Competitive Intelligence

Tactical, Operational & Strategic Analysis of Markets, Competitors & Industries

One of my colleagues was on an introduction call recently with a potential new client (a major health insurer), and the responses from them were surprising - shockingly so. Their message was this, "We don't look at our competitors. We look at market trends, and react to those."

My first thought was that we were speaking to the wrong group, but they self identified as the CI function, included a person titled "Director of CI and Market Research", and claimed to be responsible for all research related requests... but that no one at the company ever asked them to look at Competitors.

Now granted, I work in a CI consulting role, so my perspective is skewed by the fact that people who come to me interested in looking at their competitors, but am I missing something here?

Why would a company NOT be interested in having a better understanding of their competition?
For those of you working in an internal CI function, do you see this lack of interest in competitors from your senior leadership also?

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With all due respect Seena, I have to take serious issue with your point of view (POV) as a successful Senior Strategic Intelligence analyst and Director of CI in the high tech arena (Fortune 10/Global 150). From the tone of your response, I would tend to surmise your background is Market Research not CI, as this is a POV frequently espoused by MI/MR folks who do not understand CI and don't provide CI.

Anyway, allow me to provide you a pertinent example to illustrate why focusing on customers is not more important when it comes to driving innovation and accordingly business growth, new job creation.

Henry Ford said it best with regard to the car-"If I asked my customers what they want, they simply would have said a faster horse." The point here is thus- customers do not anticipate/drive major technological changes, they don't know what is technically possible, at best, they spur minor improvements.

Secondly, you forget the nature of competitive advantages which is where Ken Sawka's point comes into play-one of your competitors just might be able to better serve customers than your company can.Still going to ignore your competitors? Do so at your own risk. No one is going to put you out of business other than your competitors...

Thirdly, who do you think influences market and industry directions to the greatest degree? Smart competitors that's who, a lot more than customers ever will. I could provide numerous examples of this from the industries I have covered. What ends up happening is a competitor often ends up setting the tone for the market and customer expectations because they are good at x,y,z -and they do so to their advantage. Xerox is a very good example of this in the high end digital color POD market.

Fourth, with regard to substitutes....looking at the current market place does not do the trick in anticipating technological change. If I was just looking at the existing market if you will, and not at new IP incubation that might supplant my IP that is the labs of noncompeting firms, patent shifts in certain IPCs by a broad array of companies some of which might not be in the current market today, etc I would miss the boat. HUMINT gathering also helps here. When one is talking about IP substitution/supplementation no, looking at the current market in the vein that MR folks do fails every time. I've never seen MR folks provide SEWS on subs/supp but CI does frequently.

Fifth, no CI is not just about trying to find out things other companies don't know. It's about understanding your competitors so as to outmaneuver them and capitalize on their weaknesses or negate their competitive advantages as well as some of the other elements mentioned above.

Monica Nixon
I really must support Seena on this point. There is a great deal of confusion about the difference between competitive and competitor intelligence. In my glossary, I define competitive intelligence as follows: Competitive intelligence is a systematic and ethical programme for gathering, analysing, and managing any combination of data, information, and knowledge concerning the business environment in which a company operates that, when acted upon, will confer a significant competitive advantage or enable sound decisions to be made. And the business environment as: encompassing all those factors that affect a company's operations; including customers, competitors, suppliers, distributors, industry trends, substitutes, regulations, government activities, the economy, demographics, social and cultural factors, innovations, and technological developments.
But the most important factor is CHANGE. If it ain't changing it's hardly worth bothering about, and if it is, you need to know, and you need to act.
Kind regards,
Vernon Prior
Shouldn't CI ideally be used to help your company (or client company) understand how the competitor is going to react or drive customer behavior? Presumeably, both you and your competitors are doing market research with consumers to understand their needs, wants, desires, and responses to your new products. A company doesn't need a CI function to figure that out, they need CI folks to figure out what their competitors are doing with the same information. How are they going to offer your customers something to get them to switch? How are they going to offer your suppliers, your distributors, etc... something to get them to promote and use more of their product?

CI should be a support function that helps your company prevail over the competition through understanding how your compeition will "differentiate" themselves and what you can do to stop them or "differentiate" yourself from them.


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