competitive intelligence helps every organization.

Kirthy Shetty.
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