competitive-intelligence

What Is Competitive Intelligence? Competitive Intelligence In A Nutshell

Competitive intelligence is the systematic collection of information by a company on its industry, business environment, competitors, products, and consumers. Insights are then used to help the company develop its strategy or improve its competitive position. Competitive intelligence can be assessed according to seven elements: sector intelligence, market intelligence, competitive intelligence, innovation intelligence, sales intelligence, procurement & supply chain intelligence, and Environmental, social, & governance (ESG) intelligence.

Understanding competitive intelligence

Today, the rate of competition and market disruption is cause for concern for many businesses. According to research by Accenture, 63% of companies are currently experiencing disruption with 44% of those companies highly susceptible to the phenomena. 

Competitive intelligence helps a business secure and maintain a competitive advantage by developing a core strategy based on data-backed predictions. In other words, the business uses competitive intelligence to capture, analyze, and then act on information related to their particular competitive landscape. This information can be gleaned from the market, competitors, products, supply chain, industry, and target audience. 

Perhaps unsurprisingly, there are many benefits to developing strategies based on competitive intelligence. These strategies enable businesses to:

  • Identify industry trends or competitive threats ahead of time.
  • Better analyze their strengths and weaknesses. 
  • Allocate resources more efficiently. 
  • Maximize their return on investment (ROI), and
  • Improve product development and product launching.

The seven elements of competitive intelligence

The seven elements of competitive intelligence help remind businesses that there is more to the approach than simply analyzing its competitors.

To develop a broad, holistic strategy, each business should consider the following seven elements of intelligence:

Sector intelligence

external-economies-of-scale
External economies of scale describe factors beyond the control of a company that are present in the same industry and that lead to cost benefits. These factors may be positive or negative industry or economic trends. External economies of scale, therefore, are business-enhancing factors occurring outside a company but within the same industry.

Sectors are large groups of companies with similar primary business activities such as finance, healthcare, and communications. Sector intelligence evaluates large-scale economic trends and fluctuations.

Market intelligence

comparable-company-analysis
A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

As the name suggests, market intelligence pertains to information about the market the business operates in. Market intelligence can strengthen market positioning and clarify competitors, customers, growth opportunities, and current or future problems. Since most markets are dynamic, the business needs to prioritize the regular collection of market intelligence to remain competitive.

Competitive intelligence

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

Which is focused on the movements and decisions of competitors in a given industry. How is the competitor negotiating sales deals or developing products? What are the key takeaways from their marketing campaigns?

Innovation intelligence

innovation-funnel
An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Businesses need to innovate without overextending themselves and diluting their brand. Disruptive businesses need to find gaps in a market where innovation is likely to be commercially viable.

Sales intelligence

sales-cycle
A sales cycle is the process that your company takes to sell your services and products. In simple words, it’s a series of steps that your sales reps need to go through with prospects that lead up to a closed sale.

This is a form of data-backed intelligence where sales teams create customer profiles, generate leads, and close accounts. Sales intelligence encourages businesses to monitor the market for certain triggers which indicate that a customer is ready to buy.

Procurement and supply chain intelligence

supply-chain
The supply chain is the set of steps between the sourcing, manufacturing, distribution of a product up to the steps it takes to reach the final customer. It’s the set of step it takes to bring a product from raw material (for physical products) to final customers and how companies manage those processes.

This type of collective intelligence gives the business insight into supply and demand figures, production costs, storage costs, regulatory and taxation costs, material supply intelligence, and competitive sales prices. Essentially, procurement and supply chain intelligence details the required rate of production based on demand.

Environmental, social, and governance (ESG) intelligence

esg-criteria
Environmental, social, and governance (ESG) criteria comprise a set of standards socially responsible investors use to evaluate a company based on three main criteria: environmental, social, and corporate governance. Combined they help assess the social responsibility effort of companies in the marketplace.

ESG intelligence tracks the environmental footprint of a business and details the sustainability measures introduced by competitors. ESG also encompasses social welfare and humanitarian initiatives and the relationships between organizations and national and foreign governments. As consumer awareness around ESG principles increases, organizations must incorporate them into their strategies to remain competitive.

Key takeaways:

  • Competitive intelligence is the collection of information by a company on its industry, business environment, competitors, products, and consumers. Insights are used to help the company develop its strategy or improve its competitive position.
  • Strategies based on competitive intelligence help a business improve product development, identify industry trends or competitive threats ahead of time, and maximize return on investment.
  • The seven elements of competitive intelligence remind businesses that there is more to the approach than simply analyzing competitors. Intelligence must also be considered from a sector, market, innovation, sales, procurement, and ESG perspective.

Main Free Guides:

Technological Modeling

technological-modeling
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Business Model Wheel

business-model-wheel
A business model wheel provides a structured approach to defining a business model. Each model wheel is broken down into three core components: offering, monetization and sustainability. Each component in turn contributes to a total of eight areas that make up an ideal business model.

Tech Business Model Framework

business-model-template
A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Blockchain Business Models Framework

vbde-framework
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Value and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.

Connected Analysis Frameworks

Cynefin Framework

cynefin-framework
The Cynefin Framework gives context to decision making and problem-solving by providing context and guiding an appropriate response. The five domains of the Cynefin Framework comprise obvious, complicated, complex, chaotic domains and disorder if a domain has not been determined at all.

SWOT Analysis

swot-analysis
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

Personal SWOT Analysis

personal-swot-analysis
The SWOT analysis is commonly used as a strategic planning tool in business. However, it is also well suited for personal use in addressing a specific goal or problem. A personal SWOT analysis helps individuals identify their strengths, weaknesses, opportunities, and threats.

Pareto Analysis

pareto-principle-pareto-analysis
The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Failure Mode And Effects Analysis

failure-mode-and-effects-analysis
A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Blindspot Analysis

blindspot-analysis
A Blindspot Analysis is a means of unearthing incorrect or outdated assumptions that can harm decision making in an organization. The term “blindspot analysis” was first coined by American economist Michael Porter. Porter argued that in business, outdated ideas or strategies had the potential to stifle modern ideas and prevent them from succeeding. Furthermore, decisions a business thought were made with care caused projects to fail because major factors had not been duly considered.

Comparable Company Analysis

comparable-company-analysis
A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

Cost-Benefit Analysis

cost-benefit-analysis
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

Agile Business Analysis

agile-business-analysis
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

SOAR Analysis

soar-analysis
A SOAR analysis is a technique that helps businesses at a strategic planning level to: Focus on what they are doing right. Determine which skills could be enhanced. Understand the desires and motivations of their stakeholders.

STEEPLE Analysis

steeple-analysis
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Pestel Analysis

pestel-analysis
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

DESTEP Analysis

destep-analysis
A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

Paired Comparison Analysis

paired-comparison-analysis
A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

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