Competitive intelligence is a strategic capability. It is your company's window on the outside world and on the future. Competitive intelligence helps your company manage points of vulnerability wherever they may occur, at any link in the value chain, from key suppliers to key customers.
For example, suppose your company has a major customer you have been serving for years and, unbeknownst to you, they decide to go into your business. Or they have decided to begin doing business with one of your competitors. Or they have decided to exit the business completely. A company that does not have advanced intelligence regarding such shifts may make decisions that involve large commitments of resources and capital that are costly or perhaps even fatal mistakes based on erroneous expectations.
These are among the more common scenarios that require special efforts to acquire competitive intelligence:
Whether your company is undertaking one of these initiatives or whether it faces a vulnerability around disruptive threats to its markets, your company requires competitive intelligence either as in internal capability or as an external service. We often recommend that companies create their own internal competitive intelligence capability. Such a capability is more than just a small team of researchers and analysts working from within a strategic planning function. Companies must also create a culture of competitive intelligence, a general awareness of the need to gather information that might reveal competitive threats or opportunities.
For example, teach your sales and marketing personnel to keep their ears open when they're talking with potential customers. Teach operating personnel in these functions how to leverage trade shows as opportunities to gather intelligence. Generally, companies underutilize such opportunities to gather a great quantity of high quality information that will allow them to better manage their risks and opportunities.
However, in many instances an internal competitive intelligence capability is not enough. Make use of external parties in situations where it may not be legal or ethical to gather the intelligence using in-house resources. There will always be situations where you need to gain access to knowledge about a competitor, a supplier, or a customer in a way that precludes the use of in-house resources. For example, GM is not likely to travel over to the new Chrysler design center and ask about the details of its new relationship with Fiat. However, outside resources may be able to leverage their skills at data gathering such that GM obtains valuable information in a manner that is legal and ethical.
When a company should use outside as opposed to internal resources is often defined by the answer to a simple question: Does the company need to have the information from a location or a source that it is precluded from approaching directly? In practice, the use of outside resources tends to be governed by the difficulty involved in securing the information sought. Well-managed companies do, in fact, develop their own internal data gathering capabilities and use them extensively.