Competitive intelligence is more than just simply knowing your enemy competitors. We define competitive intelligence as the act of collecting and analysing information about competitors, customers, products and the marketplace to form an accurate business strategy. It means you learn as much as you can as soon as possible so you can boost your business’ competitiveness and success.
We like to relate it to a quote from Chapter Three of Sun Tzu’s Art of War:
“It is said that if you know your enemies and know yourself, you will not be imperilled in a hundred battles.”
At Blackhawk, we can assist you in knowing your enemies and yourself so you can create a reliable and accurate business strategy.
What it entails
As a business, the competitive intelligence reports you receive will typically be tailored to focus on specific competitors. They may utilise corporate intelligence to profile your business, in order to make an accurate comparison. However, they can also follow a model known as Porter’s five forces, which are the five competitive forces that play a part in shaping every industry and market in the world. These are:
- Competition in the industry – This details the number of competitors and their ability to threaten the company. More competition means the company must consider how to remain competitive, giving it less leeway to do what it wants to achieve higher sales and profits.
- Potential of new entrants into the industry – This looks at the entry barrier to newcomers within the market. The less time and money it takes for someone to enter the market and get to a level where they are an effective competitor, the more at risk the company is of losing market share.
- Power of suppliers – This force addresses how easily suppliers can drive up the price of goods and services. It is mainly affected by how reliant a company is on a particular supplier: if there are plenty of alternatives then the supplier must remain competitive, but if it is impractical or too expensive to switch then the supplier is free to drive up their prices.
- Power of customers – This looks at the ability of customers to drive prices down. It is mainly driven by the customer base; how significant they are and how likely they will be to switch to another company.
- Threat of substitute products – Sometimes competitor substitutes can be used in place of a company’s product or service. If the substitute achieves the same end but at a lower cost or in an easier way, it will slowly move customers away from your product or service.
Though Porter’s forces are more often used in generalised market research, they are a good way of ranking how powerful a competitor is due to their application to any competitive market in existence.
Why use it?
Put simply, competitive intelligence is a way of evaluating your position in the market and figuring out ways of strengthening or reinforcing it. The information is most commonly used to create long-term business plans, incorporating what parts of the business are considered to be weak and working on improving them. It can also be used to evaluate which business ventures are riskier than others, similar to the due diligence checks we provide if your business venture was to merge with another company.
There is a thin line between competitive intelligence and corporate espionage. Corporate espionage is defined as collecting information using illegal, unethical methods, such as hacking into a company’s records or bribing members of their staff for confidential information. Competitive intelligence on the other hand always uses ethical methods to gather information, and the information itself will always be public.
Legitimate information sources can include:
- Company websites – These will often contain plenty of information, at the very least detailing their products and who they are marketing to.
- Company press releases – These are a quick way to find information on new products, staff, or news of any upcoming expansions.
- Social media postings – These can be indicative of the company’s marketing strengths. Sometimes they can also share information related to a product or service that hasn’t yet been introduced.
- Online job postings – The types and number of open positions could indicate efforts to staff up for a new product or category development.
- Companies house – An online service, this allows you to look up public records about a company, including previous names, insolvency information and current and resigned officers.
Blackhawk can help
Competitive intelligence is meaningless without the ability to interpret and translate it into useful data. Not only can we help to gather this data but we’ll work with you to shape it into a business strategy to help you going forward. Our reports are accurate and succinct, letting you make informed decisions about your business’ future.