Competitive Intelligence in practice — expose your competitors’​ strategy

 

Competitive Intelligence (CI) is all about studying your direct competitors and understanding their strategy to elevate your competitive edge.

The first principle of studying your competitors is to do anything you can, as long as you keep an ethical approach. That is, stay on the right side of the law.

An ethical approach to know your competitor aims to reveal and expose its nerves by legal methods.

What are the nerves we can expose to understand our adversaries? In this article, I intend to talk about what I believe, are the most indicating nerves of any competitor.

1. HR aspects — recruiting and lay-offs.
2. Portfolio aspects — new and dismissed products
3. Branding — new campaigns.
4. High Management and company structure — changes.
5. Finance — venture capital measures, finance infrastructure, and capital raisings.

All of the above are usually transparent, and can easily be collected. I claim that by an ongoing process of collecting and monitoring, events, and data that is out there regarding these five nerves, we can gain a good grasp of our adversaries’ competitive behavior.

Here are some examples of each of the mentioned nerves;

1. HR aspects — by monitoring new recruitment campaigns, and analyzing the new positions descriptions, we might detect changes in the technology used by our competitor, either new technology or enhanced known technology. We might also learn about growth and production volume, from new PM positions. By the same logic, if we monitor lay-offs, we might detect structural changes or dismissed technology.
2. Portfolio aspects — new products and a wider portfolio might indicate a new market our competitors got into, or maybe they want to enlarge their market share at our expense. At the same time, detecting products that came off the market might indicate a liquidation of a unit, failure of technology, etc.
3. Branding — much can be learned by analyzing the nature of the branding campaign. It begins with no campaign at all, and in the extreme, it can get to a high profile all-media expensive campaign. There is a difference between a new branding campaign that might indicate a new market and a re-branding campaign that might indicate that the company is struggling to stay in the market and allocated a special budget for this effort.
4. High Management and company structure — who is leading the company, whose vision does the company follow, and who are the top-ranked managers aside the leader. We need to do profiling research and try to characterize each one of the decision-makers in the company. Their professional background, successes, and failures. We need to know what kind of hierarchy goes in the company. If the COE is new, and at the same time the company opened a new position of VP in marketing, it might indicate that the directorate of that company wants to strengthen the market muscle with a new VP, to assist the CEO with his weakness in this area.
5. Finance — capital, venture capital, financial measures, and money raisings are usually common knowledge in the case of public companies. It is harder to guess this data in the case of private companies, but even then, we can find them in reports, researches, etc. Raising money can indicate preparing for a big investment, either in new technology or a patent, or real estate purchase. It means that the company has a strong belief that it has a competitive advantage now, and with new capital, it can leverage it to the top. In other cases, like when the company fails to pay dividends to all shareholders, it might mean that some investments turned bad, and the company’s reserves got hit.

To sum-up at this point, I argued that among a long list of things we can do to study our competitors, gather information, and produce operational insights to help our company better compete, there are what we can call strategic-nerves. By monitoring them constantly, we can expose them and understand the strategy of our competitors. In the human body, nerves are transmitting information to and from the brain, so is the case in a company. Changes in HR, portfolio, branding, management, and finance reflect the current strategy of the company. By accumulating all changes in the strategic-nerves we might get an understanding of the ruling strategy.

In this next example, we will try to understand the concept of accumulated changes in the strategic-nerves.

Strategy: Dominate the market. Gain the biggest market-share.

1. HR aspects — recruit new salesforce and marketing employees, enlarge the BI team, and recruit DS professionals.
2. Portfolio aspects — increase the variety of existing products (size, color, wrap..). Adjust your products to as many segments as you can identify in your market.
3. Branding — based on the latest segmentation, launch several re-branding campaigns to meet the needs and preferences of as many segments you can identify in your market.
4. High Management and company structure — strong sales and marketing managers, open new facilities nationally spread.
5. Finance — prepare for a vicious price-war with your competitors. It is time to check reserves and maybe raise new capital for the short-mid-term.

To sum-up, Competitive Intelligence needs to be a built-in process in every company that plays in a competing market. The rules of the game are simple; find your competitive edge and build your strategy to support it. At the same time, explore your direct competitors and try to expose their strategy, hence competitive edge, by exposing their strategic-nerves.

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