Competitive Intelligence Unveiled: Your Roadmap to Strategic Management Success
Competitive intelligence is analyzing competitor data, industry trends, and marketing dynamics that contribute to your competitive advantage and overall business growth. If done correctly, competitive intelligence can have a significant impact on the success of the strategic management at your business. That’s why organizations need an effective competitive intelligence strategy. Discover below why competitive intelligence is so important for strategic management and the steps you can take to implement it successfully.
The Role of Competitive Intelligence in Strategic Management
What is competitive intelligence? Contrary to how it may feel to business leaders and marketing teams, competitive intelligence isn’t corporate espionage. Companies aren’t spying on their competitors to sabotage them. Rather, businesses are looking at their competitors’ current activities and behaviors to make inferences about their plans. It’s gathering market intelligence to predict trends and challenges that are likely to occur and developing solutions before they arise.
Competitive intelligence is more transparent than spying or snooping and it proves incredibly valuable for strategic management. Consider the following benefits that underscore the importance of competitive intelligence:
- Reduces time spent with strategic planning: Understanding how a competitor intends to move can help direct messaging, marketing, and other key tasks, saving time on planning.
- Provides a better understanding of the market: When a company compares itself to like organizations within its industry, it can better evaluate the efficacy of its marketing strategies, operational methods, and more to spot areas for improvement.
- Eliminates guesswork to promote strategic decision-making: A sound competitive intelligence strategy allows businesses to move beyond assumptions about business decisions and rely on data to inform their direction.
- Reveals how to interact with your target audience: Look at how your competitors’ customers interact with the brand. For example, does the brand attract more attention on Facebook, Instagram, or LinkedIn? This information helps you determine where to spend the most time and resources.
Competitive Intelligence Examples
Competitive intelligence is categorized into two major groups — strategic and tactical. Strategic competitive intelligence focuses on overcoming long-term challenges, such as technological advancements, economic conditions, and ecological issues. It also comprises the new opportunities and potential risks a company faces. Tactical competitive intelligence concentrates on short-term concerns, like boosting revenue and market share. These are objectives that leaders can easily measure by looking at quarterly reports.
Another way to distinguish between types of competitive intelligence is how a business approaches them. In most cases, organizations leverage competitor intelligence to confirm if a decision they intend to make is the right one. The goal is to ensure they don’t follow through with a bad decision, but it doesn’t necessarily encourage better decision-making. The other method is using competitive intelligence proactively to make changes before or at the same time as competitors. The following examples show how this approach to competitive intelligence may play out:
- Review a competitor’s homepage or mission and values pages for shifts in market positioning. What do these changes imply about customer perceptions and concerns? Revise your positioning and messaging to reflect these trends.
- A competitor undergoes leadership changes — they just hired a new Chief Marketing Officer. In collaboration with the marketing team, consider how this will affect your company’s campaigns. If the competitor offers a blog or similar content showcasing the new hire, analyze it to get a feel for their plans. What resources will your marketing team need to match these efforts?
- Logos are supposed to be an easily recognizable symbol encapsulating what the business represents, so if a competitor changes theirs, a big development is on the horizon. Close monitoring of a competitor’s website can reveal subtle changes to logos, which often suggest breaking into a new market segment.
Key Steps to Implementing an Effective Competitive Intelligence Strategy
Competitive analysis can be challenging because data is everywhere. Companies collect insights from websites, social media pages, market share data, and more, and they may need to consider numerous competitors to make accurate conclusions. Therefore, a robust competitive intelligence strategy is essential. These steps will help you make the most of competitor analysis.
Define Your Strategy
What’s the framework for your strategy? As with any business strategy, competitive intelligence programs should always agree with organizational objectives. Business leaders should collaborate with competitive intelligence professionals to ensure their efforts support overarching corporate strategy and align with brand values. This step can alleviate any concerns from executives about the ethical implications and strategic value of competitor analysis.
Identify Key Competitors
There may be many businesses that qualify as a competitor, but you don’t need to consider them all. How do you prioritize competitors? Turn to your customer relationship management (CRM) data. CRM information reveals the competitors whose successes have prevented you from experiencing wins. From here, you can begin evaluating the strengths and weaknesses of competitors’ strategies to improve yours.
Establish Sources of Competitive Intelligence
Once you’ve determined which competitors to research, you can begin harvesting intelligence. There are multiple sources excellent for gathering competitor information, including:
- Social media: On social media, customers do the hard part for you. Compare comments about your offerings with the products and services of your competitors. This can reveal where you’re excelling and where you’re falling behind.
- Competitor websites: These websites are not only a wellspring of information about competitor’s products and services, but also provide the most updated knowledge about the brand.
- Customer reviews: Whether on competitor websites, social media, or third-party review sites, customer reviews show what competitors do that please their audiences. They also indicate which types of products generate the most interest.
- Press releases: These statements are often centered on new products, helping leaders understand which features and target audiences competitors are prioritizing.
- Search engine optimization (SEO): SEO tools help you understand how much keywords contribute to a competitor’s online traffic, as well as how their rankings how changed over certain periods. This information will affect your SEO efforts.
- Online job postings: Competitors hiring more workers are likely growing, and the kind of talent they’re searching for can reveal shifts in their business strategy.
- Specialized competitive intelligence tools: Beyond these sources, business leaders and competitive intelligence professionals can explore tools created specifically for competitive analysis.
Conduct Market Research
In addition to looking at competitors’ assets, you can do a deep dive into the market to extract key insights. The main purpose of market analysis is to better understand industry trends and customer behaviors, but it can also reveal your market share compared to that of your competitors.
Consult Your Stakeholders
Competitor wins happen with more than customer service. For instance, their employee benefits may be drawing in the talent you hope to recruit, or how they handle partnerships is attracting the best suppliers.
For this reason, communicating with your various stakeholders, from customers and employees to suppliers and investors, makes a difference. Knowing what these groups most admire about competitors can help you make the changes necessary to improve satisfaction on multiple fronts.
Understand Competitor Wins
What’s difficult with measuring how your business fares compared to competitors is that data analysis is often quantitative. In other words, you recognize that your company fell short with a marketing campaign or product launch, but not why this occurred. Through consulting with leaders and employees, scouring CRM data, and communicating with new customers, competitive intelligence specialists can uncover the why behind these losses.
Design a Competitive Battlecard
Once you’re confident in the data you’ve collected on a competitor, you can create a battlecard. Battlecards are helpful for sales teams when delivering pitches to potential clients. These visualizations compare your business with a competitor, highlighting key information like their products and services, specifications, pricing, and important statistics. Sales representatives can leverage these concise documents to respond to objections from prospective customers, increasing the likelihood of closing the deal.
Other Considerations for Competitive Analysis
In addition to these steps, business leaders can take other actions to ensure they maintain a strong competitive intelligence strategy. These techniques include:
Competitive Benchmarking and Analysis
Competitive benchmarking helps businesses keep a competitive edge within the industry by showing them how they stack up against the competition. It involves comparing your products and services, as well as performance metrics, against the activities of these brands.
Whereas competitive analysis gives you the ability to investigate as much as necessary about a competitor to make an informed inference, benchmarking allows you to monitor their trajectory and long-term strategies. Through it, you can recognize areas for improvement and opportunities to differentiate your brand. It can also help define strategic positioning and value proposition.
Predictive Analysis and Scenario Planning
Alongside historical data and technologies like machine learning, competitive intelligence is a valuable tool for predictive analysis. As it sounds, predictive analysis is a strategy that helps companies with strategic planning by forecasting possible future outcomes. With a sound competitive intelligence program, business leaders are better equipped to anticipate how competitors will behave following industry developments and other widespread changes. They can also envision different scenarios that may occur and predict competitors’ reactions, ultimately making more well-informed strategic decisions for their businesses.
Competitive Intelligence Implementation and Communication
A competitive intelligence strategy can feel abstract, and executive teams may ponder how to transform data into meaningful insights and share them with stakeholders. An effective solution for communicating findings internally is a competitive intelligence platform. Here, internal teams can share their observations about competitors and evidence for these assessments. These platforms provide a great opportunity for executives to inquire for more context about key insights, as well.
The internal messaging channel enables ongoing competitive intelligence, but a resource is needed for compiling this information into a coherent compilation of ideas. A competitive intelligence newsletter serves as a more formal, periodic update of all competitive intelligence efforts. It features the most valuable intel prominently and explains why these insights are so important. Business leaders may also consider making these newsletters more engaging with visualizations and a sleek design.
Measuring the Impact of Competitive Intelligence
Competitive intelligence provides insights that have implications for the entire business. This means there’s no one statistic for measuring its success. Instead, executives and competitive intelligence professionals must use a range of metrics to gain a concrete grasp on the impact of their strategy. Key performance indicators of competitive intelligence include:
- Revenue impact: Compares the profits made when leveraging competitive intelligence versus those generated without this knowledge
- Win rate: Calculates the average rate of wins by dividing deals won by total deals offered within a set timeframe
- Competitive win rate: Builds on the win rate metric to compare these values against competitors to determine success in beating certain competitors and which competitors to direct the most attention
- Competitive content adoption: Indicates which sources of competitive intelligence are most effective by analyzing which are used most often for strategic planning
- Return on investment (ROI): Demonstrates the dollar-value worth of a competitive intelligence program and provides an estimated timeline for how long it will take for the program to yield returns
- Average deal length: Reveals if deals are closing faster due to the competitive intelligence strategy
- Average deal size: Illustrates whether or not the business is securing bigger deals because of data gleaned from competitive intelligence
- Competitive displacement: Gauges the number of instances where a prospective customer switched from a competitor’s products or service to yours
- Competitive confidence: Shows how much confidence team members who most utilize competitive intelligence have in the data
Enhance Your Competitive Intelligence Strategy With Spider Impact
A robust competitive intelligence framework reinforces your strategic management processes so you can maintain an advantage in your industry. By ensuring your competitive intelligence strategy is built from of the right components (and establishing the right KPIs to measure it) your organization is more likely to realize success with strategic management.
When you implement a competitive intelligence program, you’ll want to ensure to monitor its performance to maximize its benefits. At Spider Strategies, we offer a strategy and performance management platform called Spider Impact. With Spider Impact, organizations like yours gain a range of software tools to promote company-wide coordination with strategic goals, including business intelligence software. This software helps you better manage intelligence for decision-making and features resources to guide these efforts, such as data visualizations and reporting tools.
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