Frequently Asked Questions

This guide to competitive intelligence and competitor analysis is by its nature, quite basic and is a summary and precursor to a more detailed article published in Business Information Review in June 2002. (You can download this from here). There are also many books on the subject – covering everything from finding information on competitors, to analysing the information and finally using it in business strategy. We list a number of titles on our recommended books pages – (for example the classic texts on strategy by Michael Porter – Competitive Strategy and Competitive Advantage).

We can also help you in most aspects of CI. AWARE» offers competitive/marketing intelligence training and competitive intelligence research and analysis so that you can learn how to do CI effectively yourself. However, enough of the preamble….

This seems a straightforward question, but people use the terms in different ways. Our definition follows:

• Competitive Intelligence is the process whereby information on the competitive environment is gathered and used to guide and inform company / organisational decisions. Competitive Intelligence looks at the overall external competitive environment (which includes suppliers, customers and other company stakeholders, as well as the economic, sociocultural, political, legal and technological environment facing the company).
• Competitor intelligence is a subset of this – looking purely at competitors (as well as potential competitors), rather than the overall competitive environment (which include customers, suppliers, regulators, etc.).

For some people, competitor and competitive intelligence are effectively synonymous. Terms such as marketing intelligence and business intelligence are also used to cover the wider environmental aspects (although business intelligence is also often used as a term for mining corporate internal data for information and has no connection to markets).

Other terms encountered include – marketing intelligence, market intelligence, sales intelligence, technology intelligence, financial intelligence and economic intelligence. Essentially these are further subdivisions, limiting information to decision processes relating to marketing, sales, technology, financial or economic business functions, etc. although there can also be overlap – for example, marketing intelligence refers to the intelligence required to gain a competitive advantage within the marketplace overall – and as such, includes sales aspects and a knowledge of the competitor situation.

Note: This FAQ was originally published in the Strategic & Competitive Intelligence Professional‘s membership magazine (Competitive Intelligence Magazine – Mar-Apr 2003).

We’ve recently started using a much simpler definition for Competitive Intelligence i.e. CI is the intelligence needed to enable companies to profitably gain customers, winning out against alternatives”. The reason we like this new definition, apart from it being simpler, is that it focuses on customers. The aim of the business is to gain and keep customers who have a choice on who they do business with – i.e. they can choose alternatives which may be competitors but can also make a choice not to purchase at all (i.e. to be non-customers). Customer choice can depend on many factors – the overall business / competitive environment (as in the first definition) as well as other aspects such as the company reputation, the technologies used, the economy and much more.

We include the word “profitably” as not all customers are financially profitable. Profitable may also mean providing referrals. With non-profits and the public sector customers may not even be a source of revenue at all and “profitably” satisfying customers may involve completely different metrics to those required for a for-profit business.

Prior to making an acquisition of, or merging with, another company, due diligence research should be undertaken to confirm all the facts about the prospective company. Generally this includes a full review of the other company’s finances and looks at the fit between the two companies.

Due diligence research should also look at the business environment, management capabilities, historical profitability and the company’s market potential. Often however this full process is skipped or rushed – as there is a wish to make the deal. Too often, acquisitions fail to fulfil their promise and expectations and this is generally because softer, qualitative factors have been ignored. Competitive intelligence can help in due diligence research by filling in these gaps. It can look at other companies in the market to understand the real competitive situation and evaluate the technologies, customers, suppliers and help identify potential problems that would often be missed by the more traditional approaches focusing on finances and product fit.

Essentially, due diligence research SHOULD also include competitive intelligence type research and not be limited to financial / product aspects.

Knowledge management is the process through which corporate knowledge is used to improve organisational performance. Essentially it looks at managing internal knowledge processes, developing the efficient usage of all information required for corporate decisions.

Competitive intelligence (CI) is a process for gathering usable knowledge about the external business environment. CI focuses on turning external information into the intelligence required for tactical or strategic decisions relating to the business environment. Without an effective knowledge management process, gathered CI is likely to collect dust — there is no proper process to turn the information into something usable. Even if immediate actions are taken based on collected CI, it must be integrated into the internal knowledge systems to develop any long-term learning. This learning is a crucial element to enable companies to become skilled at spotting trends and adapting to business change.

In this context, I think that it does no harm to think about Charles Darwin. Darwin’s focus was on the survival of the fittest and not the survival of the biggest or the cleverest or the fastest. Survival of the fittest refers to a species’ ability to adapt to its external environment as this changes.

Exactly the same principles apply in business. Businesses with effective processes for collecting intelligence on their external environment, integrating it with internal information and then using both external and internal knowledge to take advantage of opportunities while guarding against threats will be those that survive in the long-term. The dinosaurs could not adapt to sudden climatic change – and the same will apply to corporate dinosaurs that think that being biggest or richest is all that is needed.

Note: This FAQ was originally published in the Strategic & Competitive Intelligence Professional‘s membership magazine (Competitive Intelligence Magazine – Mar-Apr 2003)

OSINT, HUMINT and SIGINT are terms adopted from military intelligence and describe different ways of obtaining intelligence – whether for military uses or also for commercial purposes – as in competitive intelligence.

• OSINT stands for Open Source Intelligence and refers to gathering intelligence on a competitor (or other target) using open sources – generally via search engines on the Internet but also from specialist databases such as patent databases, news aggregators and more. It can also include accessing market research reports and printed materials.The key is that it is essentially research that involves a search of “open sources” such as the web. As such sources have increased, its importance has grown and some would say it is now more important than both HUMINT and SIGINT.OSINT also includes an emerging sub-division, sometimes called SOCMINT which stands for social media intelligence. This involves looking at social media (Facebook, Instagram, LinkedIn, etc.) to gather intelligence on companies, other organisations and individuals based on what they post on the various social media channels.The skills for uncovering such material are important for CI professionals and go well beyond an ability to use basic Google. Examples of material that AWARE» has found include complete supplier lists, customer lists and even minutes of executive board meetings for target organisations. All such material was gathered because they were made publicly available – although generally the organisation making the material available thought that it would not be findable. As one example, we found a list of customers along with their spend and forecast spend that had been embedded in a PowerPoint presentation that was made available on this listed company’s investor page for all to read (although to find the list you had to download the PowerPoint to access an embedded Excel worksheet). Finding such intelligence takes an ability in not only knowing how to look, where to look but most importantly being aware of what can be found and knowing how to spot such intelligence when it is available.
• HUMINT stands for Human intelligence and refers to the processes used to gather intelligence from human sources. In the competitive intelligence world it involves speaking to target organisation customers, suppliers, employees and ex-employees and other stakeholders with a knowledge of the target. There are strict ethical norms relating to HUMINT – for example when calling a contact it is unethical to lie about your identity and to misrepresent yourself. Nevertheless there are approaches that can be taken that will persuade contacts to speak and describe what they do and to give away knowhow that they may view as worthless but that can be invaluable to the company collecting the intelligence. Often this is because in itself the information provided is a small part of a bigger picture. By collecting several such pieces, the overall picture can be derived.As a general rule, OSINT research is needed first – to identify people to speak to and often also to understand the full background of the research question, looking for what has already been openly published.
• SIGINT refers to Signals Intelligence and in the military world  is information gained by the collection and analysis of the electronic signals and communications of a given target. In the commercial world much of such intelligence can only be gained by hacking into the target systems and so is not only unethical but also generally illegal. However it has been mentioned in the context of analysing intelligence gathered from social media sources such as Twitter and involves identifying patterns in large numbers of tweets (or other news type items) from multiple sources, and from this deriving an understanding of target competitor plans.

It is not the external CI expert who loses out if an organisation’s strategy goes awry. It is the organisation’s management who have this responsibility. So outsourcing functions should only occur where there are clear benefits to the organisation.

In the case of competitive intelligence a considerable amount of key intelligence will be held within the firm itself. This comes from the experience of employees and the contacts they make. Competitive information should be picked up during the sales processes, for example. There is a real risk this kind of information can be lost when outsourcing competitive intelligence to an external consultant, unless this consultant is seconded onto the staff and works in the company on a daily basis.

However a CI consultant can offer an objective perspective that can be hard to obtain using internal staff.
Consultants should also be considered where there are either insufficient staff members, or not enough staff with the skills for a particular intelligence requirement. In such cases, failing to outsource competitive intelligence to a CI agency or consultant can be damaging as it will mean that decisions will have to be made without the intelligence needed to reduce risk and support  decision-makers.

Showing the value of competitive intelligence (CI) to sceptical management is one of those questions that keep getting asked. Unfortunately, the question is one that is not always easy to answer: it can be quite hard to demonstrate the value that effective competitive intelligence gives to organizations. Companies may even only find the value years after cutting their competitive intelligence expenditure when a competitor springs a surprise and the company is caught with their pants down. Of course, by then it is too late!

Competitive intelligence can be looked at in the same way as a fire insurance policy – it provides a form of risk insurance, providing the organization with the information required to protect against direct threats posed by competitors and the environment.

Effective competitive intelligence helps organizations identify opportunities and threats, providing the information required to make decisions that can take advantage of the opportunities and steer clear of the dangers of time and at the lowest cost. Viewed like this, it becomes easier to see the value that competitive intelligence can give. The question becomes not “what does competitive intelligence cost” but “what is the cost of not having the information provided?”

The best ways of learning about CI will be through

• commercial CI firms offering competitive intelligence training – for example, we offer in-house training covering all aspects of CI;
• The Institute of Competitive Intelligence (ICI) offering a full range of competitive intelligence training options;
• the Strategic and Competitive Intelligence Professionals (SCIP – www.scip.org) – via SCIP chapter meetings;
• conferences on CI organized by ICI, SCIP, and others;
• training companies including competitive intelligence in their course catalog;
• books on the topic.

Where can I learn more about competitive intelligence – detailed answer, including more information on course providers, etc 

In order to identify your competitors it is useful to think like a customer and how a customer would go about finding a supplier – what steps did your customers take to find you? What are their needs? What other companies are meeting, or can meet, the same or similar needs – and how. These are your potential or actual competitors.

One way you can approach this is as follows:

1. Ask yourself what type of company would be a competitor. Are you interested in direct competitors in your locality or anybody offering the same business as you nationally or globally. What about suppliers to your market or adjacent markets? For example, would you view a company in a different town or country, or supplying a different customer segment as a competitor. (Even if they are not, you may be able to learn from them).
2. The next step will be to identify potential customers and contact them to ask them about their vendors and who they buy from and why. I would ask my customers the same questions, as this will give information as well. (Ideally, this should NOT be done by your organisation, but by an independent company to ensure bias free answers. If the company has a prejudice for or against your company, you will not get good answers. An independent company should not need to divulge your name).
3. Check who is advertising in the media (online & social media, press, radio, television), and for your preferred keywords on the Internet. Who is advertising? Which companies appear in the search listings?  Is there a difference searching on Bing from the same search on Google?
4. Having a list of competitors, follow up with conventional competitor research. Get the company annual reports. (Use company registries or company information providers). Look to see what is in the press about them. Also try and get copies of marketing material – perhaps directly from the competitor.
5. Finally look at who is exhibiting in relevant trade shows – as these are potential competitors too.

Using this kind of approach you can generally identify your competitors and some basic information on each. It is likely that the customer base for some of these companies will be different to yours. (Some may target higher-value customers, some smaller niche customers. Although such companies are offering similar products they aren’t really competing for your customers).  You should focus on those actively competing with you or who have the capabilities to (e.g. financial strength, and expressed interest). This does not mean that you should ignore the remaining companies. They may not currently be competing with you yet as they are producing similar products or services they may have the capabilities to compete with you. It is a question of emphasis and prioritisation.

The sort of information you should look for depends on the competitor, the market and the overall business environment. If the competitor is winning out against you, then you need to understand how and why. Is it a problem in what you are doing – leading to customer dissatisfaction, or are they doing something better? If the competitor is winning out in the overall market, the same sort of questions are raised – although if you are holding your own against them, the priority may be different. If the competitor is new to the market, do they offer anything new that is more attractive to customers? Do they use any new technologies in their business operations that could give them an advantage?

These are typical considerations to look at. Essentially, when looking at competitors you need to understand their capabilities – finances, products & services offered, management skills, etc. You should also find out what their goals are and assumptions about the market. Finally, an understanding of their strategies is key – and combining all these aspects can allow you to anticipate what they are likely to do next.

What sort of information should I look for on competitors? – a detailed answer, including links for selected research sources.

There is no “formula” for collecting information on competitors – but there is a process. First, you need to differentiate between passive collection and active collection.

Passive collection involves collecting and storing information that comes your way through the daily operations of the company. With a passive collection, there is no targeted collection plan as such – and what comes in is essentially random.

Active collection is different and requires planning along with a formal search strategy. Typically, the aim is to answer a specific question regarding a competitor and to monitor for changes e.g. with the competitor’s website or news about the competitor.

How do I monitor my competitors’ activities? – examining both passive and active competitor monitoring approaches.

The availability of financial information depends on which country you are looking at and what types of companies.  For many industrialised countries it is relatively easy and low-cost or free to obtain financials on companies of interest. If the company is publicly quoted, then you should be able to find full financial information as this will be made available to shareholders. However it can be harder to find financial information on private companies.

In some markets there are statutory requirements to make private company financials publicly available. These include most European Union countries as well as Australia, India and a number of others. Unfortunately there are many countries where private companies do not have to file publicly,  making it difficult to obtain good quality financial information although some financial information providers do collect some data.

Where can I find financial information on my competitors? – detailed answer outlining methods and some key sources for Europe, the USA and elsewhere.

One of the problems for competitive intelligence is that sources can often be unreliable or inaccurate. Sources may not know the full story or may give false, out-of-date or inaccurate information. Sometimes this is deliberate – where companies leak information about forthcoming products with the aim of forestalling competitor products.

One approach to solving this is to use a ranking system, where you allocate points for each item depending on factors such as:

• has the source been reliable in the past;
• is the information corroborated by other independent sources;
• does the information make sense or fit with what I already know about the topic.

Sources are then ranked and only those passing a threshold are trusted. Scoring sources using a ranking system shows how this can be done with a 5-point scale with a case example showing how even reliable sources can sometimes give out inaccurate and false information.

There are two ways of doing a competitor evaluation.

1. A shotgun approach – where you go and collect everything available including the name of the chairman’s wife and children and which schools they go to. This will give you a ton of information – most of which will be irrelevant. (Yes – believe it or not, we have been asked to find family information such as this. Apart from the fact that obtaining it and passing it on would generally break European data protection regulations, such information is highly unlikely to provide intelligence that would help business decision making – which is the purpose of collecting competitive intelligence. It is valid to collect information on key management so that behavioral profiles can be created – but this does not usually need to include detailed family information such as schools, spouse details, etc.).
2. A targeted approach. You need to formulate what is often called a KIT – or Key Intelligence topic. Identify what you need to know about a particular competitor, break it down into a series of key questions, and go and find that information only. As new needs come up, you will formulate new KITs. Over time you will develop a very targeted and custom based knowledge on the individual competitor, its approach, behavior patterns and strategy. This can then be used to feed back into your own strategies to formulate counter moves.

The second approach makes much more efficient usage of time and will be more useful for management as it gives them what they need without the requirement to sift through that ton of data. Of course, the ton of data is important as it gives background information, and can help in spotting new trends and anomalies that may signify a change in strategy for the competitor or confirm other information. However, when asked to do an evaluation the first question should be what is the purpose? (If an acquisition then the information will be different to looking at new product ideas or new market moves).

However if you already have lots of data, you should not just throw it away as what may seem irrelevant now may be important later. One approach is to construct a detailed profile of the competitor. A form I use as a guideline breaks down the major types of information that you are likely to collect or need on your competitors as follows:

I use this as an aide memoir for everything on a particular competitor. It is essentially a brief summary of all the essentials – so that you have everything in one place. Its purpose is to save you from having to look up the key points and search through several documents – whether held in a hard-copy format or computerized.

A key intelligence topic (or KIT) defines a particular set of needs for a particular user of competitive intelligence. The process is a derivation of the CIA’s national intelligence topics, which facilitate the US Government’s task of organizing, prioritizing and focusing intelligence resources on the primary needs of the national security community and its policy makers.

KITs are characteristically categorized as one of three basic categories:

• Strategic Decisions and Actions
• Early Warning Topics
• Descriptions of Key players. (Competitors, customers, suppliers, partners, regulators, etc.)

What are KITs and how to define them?  – detailed answer, giving further information on each type of KIT, etc. 

It is a normal competitive practice to benchmark competitor prices in most markets. If you are not monitoring competitor prices then you are missing a crucial and readily available source of competitor information that can give clues to a vast quantity of additional data. (Link price changes to company financials, to get trends in profitability; price changes also gives indications on how the company sees its products over time and thus overall marketing strategy.) This applies irrespective of whether you are a retailer, manufacturer or in a service industry. The only real difference is the accessibility of the price information.

In the retail sector obtaining price information is usually straightforward. You can go to a shop and ask or usually just see the price tag. As a consumer, there should be no problem shopping at a competitor’s outlets. However, it is not ethical to nose around in “staff only” areas or store rooms, for example, or to damage stock, etc. Also, although the information is usually public, store staff may object and ask why you are making long lists of prices and stock holdings. If they do, you would need to say what you are doing – otherwise, you would be misrepresenting yourself – so walking around with a note pad, or recording device could cause raise suspicions and cause you problems. Of course, this problem only arises when checking prices at a physical location. Checking prices on their e-commerce / Internet stores is much simpler.

In business-to-business environments collecting price, information can be much more difficult. Many companies are secretive. Even worse, they may not even have a formal price list that will be made available outside the company. Prices offered will vary depending on a number of factors, including the quantity purchased (and so any resulting discounts) or other services offered. Unless you actually intend to purchase competitor products, do not claim to be a potential customer if contacting a competitor directly – as that could be viewed as misrepresentation and so unethical.

Nevertheless, in the majority of cases, pricing information IS in the public domain. It is in the customer’s interest to get the best deal. So, it is in the customer’s interest to know what prices the various suppliers in the industry are offering. As a result, the first point of contact can be your customers and your competitors’ customers.

Speak to your customers (or get your sales people to do this). Ask what the competitor has quoted. Contact lost customers and prospects and ask what they actually paid for the product. You can generally be quite open – saying your company name. To non-customers you can also say that you need the information so as to ensure that your products are competitive. It will usually be in their interest to give some information – as perhaps next order they will get a better deal. All this is ethical – as you are not misrepresenting yourself or asking for confidential information. (When asking for prices, do not attempt to gather information if it is covered by a confidentiality agreement signed between the competitor and your contact! Obtaining information from such contacts will mean they have breached their agreement and so puts both you and the contact at risk of getting sued!)

In some cases, especially for large scale projects, products are put out to tender. In such situations, it may be possible to find the value of bids put out by competitors from a variety of public sources. In Europe, there is a database called Tenders Electronic Daily (often called TED) at http://www.ted.europa.eu/ that records the bids for all major governmental supply, service and public works contracts within the European Union. Information recorded includes pre-information notices, invitations to tender and contract awards. TED is particularly easy to use and now covers almost all Western European and most Eastern European countries – members of the European Union. Other databases tend to be more specialist – but do exist. A useful site for sources for USA government bid and the tender information is held at http://www.fedmarket.com/. Finally, you should not ignore your own industry journals, which frequently record contracts won by companies and their value.

Trade shows are one of the best sources for information on competitors. At trade shows, there are the obvious opportunities to collect competitor brochures, as well as free pens and enough chocolate to keep your dentist busy for another year. However, if that is all you collect then you’ve missed a major opportunity to learn more about your competitors. Rather, you should view trade shows as an easy way to update your knowledge about the overall competitive landscape – for example:

• Who is doing what and when, where, how and why?
• What new technologies are being offered?
• How are competitors marketing themselves?
• Who is going up, and who is failing?
• Who is allying with whom?

And so on.

Trade show & conference intelligence – detailed answer highlighting steps to take before, during and after the event.