Competitive Intelligence

Description of Competitive Intelligence. Explanation.

Definition Competitive Intelligence. Description.

Competitive Intelligence is the selection, collection, interpretation and distribution of strategic information regarding the competitive environment in which a firm operates. It is the analytical process that transforms disaggregated competitor intelligence into relevant, accurate and usable strategic knowledge about competitors, position, performance, capabilities and intentions

Having reliable information available is crucial for describing the market in which a firm operates, analyzing the competition, forecasting future developments, adjusting to changing market circumstances.

Typically, the information is gathered from current and former employees or customers of the competitors, suppliers, shareholder meetings, annual reports, industry associations, journals, magazines, websites, research studies, and from specialized providers.

Analysis of Competition

To achieve a competitive advantage, by definition you must know what your competitors are currently doing and what they will be doing in the future.

Indications of what are the competitors plans may be obtained in the following ways:

Comparison of objectives of competitor with their currents results. A difference between desired and achieved market share leads to an expected growth strategy.
Application of a portfolio analysis to the competitor. If a competitor uses a portfolio analysis, the company can perform its own analysis and deduce the competitors most logical portfolio decision.
Determining the importance of a product for the competitor.
Studying the competitor's use of the marketing mix over time. For example, if a competitor reduces prices and on the other hand increase its advertising expenses this may indicate that the company is pursuing growth.

Competitive Intelligence Forum (6)

Strategic, Competitive and Business Intelligence
"During my course Advanced Strategic Management at the University of South Africa (UNISA), I learned that in order for organizations to come to their strategic decisions, they have to practice their strategic intelligence systems and then come the process of the actual strategic decision making.
Organizations have to conduct what is called Competitive Intelligence (CI), where they scan their external environment for the information they need for the support of their decision.
Then Business Intelligence (BI), extracting information, some of which was gathered on CI and disseminating the information organization-wide including to the strategists. In a good format.
And finally Knowledge Management (KM), which is where the information is transformed into knowledge and distilled to be skills of individuals important for the decision making."

What is Competitive Intelligence? Definitions
"Definitions of competitive intelligence:
- CI is the collection and analysis of information regarding the capabilities, vulnerabilities, and intentions of business competitors, conducted by using information databases and other "open sources", through ethical, legal inquiries."

Creating a Simple Marketing Information System
"Does anybody have experience to set up a "low profile" marketing information system? Me is given the challenge to build up such a system without spending on new software.
The question is: how to translate market info into knowledge. We make use of market research reports, clippings from the www, have info from sales etc."

Collection Phase in Competitive Intelligence
"Collection phase in competitive intelligence:
1. Passive intelligence - osint
2. Semi active intelligence - elicitation through telephone and email
3. Active intelligence - humint."

Conditions for Competitive Intelligence
"It's crucial to:
- Have top-management's full support
- Define the system based upon company strategy
- Assure that all the resources are secured
- CI must be running round-the-clock."

Data Gathering Methods for Competitive Intelligence
"I would add to the list of data gathering methods:
1) mystery shopping with all its aspects
2) test customer panel."

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