13 Nov Why the best organizations use competitive intelligence?
Why the best organizations use competitive intelligence?
The last few decades has seen only the best organizations use competitive intelligence (CI) for decision-making. For every best organization that undertakes CI for all its marketing strategies, there are also some organizations who disregard the same. It is a well-known fact that marketing strategy comprises of consumer and competitive Intelligence.
Recent researches done on Fortune 500 companies revealed that only 55% of the companies used competitive intelligence services when they set out to compose their business strategies. The research further revealed that the business firms who engaged in CI are market leaders in their respective field of operation and every single firm was well-informed about its rival’s business operations.
Why only the best organizations opt to use competitive intelligence services?
It is an open secret that the use of competitive intelligence services for deciding business strategies has paid off for leading companies who have an annual turnover of more 10 billion dollars. These organizations have their own well-organized and well formulated competitive intelligence system. In fact, many of the largest organizations have a full-fledged department dedicated to competitive intelligence. Even mid-sized firms, outsource competitive Intelligence services for the purpose of gathering and analysis of intelligent information. Even smaller business owners tend to undertake Competitive Intelligence services on their own.
Study reveals that those organizations that undertook competitive Intelligence services outperformed the other organizations who failed to undertake CI in many areas including market share, sales, sales per share and profitability.
What is competitive Intelligence?
Competitive Intelligence (CI) is the systematic program engaged by a company or firm for gathering and analysis of information about its competitor’s business activities and trends to further its own goals. The knack to understand what the competitors are doing in a way that is not illegal is competitive Intelligence. Competitive intelligence practiced responsibly is known as legal and ethical.
Why is competitive Intelligence so Important?
With markets and companies overseeing rapid changes in products and competitors, engaging in the competitive intelligence of the business strategies has become mandatory for companies. This is mainly because of a short span of product life cycle, globalization etc. Hence generating competitive intelligence has become essential for survival.
The question arises as to why a company should bother about its competitors, what the competitors are doings and how is it going to affect the company in any way if so?
The answer for this lies in one word and that is –competition. No company operates alone. There are also other players in the field who deal in the same product as that of yours. This means that they compete with the same consumer base as yours and if you have to get your share of the cake then you need to have that competitive edge over your rivals and this is where competitive intelligence helps.
The more information a firm gathers about its competitors, such as information about the products and services of the rival, the number of employees working with the rival, the competitor’s sales strategy, their revenue etc, it becomes easier for the company to capitalize on the strength as well as weaknesses of the competitor.
Check out this article on how competitive intelligence helps in devising better marketing strategy.