Introduction

Most businesses face the fact that they are not unique and that other organisations are offering similar products to the same customers. These other organisations are your competitors. Their objective is the same as yours - to grow, make money and succeed. Effectively, your business is at war with the others - fighting to gain the upper hand and fighting to win customers.

As in any war, it is necessary to understand your enemy:

how they think;

what  are their strengths

what are their weaknesses

where are they vulnerable

where are they strongest....

and so on. Your competitor will have secrets that can be the difference between profit and loss, expansion or bankruptcy for his business. Identifying these secrets is crucial for survival. But all this is not new...

Sun Tzu and the Art of War

Around the year 500 BC, the great Chinese military strategist, Sun Tzu wrote a treatise on the Art of War.  His views on strategy are still relevant today - for both military commanders and business leaders looking at how to win against competitors. For instance:

If you are ignorant of both your enemy and yourself,
then you are a fool and certain to be defeated in every battle.

If you know yourself, but not your enemy,
for every battle won, you will suffer a loss.

If you know your enemy and yourself, you will win every battle.

What are the differences between competitors?

Just as Natural Selection forms the creatures of the world so that those inhabiting similar climates and with similar needs share similar features. So it is with companies competing, they can often be seem to be very similar. But this is an illusion, for the closer one looks the more the differences appear. 

Customer's usually recognise some of the differences between companies - their good points and bad points. They know that company A is cheaper than company B and that company C has a better after-sales service. For any business to operate in a market and not know at least this, is tantamount to giving up the battle without even starting. As Frederick the Great said:

It is pardonable to be defeated, but never to be surprised

However, most useful competitive intelligence is not won so easily. Spotting the significant, but hidden differences between competitors in a market is generally impossible from the 'outside'. It requires deep inside knowledge and a undersatnding of what is important and why. This is why we advocate the best people to collect the intellignce are the competitors themselves.

So what is involved?

There are three stages in monitoring competitors - the three "C"s:

• Collecting and collating the information and knowledge
• Converting knowledge into intelligence
  
• Creating competitive activity based upon the intelligence 

Collecting competitor information

Information will come from a variety of sources, both within your organisation of from outside.

Sales staff dealing with customers will hear what competitors have been doing, or are planning to do.

Support and Technicals staff may find out about the success (or failure) of a competitors projects of products.

Purchasing may find out that a supplier is now also supplying a competitor.

Market research can give feedback on the customer's perspective

...but these are just examples of where information can come from.

From knowledge to intelligence

You should now be able to create a large pile of data on your competitors. Unfortunately much of this data will be repetitious, out of date, wrong or inaccurate, misleading, or incomplete. However like a jigsaw, each piece can help build up the compete picture. And even if some pieces are missing, you can often get a good idea of what the real picture.

The relevance and importance of each piece of information needs to be interpreted and analysed - on its own and in conjunction with other information, the other pieces in the jigsaw. This is where information starts to become intelligence.

We advocate the best way to do this analyis is to open the scrutiny and interpretation to the knowledge community - the original source of the data. Whilst a knowledge expert my lead the process of interpretation, their output is always open to scrutiny and comment by the knowledge community - who are the users of the intelligence too.

Communicating the intelligence

Many companies are overly secretive, protecting information that all their customers and competitors already know. Secrecy is important, but letting the sales force attempt to sell products without a full awareness its strengths and weaknesses relative to the competition is like sending them out with one arm tied behind their back. They will be unable to answer objections and comparisons convincingly, and thus are less likely to make the sale.

And if the competitor product is that much better then shouldn't someone be doing something about it it instead of hiding the fact?