Unlocking Business Success: Competitive Intelligence
What is competitive intelligence, and why is it important. In this blog, we highlight three reasons why CI is crucial to business success and how best to leverage CI I your strategy.
Understanding Competitive Intelligence for Business Success
Competitive intelligence is a broad concept: Think of it as any intelligence that improves your business’s performance in the market. Insight on what, how and where competitors are operating is one aspect of competitive intelligence, but it is also important to include the role of partners and the perspective of end customers to establish an all-encompassing view of the overall market.
Most markets are imperfect, with complexity across regions and verticals as well as the need for a myriad of vendors to work together to create solutions. Due to that market complexity, information on what is occurring in the space and why can be difficult to ascertain. Competitive intelligence is one method to extract points of clarity that can serve as guideposts as you set objectives for your business.
Click the image below to hear more about competitive intelligence for business success from TBR Principal Analyst Allan Krans
Why Is Competitive Intelligence Important?
Competitive intelligence can be the best proxy for your own business decisions. Gaining a deeper understanding of individual vendors and the broader set of competitors in the market landscape can inform your decision making in a powerful way.
- Competitors as a proxy
Anticipating where the market opportunity is moving and how to capitalize on that is a challenging proposition, especially in dynamic, quickly evolving markets like IT. It is difficult to make complicated and/or significant investments, and the risks are always high. In quickly evolving markets, one of the best ways to reduce risk and increase the confidence of the overall organization in making business decisions is to look at how your competitors are handling the same situations. Understanding how and in which markets your peers and competitors are investing can provide a number of benefits.
First, this information validates strategic directions your own business is considering. It may not guarantee the success of an investment but at least it can provide reassurance that competitors are weighing the risk-reward ratio in a similar manner. Second, understanding the intent and strategy behind different decisions can be even more important for competitive intelligence. No two businesses are the same, so this context can allow your business to translate the intent of different competitor strategies into something that works for your business. The third benefit is gaining information about the outcomes of competitor strategies in real financial terms — one of TBR’s specialties. Revenue, expenses and profit margins are concrete metrics that can help you gauge the effectiveness of competitor strategies and understand whether the outcomes align with your business’s overall financial goals.
- Markets inform opportunity
Looking holistically at markets and how different peers and competitors operate within them can provide value competitive intelligence. This broad view can help you gain insights into where and how a group of key competitors operate within a market and with what results. TBR’s benchmark and market forecast reports are examples of this type of competitive analysis, illustrating the size, growth and strategies of a given group of peers within a market segment.
- Competitive intelligence can guide business strategies
A combination of competitive intelligence activities, including deep dives into segment leader strategies, broad coverage of other peers in the space and an analysis of the different objectives for those peers, can be used as a powerful tool for business strategy road mapping. These combined activities can illustrate the objectives, investments, outcomes and landscape against which your business will be competing across different endeavors. Just because your peers are going in a certain direction does not mean that is the best path for your business. Likewise, just because competitors are not making certain decisions does not mean your business should not consider them. However, an awareness of what is occurring can be an important source of intelligence.
Conclusion
There is no perfect customer, no perfectly aligned competitor, and no clear market opportunity, especially in IT. In a world where no perfect decision exists, competitive intelligence can be an informative window into how businesses in similar markets are operating their businesses.
Having market perspectives to consider, strategies to evaluate, and approaches to both emulate and avoid can be valuable. Competitive intelligence can provide these benefits and more, helping organizations plan future investments and reduce overall risk.
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