How do you gather competitive intelligence?
Market research and competitive intelligence are two linked, but slightly different, concepts. Both provide information to help you understand more about your market, and make the right decisions for your company. Show Understanding the market, including both your customers and your competitors, is vital to success in business, and feeds into a wide range of strategic analysis tools, including Porter’s Five Forces and PESTLE analysis. This page provides definitions of competitive intelligence and market research, and then offers some techniques that you may find useful in gathering information to support your strategic and tactical decisions about your products, markets, and ongoing operations. Competitive Intelligence vs. Market ResearchThere is no single, agreed definition of either competitive intelligence or market research. Some sources suggest that market research is a subset of competitive intelligence, and others that the reverse is true, or even that the two are the same. Broadly speaking, the term ‘market research’ seems to have been around longer. More recently, it has evolved or developed into ‘competitive intelligence’ or ‘market intelligence’, probably to reflect the broader range of activities used to gather information, and because information sought includes more about competitors as well as customers. It is generally agreed that market/competitive intelligence:
A thought on information quality and quantityConsider Porter’s Five Forces. Using it for analysis requires information about your suppliers and customers, your competitors, and possible changes in the future, including new substitutes for your product or service, and new entrants to the market: effectively, competitive intelligence. Your analysis will be better with more information (within limits). BUT… the information must be accurate. The Information Funnel The process of gathering information can be considered as a funnel.
Further Reading from Skills You Need The Skills You Need Guide to Business Strategy and Analysis Based on our popular management and analysis content the Skills You Need Guide to Business Strategy and Analysis is a straightforward and practical guide to business analysis. This eBook is designed to give you the skills to help you understand your business, your market and your competitors. It will help you understand why business analysis is important for strategy—and then enable you to use analytical tools effectively to position your business. Possible Sources of InformationThere is a wide range of information sources that you can use to find out about your competitors, market, and industry. These include:
Ethical practice and competitive intelligence Competitive intelligence is NOT industrial espionage. It is an ethical and reasonable business practice. However, this does mean that you need to avoid any unethical practices when gathering your information. For example, do not be tempted to phone your competitors and pretend to be a potential customer to gain more information about their prices. Equally, you need to avoid any possible accusations of collusion because you have shared your prices with competitors, in exchange for information about theirs. The next stepGathering information in an important step but, on its own, it is not enough. You then have to assess its quality, and decide how you are going to use it in decision-making. Finally, you have to take action as a result. |