Competitive Intelligence in Marketing and Sales
In every B2B environment, there exists a competitive playing field where companies are battling for market dominance among their competitors.
Each respectively has a game plan for their go-to-market strategy in which they vie to catch the eye of their customer with their special product/service.
As an industry matures, the marketplace tends to get saturated with myriad companies selling the same thing, creating an increasingly competitive landscape.
This can make an uncertain future for business leaders looking to retain their current client base and gain new ones. Customers now have more choices to choose from and have increased buying power over the seller.
What are the four buyer types in a buying system – and how much influence do they have?
In order to stay atop your competitors, you need to understand your market strategy and your competitors.
In a recent Harvard Business Review article, they explain how a popular Nestle snack in India had come under fire for containing high levels of lead. Not only did this cost Nestle $277 million in sales, but a competitor took note of this and launched a competing product that was advertised as healthier and more cost-efficient. This resulted in Nestle losing close to $500 million on its once popular snack.
So, how does competitive intelligence tie into this? Gathering competitive intelligence (CI) isn’t just about gaining insight into what your competitors are doing; it’s about building knowledge that can be leveraged in the decision-making process for all silos of the business.
CI doesn’t just stimulate information sharing between sales and marketing, but across all departments of the business from top to bottom, helping uncover unknown strengths and weaknesses.
Competitive Intelligence: What is it?
Those who lack experience in CI may think of it as some sort of method for corporate espionage that consists of spying on your competitors to gather intelligence and use it against them. This couldn’t be farther from the truth.
What it really comes down to is being able to assess the environment you do business in and how you interpret and utilize the data you gather from it.
John E. Prescott, Ph.D., the author of a journal article entitled “The Evolution of Competitive Intelligence,” defines CI by saying that CI is
“the process of developing actionable foresight regarding competitive dynamics and non-market factors that can be used to enhance competitive advantage. Competitive dynamics refers to the evolution of a firm’s industry, and the moves and countermoves of competitors, suppliers, customers, alliance partners, and potential competitors. Non-market factors such as government regulation, tariffs, and the culture of a country impact competitive dynamics but are not suppliers of products or services in the industry.”Source: Prescott, J. E. (1995). “The Evolution of Competitive Intelligence.” International Review of Strategic Management, 6, 71-90.
Like a SWOT analysis, CI revolves around being able to identify the changes in the market and then use that knowledge to make a strategic response.
It is important to note that CI includes the study of competitors and market conditions and considers many segments outside the business that are involved.
Competitive Intelligence vs. Business Intelligence
When discussing CI, it is also important to bring up business intelligence (BI) and distinguish the difference between them.
According to Celina Olszak, a professor at the University of Economics in Katowice, Poland, both CI and BI are focused on the collection, analysis, and actionable use of data from a variety of sources.
She explains that:
“BI is the activity of monitoring mostly the internal business processes, while CI is focused on the monitoring of external environment and uses public resources to locate and develop information on competition and competitors.”Source: Olszak, C. M. (2014). “An Overview of Information Tools and Technologies for Competitive Intelligence Building: Theoretical Approach.” Issues in Informing Science and Information Technology, 11(1), 139-153.
CI is normally considered a subset of BI.
They both play a very crucial role in the gathering and sharing of information to help businesses make data-driven decisions.
Additionally, Olszak argues that neither can be replaced by the other since BI is tied to internal company information and processes, while CI is mostly external.
Strategic vs. Tactical Intelligence
There are multiple types of CI, but the most common two include strategic and tactical.
Aneesh Gupta from Centelli explains the difference as tactical being a type of CI that is focused more on short-term goals handled by a specific team like sales or marketing to improve a certain aspect of the business.
The team tasked with a tactical challenge would be working on a performance-based project and analyzed in real time.
Gupta states that strategic intelligence “is a type of Business Intelligence that deals with how insights from the data will be implemented, it drives and informs strategy. It supports planning and all forward-looking business activities.”
This type of CI is long-term focused and aims to forecast potential threats and opportunities.
In fact, it’s recommended that any business strategy with long-term goals should include this type of CI.
Stay tuned for our next post to learn more about CI, how to implement a CI process, and why CI matters!