New Concepts on Market Research

Introduction: Why Competitive Intelligence?

I’d like to provide you a guide how to do CI and what you have to consider when doing it. It is divided into 3 parts.

Every business has to deal with customers, suppliers, employees and others. In nearly every branch of trade there are many companies dealing with the same reference groups. These companies are competitors because they offer similar products to similar customers. Therefore, it is so crucial to know what the other companies, the competitors, are doing.
This fight for the same resources and territory can be compared to war! It is necessary to understand the enemy:

• how he thinks – his vision in business
• what his strengths are – I have to pay attention to
• what his weaknesses are – where is he vulnerable?
• where he can be attacked
• where the risk of attack is too great

1) Sun Tzu - Historic Competitive Intelligence: Some principles to keep in mind

Sun Tzu (400 BC- 320 BC) is traditionally believed to be the author of “Art of War”. It is a philosophy of War and is based on the Taoist thought and practice. Here some examples of this treatise, which can be directly applied on strategies for competitive Intelligence.

Chapter 1, phrase 19 & 24
19. Hence, when able to attack, we must seem unable
when using our forces, we must seem inactive; when we
are near, we must make the enemy believe we are far away
when far away, we must make him believe we are near.

24. Attack him where he is unprepared, appear where you are not expected.

Chapter 3, phrase 18, first line:
18. If you know the enemy and know yourself, you need not fear the result of a
hundred battles.

As résumé we can say “Understand your enemy so you can surprise him”.

2) My Competitors: Who are they?

Competitors are businesses which are dangerous for me now or which can become dangerous in the future.
Business competitors are:
- Other organizations offering the same product or service
- Other organizations offering similar products or services
- Organizations that could offer the same or similar products or services in the future.
- Organizations that could remove the need for a product or service.

3) The 4 C’s in C.I or the way to get to real Competitive Intelligence

There are four stages in monitoring competitors:

• Collecting the information
• Converting information into intelligence
• Communicating the intelligence
• Countering any adverse competitor actions – i.e. using the intelligence.

At First:
Think how you want to use the information about a competitor before collecting it. Because collecting and gathering information costs time, money and effort. So, before starting to search for information you will need to sit back and define what you are looking for and why. Then identify the key areas of concern for your business.

Here some examples why companies are collecting information:
• “The business may be planning a new product – so information on what competitors are doing in the same area will help in the decision processes and plans for this new product.
• Alternatively, the business may be looking at how the industry will develop over the next 5 or 10 years.
• Or perhaps the board is looking at a potential merger, acquisition or business partnership.”

3.1. Collecting the information
Information can be found in two different kinds of sources: internal to your company and external to it.

Some examples where the information can come from:
• Sales representatives (customers)
• Research & Development (new patents)
• Purchasing (suppliers)
• Market research (feedback)

Search in the internet:
Online CI Tools
Online CI Databases as D&B, Hoovers

3.2. Converting information into intelligence

As a result of collecting information you should then have a large pile of data on your competitors.
Unfortunately much of this data will be repetitious, out of date, wrong or inaccurate, misleading, or incomplete. However it will give you an idea how your competitor is acting on the market.
The information will then need to be indexed and catalogued and at the end each piece of information needs to be interpreted and analysed. This is where information starts to become intelligence.

3.3. Communicating the intelligence

Competitor intelligence needs to be evaluated and selectively communicated to all who need to make decisions based on what customers, suppliers, or other companies in the market are doing or are likely to do.

3.4. Countering competitor actions

“Having identified what competitors are doing, battle can be entered. Sometimes the battle will be vicious – especially when two competitors have been slogging it out for years. Various military strategies have been used to describe different approaches to beating competitors – flanking strategies, encirclement and siege strategies, frontal attacks and even guerrilla marketing tactics.” However it should always be conducted ethical and within the law (for example SCIP Code of Ethics USA)

Sources:
http://www.marketing-intelligence.co.uk/resources/competitor-analysis.htm
http://en.wikipedia.org/wiki/Sun_Tzu
http://www.chinapage.com/sunzi-e.html