Competitor Mapping has become an important tool in developing a robust businesses strategy. Historically, competitors were simply mapped as a demographic and not analysed forensically. The purpose of this article is to highlight the advantages of analysing your competitors in a much more comprehensive way.
What differentiates you from your competitors? What can you do, that they can’t? Depending on your industry these can be simple question to answer. Barriers may exist that prevent others from operating in your space; scarce resources, proprietary technology, expertise, regulation. In particular markets; food, retail, consumer goods, price sensitive competitors battle to secure advantage in the short term. This invariable then puts pressure on suppliers and ultimately the profit line. A more secure long term strategy is to understand the potential strategies that your competitors may adopt and develop a more appropriate longer term response that maximises the return from your resources.
In recent years Competitive Intelligence (CI) has started to emerge as a field of study. It is defined as a
systematic, targeted, timely and ethical effort to collect, synthesize, and analyze competition, markets and the external environment in order to produce actionable insights for decision-makers. It involves the collection of information on competitors from customers, suppliers, technologies, environments, and potential business relations. (Calof and Wright).
The implementation of CI in SMEs promotes the management of this process by specifically appointing people within a business to forensically analyse competitors. Most SME’s currently practice some form of this, whether it is checking a competitor’s current pricing or monitoring their actions within a specific market.
What do you look at? There are a number of components to CI and sources of relevant information .Open Source intelligence is the blanket description for all these sources of information readily available to a practitioner in the field. It is simply the assimilation of publicly available print and digital/electronic data from unclassified, non-secret, and “grey literature” sources.
The benefits of a well sourced CI function are
- Helps generate insights, predict future developments and explain implications of developments, both current and prospective, to decision makers
- provides warnings of major developments, events, trends and assessments
- can make data more meaningful and sensible
A simple framework for competitor analysis is one that covers a competitor’s strategy, objectives, assumptions and an analysis of their resources and capabilities.
The benefit to a company who actively engages in a CI process is that by analysing these categories they could make predictions about how a competitor’s strategy may change due to market conditions and also how your competitors may react to any change in yours.
If you would like to explore further how an effective Competitive Intelligence strategy can benefit your business or simply to comment on the article please don’t hesitate to drop me a mail firstname.lastname@example.org .