Learn all about competitive intelligence – what it means, how it works in practice, and how it can help take your business to the next level.
Have you ever wished you could be a fly on the wall of your competition’s board room – or that you could get a peek at their earnings before they came out?
These may be out of reach – but fortunately, there are legitimate and effective ways to gain insights of similar value through competitive intelligence. This process allows businesses to lawfully and ethically gather and analyze crucial information about both their competitors and broader market dynamics.
But what exactly is competitive intelligence? How is it collected, and what makes it different from corporate espionage? And what tools and platforms can be harnessed to facilitate the process?
Read on to learn all about competitive intelligence – and why it is so important for business decision-making. Some of the topics that will be covered in this article include:
Competitive intelligence is the process of systematically collecting and analyzing information about factors external to an organization that may impact its competitive edge. The term “competitive intelligence” can also refer to the information, insights, or knowledge derived from this process.
While gathering data on the organization’s competitors is one important facet of competitive intelligence, the scope of the endeavor is actually much broader. Competitive intelligence seeks to gain actionable insight into all the various elements – from general market trends to evolving customer preferences – that may affect an organization’s strategic positioning.
Unlike corporate espionage, which involves spying on competitors through illicit means like hacking, wiretapping, and stealing documents, competitive intelligence is completely aboveboard, as it entails gathering and synthesizing only information that is lawfully available.
Professionals commonly distinguish between two different types of competitive intelligence: Strategic intelligence and tactical intelligence. Strategic intelligence is concerned with the big picture – focusing on broad trends and market dynamics that may influence a company’s long-term competitive positioning. It aims to answer questions like:
Tactical intelligence, on the other hand, is more short-term in nature and aims to inform specific decisions or respond to concrete challenges. It focuses on questions like:
Competitive intelligence can be collected in a variety of ways. Some of the most common sources include:
Once collected, raw competitive intelligence must be rigorously compiled and analyzed in order to yield actionable insights. This often involves combining multiple data sources to generate relevant conclusions. Whatever the specific method of analysis employed, a competitive intelligence report should provide coherent, actionable insights that can effectively guide decision-making.
Some common forms of competitive intelligence analysis include:
SWOT is a data-driven strategic planning technique that seeks to assess a given company's competitive positioning. The first two steps of SWOT analysis – strengths and weaknesses – are inward-looking, focusing on the company’s own performance, financial strength, and other factors. Strengths can include things like impactful branding, a strong balance sheet, or a growing customer base. Weaknesses may include things like underperforming venues, customer service issues, or inadequate advertising resources.
The second two steps of SWOT analysis are outward looking, focusing on external forces that may hinder or enhance a company’s future performance. Threats can come in the form of increased competition, potential supply chain disruptions, changes in consumer sentiment, or disruptive technologies. Opportunities, on the other hand, may include untapped markets, partnership opportunities, or positive regulatory changes on the horizon.
SWOT analysis can be used to evaluate one’s own company – but it can also be used to evaluate competing businesses for the purposes of competitive benchmarking.
This type of competitive intelligence analysis focuses on the various macro-environmental factors that may impact a company’s strategic edge. Unlike SWOT analysis, which considers both internal and external variables, PESTLE is concerned with the wide landscape a company operates in.
PESTLE analysis accounts for a broad range of factors, including:
This method, developed by Harvard Business School Professor Michael Porter, focuses on the broader industry that a company belongs to. It evaluates the industry’s competitiveness and profitability by analyzing five key forces:
To better understand how competitive intelligence works in practice, we’ll delve into a practical scenario – using the specific example of a retailer conducting SWOT analysis informed by location data.
Imagine you run a 50-unit chain of sporting goods stores. You are considering an expansion and want to conduct a thorough competitive intelligence analysis using the SWOT framework. Your evaluation process may include some of the following competitive intelligence data points:
Of course, these are just a few of the kinds of data points that may inform your assessment. SWOT analysis seeks to account for all the various factors – from the strength of your supply chain to your relative success at attracting and retaining top talent – that may impact the competitive positioning of your company.
Competitive intelligence can be daunting. Collecting all the relevant data is a difficult task – and even once you have it, information overload can make it difficult to pinpoint significant trends and identify actionable insights.
Competitive intelligence software that aggregates and analyzes relevant data sets – including location analytics – can help overcome these hurdles. Placer.ai’s user-friendly and privacy-respecting location intelligence platform harnesses AI and advanced data science to provide unprecedented visibility into consumer behavior across the physical world. And with Placer’s Data Marketplace, customers can quickly and efficiently layer a variety of demographic and psychographic datasets on top of foot traffic data, to segment audiences and understand consumer profiles across industries, regions, chains, and individual venues.
Placer offers businesses the tools they need to conduct both strategic and tactical competitive intelligence – analyzing everything from broad market and consumer trends to the specific performance of competing companies.
To read more about how Placer.ai can help you take your competitive intelligence efforts to the next level, check out our solutions for retailers, shopping centers, brokerage firms, CPG companies, and others.
Competitive intelligence is a must-have for any organization seeking to maximize its strategic advantage. And in today’s marketplace, location data plays a key role in evaluating a given company’s strategic positioning, and in assessing the strategies, strengths, and weaknesses of the competition.