When businesses have complex decisions to make, it’s vital that they make those decisions on as large as evidence base as possible. When considering implementing big changes, leaders need to know that they have as much information as possible at their fingertips.
Their biggest tool in the 21st century is data analysis, the science of sourcing, collating and tabulating data points on as large a scale as possible. This enables successful companies to spot trends, present evidence-backed arguments and reassure themselves and corporate stakeholders that, although not infallible, their decision-making is at least highly rational.
“Information is the oil of the 21st century, and analytics is the combustion engine.”
- Peter Sondergaard, SVP and Global Head of Research at Gartner, Inc. [source: career foundry]
This quote from a senior executive at leading market research firm Gartner characterizes data analytics as the combinatory process which takes the raw material of information (data) and shapes it into something useful (analysis). Of course, there are many different kinds of analysis “combustion engines”, to extend the metaphor, each enquiring into a different data pool.
Competitive Intelligence
One such realm of data analysis is competitive intelligence (CI). This is a blanket term covering all the activities a company carries out to source information on its direct and indirect competitors.
Competitive Intelligence predates big data, however, having first been posited as a technique by Harvard Business School academic Michael Porter in 1980, in his book “Competitive-Strategy: Techniques for Analyzing Industries and Competitors.”
Prior to the big data revolution, companies would obtain information on their competitors by paying attention to trade papers, news stories, hirings and firings, product launches, pricing strategies, and even industrial espionage.
In the 21st century, the vast public availability of data about how a competitor is performing makes covert (and sometimes illegal) means unnecessary. Instead, competitive intelligence draws upon a multiplicity of sources including:
- Trademark and Patent Registrations
- Brand identity and position.
- Consumer demographics.
- Raw sales data or revenue.
- Product launches or revamps.
- Pricing data and trends.
- Industry news and developments.
- Sentiment analysis (customer opinion).
The best competitive intelligence tools are highly targeted to pull in data points that can be filtered to deliver a specialized analysis of an aspect of a competitor’s strategy. This allows the CI user to direct their own corporate strategy towards a lucrative position within even the most competitive of marketplaces.
Understanding Competitive Intelligence Solutions
Put simply, a competitive intelligence solution is a specialized tool that automates the process of intelligence gathering about rival businesses. It usually includes data validation, plus dashboards and reporting tools which organize this data into readable formats.
There are multiple benefits to adopting this approach to competitive intelligence gathering:
- Provides advance warning of market fluctuations within your industry.
- Offers early indication that a rival is about to launch a new product.
- Gives Up-to-date knowledge of all relevant competitors, including new entrants.
- Permits a dynamic pricing strategy that beats your competitors.
- Informs HR departments when seeking to hire from the ranks of rivals.
- Allows competitive market positioning to determine standing against competitors; is your company prestigious, budget, bespoke, etc.?
- Enables large-scale corporate strategy, by providing complete oversight.
Strategic planning is challenging because the future can be surmised but never known. Having as much information as possible at your command means you can project trends forward in time with more confidence.
Competitive Intelligence provides leaders with the validation they need to take bold steps.
Three Examples of Using Competitive Intelligence
- A leisurewear brand is about to launch a new line of running shoes. Competitive Intelligence reveals a gap in the market for minimally cushioned, mid-range shoes available on a subscription service model. The company has the confidence to devise a bold brand campaign and launch their innovative new product.
- A C-Suite vacancy opens unexpectedly within a growing multinational company. Only a few candidates are appropriate for headhunting into the role, and they all work for rival firms. Competitive Intelligence reveals that a couple of candidates have been giving interviews to magazines like HBR and Forbes where they talk about looking for new challenges. HR now has the information they need to pursue those individuals and invite them to interview.
- A business is developing a brand-new electric scooter, using a unique charging technology. Six months before launch, competitive intelligence reveals that a rival has registered a patent for a similar device. The company ensures that their own product does not infringe the patent of their rival, while making several tweaks to differentiate it and achieve stand out.
In all three hypothetical examples, what CI is informing is strategy. And crucially, its insights are valuable throughout the company, from HR, to R&D to marketing and sales.
Types of Data Analyzed with Competitive Intelligence Solutions
What types of data can feed into a competitive intelligence solution?
The data sources are very wide-ranging, but include:
- Market trends and customer behavior.
EXAMPLE: A move towards sustainable packaging, consumers using more e-scooters and electric bicycles, apparel sold on a subscription model.
- Competitor analysis, including market share, product offerings, pricing strategies, and marketing campaigns.
EXAMPLE: The rise of the budget supermarkets in the wake of rising food prices and monetary inflation. Many now use TV ads and offer loyalty cards, both strategies associated with more mid-range providers.
- Sales and revenue data, including product sales, customer segments, and market trends
EXAMPLE: A surprising rise in the sale of skateboards to skaters aged over 30. Amazon’s ability to use dynamic pricing to ensure their products are competitively priced.
- Social media data, including brand mentions, customer sentiment, and industry discussions.
EXAMPLE: A surprising rise in feta cheese sales after a recipe went viral on Tik Tok. An influencer making #ZaraJeans trend, gaining 50 million views, on the same platform.
- Web analytics, including website traffic, user behavior, and search engine optimization.
EXAMPLE: Discovering which rival websites your visitors head to when they abandon your ecommerce platform. These are who your consumers consider your biggest rivals.
- Market research and survey data, including customer feedback, market trends, and customer demographics.
EXAMPLE: SaaS brands scouring G2 and Capterra reviews to find the key weaknesses of rival products, thereby ensuring their own solutions don’t suffer from the same problems.
How to Use Competitive Intelligence Solutions to Make Smarter Decisions
Given the huge potential data pool you could turn your competitive intelligence solution upon, it can be hard to know where to begin. It’s important to work methodically and specifically towards obtaining only the information that’s most valid.
To do so, you can follow this step-by-step process:
- Identify the problem or opportunity.
Since strategy is key, first determine what decision needs to be made and what data might be relevant to that decision. For instance, if you wanted to know whether to expand into the SE Asian market, you might want to look at the sales figures of competitors within that region, as well as customer sentiment on overseas brands. - Gather the data.
Now it’s time to collect the relevant data from internal and external sources using a well-chosen competitive intelligence solution. Take some time to make sure the tool is focused upon appropriate data sources with enough data to discern reliable trends. - Analyze the data.
Use the tools and techniques provided by the competitive intelligence solution to analyze the data. Good CI solutions will first validate the data for you, discarding outliers, wrongly formatted data, glitches, and errors to focus on the highest quality data points. Once this is done, you’ll be able to look at dashboards and reports which help you identify patterns and draw insights. - Interpret the results.
Evaluate the results of the data analysis and interpret the findings in a way that is relevant to the decision. Sometimes a strong signal will not be evident within the data, and it may be important to return to step one and select a different data source. It’s also possible that there simply is no self-evident solution. Data is powerful, but not omnipotent in decision-making. - Communicate the results.
Most good CI solutions provide a range of means to communicate the results of your analysis. These could be sharable dashboards, reports, or bespoke apps. Make sure you select an appropriate group of recipients for your communication since it’s not always wise to have too many voices involved in strategic decision-making. - Make the decision.
Once you have obtained and communicated the relevant insights it’s time to take that strategic decision. By referring to a sufficiently strong signal in the data, you are backing up your decision-making with science, rather than relying upon fallible intuition. - Monitor and evaluate.
If your CI experience proves lucrative, you’ll want to repeat the process with either the same data sources or redefined for a new purpose. You’ll need to monitor the effectiveness of strategic choices made using these methods, to retain confidence in the CI method. You may find you need to rethink the alignment of the problem and analytic approach until you get an effective match between data and the resultant strategy.
Real-Life Examples of Successful Data Analysis with Competitive Intelligence Solutions
Let’s finish by looking at some real-world examples of companies that have used competitive intelligence to their advantage.
Multinational Gas Company uses CI to Identify Potential Market Disruptors
A major gas company had seen a recent upsurge in small energy providers entering the marketplace, a particular challenge in an era of rapid change in the energy sector. Whereas previously they had relied upon the individual insights of key team members, continually accessing those sources was proving a bad use of human resources, and far from infallible.
They sought Evalueserve’s help to devise a CI approach that would scour competitor newsletters and job postings to gain intelligence on market expansion and recruitment. We created an “ask the analyst” tool as a self-service platform that provided in-depth quarterly curated insights into key competitors, from legacy rivals to start-ups.
Pharma Company Derives New Opportunities by Analyzing Video Conference Content
Given the often secretive and highly competitive nature of the pharmaceutical industry, it’s hard to find timely information on what the competition is doing. Most commonly, new developments and opportunities are discussed at conferences and other public events. However, these are expensive and time-consuming to attend to and contain much that’s irrelevant.
The pharma company partnered with Evalueserve, using our Conference Coverage tool, combined with the sector knowledge of one of our many domain experts, to dig into the audio feeds of conference videos, transcribing and analyzing them for industry insights. Where beneficial, we combined this AI-automated video and audio feed analysis with in-person note-taking and summaries.
The result was an invaluable information resource for the pharma company which would ensure that it never fell behind in the long journey toward product development and release.
Global Medical Device Company fills Portfolio Gaps with Competitive Intelligence
Evalueserve had developed a relationship with the medical device firm, gathering CI data across a range of areas, and keeping the company competitive. Their orthopedic arm required something a little different, however. We used Insightsfirst, a competitive intelligence system, to continually monitor a whole range of competitor activities including clinical trials, product launches and recalls, regulatory approvals, recruitment, investment, and other factors.
This was a broad-sweep use of CI aimed at providing a thorough overview of the orthopedic sector. We used the data gleaned to provide quarterly insight reports and perform SWOT analyses of key competitors alongside other types of study. Competitive benchmarking, using performance indicators, helped us position the client within its network of competitors.
The client gained a thorough understanding of their place within the sector and was able to devise new strategies for expansion and diversification.
Competitive Intelligence Keeps Companies on Top
In this article, we’ve seen how versatile a tool competitive intelligence is. It’s simply the most efficient way for a company to understand its place and its potential within a given sector. Not taking advantage of this tool seems reckless, given its prevalence in the arms race of big data.
Talk to Evalueserve today about how your business could benefit from gaining invaluable insights into your rivals, using competitive analysis.
