With the inception of the internet, industrial espionage has become quite outdated. new and ethical methodologies have emerged that help businesses monitor their market competition in order to create well-informed business strategies.
One such methodology is competitive intelligence.
So, what is competitive intelligence?
Competitive intelligence is an ethical way to monitor the activities of your competitors.
By definition, competitive intelligence is the process of defining, ethically gathering, analysing and distributing competitor data in order to create effective business strategies.
This competitor data can range anywhere from products to the customer. Competitive intelligence aims at understanding the overall market place better in terms of what works and what doesn’t for your competitors.
What is the goal of competitive intelligence?
- Analyse the market place
- Help business thrive amidst market competition
- Understand potential threats and opportunities
- Formulate effective business strategies
As every coin has two sides, there can be multiple pros and cons to opting for the competitive intelligence methodology for your business.
Advantages of taking this methodology:
- Competitive intelligence can help companies understand the market-place in a much better light.
- It can create a benchmark for the business, making room for growth.
- Competitive intelligence can facilitate healthy market competition.
- It helps business formulate well-calculated and effective business strategies.
- Focused business strategies created through competitive intelligence reduces additional losses caused by constant trial and error.
The disadvantages of opting for competitive intelligence:
- Competitive intelligence is relatively more complex and time-consuming.
- Analysis based on incorrect or incomplete data can lead to faulty business strategies.
- Competitive intelligence can be potentially hindering to innovation.
The pros of competitive intelligence often outweigh the cons. You must research thoroughly and understand the time and resources you will need to put in. If you decide to set up competitive intelligence for your business here are the steps you need to take
How to set up competitive intelligence in your business?
1. Identify competitors
Businesses must first identify their main competitors in order to further set up competitive intelligence. Competitors can be divided into the following categories:
Direct competitors- Direct competitors are those that provide the same services as yours, targeting the same audience and market place. For instance, Thomas Cook’s competitors may include similar conglomerates offering similar travel and hospitality network and financial services globally.
Indirect competitors- Indirect competitors are those that offer products and services different to your company but meet similar needs that your company does. Take Uber, for example. For Uber, a private ride-sharing company, public transportation services are indirect competitors as they meet the requirements of the consumers but do not offer the same services as Uber does.
Tertiary competitors- Tertiary competitors are those that do not provide the same product as your business or meet the same requirements but are targeted at the same consumers as yours. For instance, travel start-up providing bespoke travel experiences might prove to be tertiary competitors for Thomas Cook. The purpose of analysing tertiary competitors is to understand whether these competitors will become potential threats or partners.
2. Decide the purpose of setting up competitive intelligence
Before you set up competitive intelligence, you must define the exact purpose for which you wish to do the same. This will help you in narrowing down the aspects of your competitor’s data that you wish to monitor.
Companies such as Uber have used competitive intelligence in the past to thrive in a competitive environment, better the overall customer journey and to delve into newer ventures for growth.
3. Understand competitor’s buyer journey
You must understand the overall marketing and sales funnel of your competitors to understand every step of the buyer journey from awareness, consideration to purchase. Here’s an example of a marketing funnel that you can consider and analyse your competitor’s strategy against:
For e.g., in case of Uber’s buyer journey for its cab services, the buyer journey is such that drivers sign up with the service and get access to the driver’s app. Uber gets a certain amount of commission while the rest goes to the driver.
Consumers download the app, book a cab and rate the driver’s performance accordingly. Its marketing strategies initially were mainly through referrals, partnerships or stunts such as self-driving cars. With the growing number of competitors, the company’s marketing efforts have grown. The buyer journey has also improved accordingly.
4. Social Media
In this age of internet, you must understand the importance of social media. Monitor the social media marketing efforts of your competitors. Understand what platforms work within your niche and what platforms are your competitors are most active on. You must then analyse the type of content that they put up on said platforms. Do they run ads? If yes, what kind of social media ads do they run and on what platform?
Here’s an example to help clear the concept. For a travel and hospitality company such as Thomas Cook, most of its competitors target social media platforms for their marketing purposes. According to an article in the Telegraph UK, Instagram is quickly becoming an alternative for travel brochures and travel agents for holiday-makers to book vacations. No surprise that the company has a vibrant Instagram account with pictures and videos of amazing travel destinations where it frequently posts latest deals and offers as well.
Thomas Cook has also focused on updating its app to meet the latest demands of market competition.
5. SEO and Website monitoring
Search engine optimization (SEO) is the process to rank your website on specific keywords that your consumers may search in order to look for a product or service in your niche. You must analyse your customer’s SEO practices as well as the overall layout of their website and landing pages.
See if they run Google ads. If yes, then on which keywords and at what bid amount. This will help you majorly in setting up your own website, landing pages as well as forming effective SEO strategies for the same.
In case of a travel and hospitality companies such as Thomas Cook, for instance, customers may search keywords such as ‘travel booking services’ or ‘book my travel.’
There are a lot of SEO tools available that can help one monitor these aspects of competitors.
6. Implement intelligence in business strategies
Once you gather specific intelligence in terms of what is working and what isn’t for your competitors, the next step is to implement your findings in the form of strategic business moves. Thomas Cook’s moves to develop AI and update their app are a move to keep up with the market competition.
With the emerging online travel and hospitality survives in the market, the company has to make such strategic moves to survive and thrive within the market. Another example could be Thomas Cook India’s strategic buy of a 24% stake in a travel-tech start-up called Travel Junkie Solutions.
The start-up was the creator of the app Ithaka that offered bespoke local travel services. Understanding the potential of growth within the space, Thomas Cook acquired a stake in the company to partner rather than compete with the app.
You can also share the insights gathered through competitive intelligence with your teams to create a collaborative environment while forming business strategies.
You can either utilize off-the-shelf competitive intelligence tools or set up your own system to implement the same.
In the end, detailed competitive analyses through competitive intelligence along with a business’ penchant for innovation are the perfect recipe to market success.