COMPETITIVE INTELLIGENCE: WHAT IS IT, AND HOW CAN IT BENEFIT YOUR FIRM?

• Author: Greene, Mark

Competitive intelligence (CI) is "knowledge and foreknowledge of the competitive environment that has been refined to the point that it can be used in making a business decision."

Actionable Intelligence, Not More Data

CI is not data. We are buried in data. Data processing can help take us from "data" to "information," yet this is only the first step. We need more than mechanical processing of data to get us to business decisions. The next step is "analysis," and that's the hard part.

Good analysis is essential to CI, but it requires a specialized and somewhat rare skillset. Solid analysis takes us from information to business insights--"eureka!" moments. Some say such analytic skills are unteachable. They are at least very hard to teach. There are CI tools (frameworks) that can help us down the analytic path. Some are as simple as a SWOT analysis, and others are more sophisticated (e.g., Michael Porter's Five Forces). While such models may provide a useful structure for analysis, they are not a substitute for insightful thinking.

A great example of how thoughtful analysis can take us from mountains of data to intelligence that drives improved decision making is presented in the book and subsequent movie, "Moneyball." As Janet Maslin of The New York Times wrote:

"The real jackpot is ... information [that] has been around for years, [but] nobody inside Major League Baseball paid it any mind. And then came Billy Beane ... who [used this information] to field a team that nobody else wanted, [and won]."

The Difference Between Competitive Intelligence and Competitor Intelligence

Competitive intelligence drives decisions that help us compete. Competitor intelligence is intelligence about competitors. Competitive intelligence includes competitor intelligence.

Is Market Research Competitive Intelligence?

These disciplines are traditionally thought of as independent. They have their own trade associations, conferences and even college courses. My favorite definition of market research is: "the systematic gathering, recording and analyzing of data relating to the marketing of goods or services."

Market research usually involves the creation/collection of data that did not previously exist via surveys, focus groups, observing buyer behavior and the like. CI is more often analysis of data that was previously collected for some other purpose (e.g., economic data, market research reports). So, one could ask, is driving down the street counting the number...