Competitive Intelligence (CI)- The Game Changer
The adage “knowledge is power” has never been truer than it is in today’s rapidly evolving business environment, where companies in order to remain competitive, need to constantly stay abreast of the industry dynamics.
The internet has triggered a massive explosion of freely available content, which can be used by anyone, anywhere, anytime. Companies can process and structure this data to frame good actionable insights and use it for their business gain. This has spawned the development of Competitive Intelligence.
What is CI?
According to the Society of Competitive Intelligence Professionals:
CI is the process of ethically collecting, analyzing, and disseminating accurate, relevant, specific, timely, foresighted and actionable intelligence regarding the implications of business environment, competitors, and the organization itself.
CI is essentially a process through which a firm gathers all publicly available information about the industry, competitors, regulatory environment, etc. and then uses this information to analyze the macro environment, i.e. identify associated underlying risks, uncover opportunities in the marketplace early enough to allow the firm adapt its strategy to the current market situation going forward. This helps the company adopt adequate strategies by decreasing their response time.
What should a CI study cover?
*To know further about Competitor Intelligence, you can read our other blog Competitor Intelligence – be the first mover, not a follower
Do Companies across the world invest in CI efforts?
Yes, companies across the globe engage in CI studies. According to a study conducted by the Society of Competitive Intelligence Professionals (SCIP), the majority of the Fortune 500 companies in the US conduct competitive intelligence activities.
Companies operating in North America with intelligence budgets of more than $1 million have increased their corporate intelligence program budgets from 5% to around 10% of all budgets as of 2013. This trend is also picking up in Asia and Europe, where companies with intelligence budgets of more than $2 million or more, did not exist five years ago, but today they represent 2-3% of all intelligence budgets.
Source: Survey conducted by The Relevancy Group in Jun 2016, across the U.S. region
Some industry wise stats as per the latest Fuld&Company’s Global Benchmarking Project Update:
- Pharmaceutical and biotechnology companies represent 27% of all intelligence efforts, spending more than $2 million per year.
- Traditional manufacturing and technology/telecommunications firms represent 18% of all those sectors that are annually spending more than $2 million on competitive intelligence.
- Technology and telecom firms also represented the largest single group of companies spending more than $1 million each year on this effort. This group has quietly shifted from investing almost nothing five years ago to increase their spending across all budget brackets.
Is CI legal?
All data collection activities in the CI process are legal. It should not be confused with corporate or industrial espionage, which uses unethical methods to gain an unfair competitive advantage. There is a thin line of difference between the two, while the former is legal and widely practiced globally, the latter involves data theft and sabotage in rival organizations and has serious legal implications.
Is CI important for my organization?
CI is important to take informed business decisions keeping in mind the business environment and competitor activities. This exercise helps companies, irrespective of their size and structure, to take strategic decisions. Every organization, be it a startup or a Fortune 500 company, will not have access to reliable, current market information on which it can base its strategies. Competitive Intelligence tackles this issue of lack of credible information availability.
Given the importance of competitive intelligence in providing strategic direction, intelligence budgets will increase over the next few years. However, setting up an in-house competitive intelligence department entails considerable expenditure, which small and medium organizations may refrain from. Thus, it is of utmost importance to select a trustworthy partner to drive a CI effort based on your requirements.
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If you have any further questions related to CI, whether in terms of its understanding, application, or finding a trusted CI party please free to contact our business consultants to discuss your particular query.
