Most companies feel competitive intelligence sounds useful in theory but are not sure about its highly beneficial practical uses and applications. So, let’s get an overview of the digital technology, competitive intelligence, and its importance in this article.
What is competitive intelligence
Competitive intelligence (CI), also known as corporate intelligence, refers to a firm’s efforts to garner and analyse information about its competitors, customers, and other market elements to anticipate competitive activities, identify competitive gaps, and optimize internal strategies.
Importance of competitive intelligence
94% of businesses have already invested in competitive intelligence. Following are some of the details that explain why competitive intelligence must be viewed as a crucial element when constructing a business strategy:
To stay alert & active: Companies cannot sustain and succeed just by selling products and services. They need to be updated about the changing trends, market dynamics, consumer behaviours, competitor activities, etc, to address situations promptly. For instance, a car company should pay attention to events of the automotive industry as well as their direct competitors (other car companies) and indirect competitors (E.g.: Ola, Uber, bikes, etc). Using competitive intelligence, the car company can streamline its production activities, optimize pricing strategies, discontinue less–selling cars, etc.
Innovate successfully and avoid pitfalls: Besides providing information on competitors’ strengths and weaknesses, competitive intelligence also provides insights that can help businesses avoid pitfalls and make strategic decisions. Even more, with CI, companies can identify potential opportunities that can serve as recipes for innovation.
Learn from others’ experiences: There is always something to learn from both success and failure. Learning from others‘ mistakes and experience is cheaper and more advantageous than waiting to learn from our own. Thanks to the Internet for making success and failure stories quickly and easily accessible. Reading these stories constantly is one great exercise that can help all organizations to market, sell, distribute, position, and build products more effectively, irrespective of their size and industry.
To outrun competitors:
Companies, particularly those that are small-sized, can greatly benefit from competitive intelligence and can successfully grow and expand their businesses. While large-sized businesses can outrun their competitors with competitive intelligence, small-sized businesses can grow equivalent to their competitive counterparts.
Stand out from the pack:
Competitive intelligence is crucial for companies to thrive in today’s highly competitive marketplace as it helps businesses to understand what to do and what not to do. Knowing what not to do enables a company to stand out from the crowd. Also, being disruptive does not mean that you are successful. Therefore, companies should be very clear about what they want to achieve in their niche.
Summary
According to estimates, 52% of businesses using CI have witnessed an increase in revenue (2020 State of CI Report).
Though competitive intelligence is important for companies, it is not the only factor that drives a company’s growth and success. Other factors such as business intelligence and market intelligence also play a critical role in helping businesses gain a competitive advantage. Therefore, spending too much time in extract competitive intelligence can also have a countereffect and lead to waste of time, money, resources, and energy.
