One of the key questions in the business planning process is determining what’s happening in your market. Trying to determine who your real competition is and what their strengths and weaknesses are can be a real challenge. Where you stack-up against your competition will be a key to your success in the market. Competitive intelligence is the process of defining, gathering and distributing information about the products, services, customers, strategies and capabilities of your customers and the market environment in which you operate. Once collected, this information must be compiled and presented to management to make strategic dedicions for your organization. Just collecting the information isn’t enough. If you file the data away in a folder on the server or in a file drawer never to see the light of day, you’ve wasted your time and efforts. The information is only valuable when used as a tool to better manage your own organizations strategic efforts.
Competitive intelligence is about comparing your company to that of your competitors. You are trying to collect actionable data that identifies risks and opportunities before they become common knowledge. Positioning your company to act first or react quicker to changing market conditions may be the edge you need to succeed. Keep in mind that some of the information you gather may not be true. Just because you find something in print on the internet, does not mean it’s factual. Evaluate the source of the data and don’t let your group chase a single piece of bad data down a path or no return.
Competititve intelligence has been used by the largest companys for many years. It’s thought to be an expensive proposition not available for small business and startups. In fact, I teach C.I. to every would-be entrepreneur and startup class, we just call it by another name; market research. So exactly what should a startup or small business look for in the way of market research or C.I.?
Define Yourself – Before you can realistically hope to gleen information about your competitors and their strategic operations, you need to understand your own goals and objectives in the market. Have a well defined business model with goals and financial projections. If you don’t have a baseline on yourself, how will you know what kind of information to collect and what will you measure against?
Define the Who – Which competitors are really directly involved in your market? Which indirect ones pose a real threat to your plan? Pick a small group of competitors to watch. You can only watch a limited number of competitors, so pick carefully. And don’t spend all your efforts on the largest competitors and miss the new startups that may take your industry by storm.
Define the What – Determine on what to focus your intelligence gathering efforts; goals, management team members, growth objectives and direction, available resources, technological advances. You can’t watch everything. Most companies focus on strategic and capability oriented activities. Most information is just noise. Focus your attention on the few things that really matter in your industry. The data you collect must be useful to your management team in making strategic decisions for your company. If the information is not actionable, it’s not going to be very useful.
Define the How – The growing on-line world makes much of the data gathering effort easier than ever before. Using news services to search for articles and news releases that contain certain keywords can automate the process. Fee providers like Dunn and Bradstreet, or First Call collect data on physical location, management, history and financial performance. Other data sources can typically be accessed from your larger public libraries or university libraries which carry subscriptions to fee based databases and services. Discussion groups and message boards will entertain discussions about every topic you can think of relative to a company’s products, service and customer service habits. While you have to take some of this data with a grain of salt, the boards will serve as an indication of how they operate and respond to customer compalints.
And then there’s the old-fashioned method of actually talking to people. Networking and industry trade associations and trade shows can be an excellent source of the most current information. Companies tend to send their best people to trade association meetings and shows to speak. In addition, the job boards will reveal the kinds of talent a company needs or holes in their organization that must be filled in order to head out in a new direction. Good talent is hard to find so companies must be aggressive in touting their vacancies and needs. Some reading between the lines will be very useful for analyzing a growing company.
Define the Process – Who will collect the data? Where will you store the information? Which employees and departments can access and add to the database? Most importantly, how will you use the information to better manage your own business? The data should be used to further your understanding of the competitive landscape and to drive strategic action. Collecting data just to fill a database is a waste of time. Have a plan for management to regularly review the information. Change what you collect and how you collect it over time to fine tune the kind of information that your management needs to make strategic decisions.
Business moves a breakneck speed and a nimble company can change direction on a dime. How will you respond and more importantly, how long will it take you to figure out what they’ve done? While this type of information is especially important in the business planning stage as you try to determine the feasibility of a business model, don’t forget to keep at it once you’re in business. The business world doesn’t stop once your business gets it initial funding.
