Learn how competitive intelligence can help to boost your business’ competitiveness and success.
Competitive intelligence is the process of gathering and analysing information pertaining to your competitor’s overall governance, as well as their finances, goals, strengths, weaknesses, and the intricate relationships between their products and customers.
The main objective of gathering competitive intelligence is to use the information to create a series of actionable business strategies, ones that allow you to respond swiftly to the changing business environment, help to improve products, and increase market share. Ultimately, all the operational and tactical strategies you apply as a result of competitive intelligence should lead to better profitability.
In some cases, competitive intelligence is part of the mergers and acquisitions process where business leaders and company directors choose to rely on intelligence-led data to increase the chances of success when they incorporate mergers or acquisitions into their growths strategy.
At Blackhawk Intelligence, our corporate intelligence experts like to relate competitive intelligence to a quote from Chapter Three of Sun Tzu’s Art of War: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” So let’s kick-start the discussion by mentioning Porter’s Five Forces and how our intelligence experts can help.
Porter’s Five Forces
When discussing competitive intelligence, the works of Professor Michael Porter of Harvard Business School and his famous ‘Five Forces’ often swiftly mentioned. Essentially, this is about how business leaders can apply the five key forces to the external business landscape and assess the level of competition surrounding one’s business. The five forces are as follows:
1. Threat of new entrants
This looks at the entry barrier to newcomers within the market. If it is easy for a company to enter the market and become a fierce competitor, then you must build effective barriers to safeguard your position. A common strategy you can use to counter new entrants is to introduce new products or services.
2. Threat of substitutes
Product innovations allow other companies to provide alternative options to your customers. If the substitutes are cheaper or are better at meeting the demands of customers, then they will threaten your profitability. Focusing on value rather than price is often an effective strategy to counter substitutions.
3. Bargaining power of suppliers
This is about the choice of suppliers available to you. If you are reliant on a particular supplier and you cannot find an alternative, then the balance of power is tipped towards the supplier.
Common strategies you can use to keep the balance of power in check include having multiple suppliers or choose to work with a selective list of suppliers whose business depends upon the success of your company.
4. Bargaining power of buyers
This looks at the ability of customers to drive prices down when supply is greater than demand. Building a large customer base and launching innovate products can help your company to maintain control of prices.
The intensity of rivalry among existing competitors within an industry will determine how attractive the landscape is. If rivalry is high and intense, expect aggressive marketing tactics and price wars.
Building a sustainable differentiation is an ideal counter-strategy. Increasingly though, some competitors also choose to collaborate instead of contesting with one another.
Blackhawk Intelligence can help companies to gather competitive intelligence
Porter’s Five Forces are sound theories that have helped countless companies, but they aren’t silver bullets. Meaningful competitive intelligence actually requires the corporate intelligence experts at Blackhawk Intelligence to delve deeper.
For a start, we help our clients to determine key business issues that need addressing. Then we have a team of experts with a wealth of expertise and a network of excellent contacts to research, investigate and gather intelligence. We then pass the information to our analysts who will use a suite of tools to interpret and translate the data into useful information, including assessment of potential implications.
Our final report to you will give your management team a clear picture of what is affecting the profitability and how you can sustain competitive advantages by making a series of tactical and operational decisions.
Intelligence is the core function at Blackhawk Intelligence. For many years, we have helped companies across the UK, Europe, Middle East and around the globe to understand how the world is changing, as well as how to seize opportunities and manage risks associating with a changing world.
To find out how we can help your company in the competitive intelligence process, give us a call on +44 (0)20 8108 9317 or fill out our Online Form.
If you found this interesting, take a look at:
- How can manufacturers minimise stock losses?
- A useful guide to internal corporate investigation
- How well-informed are your business decisions?
This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.