Carol Tallon - Competitive Intelligence: The Key to Strategic Advantage: A Guide for Small Business Owners

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From a graduate background in law and business, Carol Tallon became the managing director of Buyers Broker Ltd., Irelands only property buyers agency franchise, in 2006.

Carol is best known for her regular articles, media and radio features as the Irish property buyers champion and is the author of the Irish Property Buyers Handbook 2011, the essential guide to buying residential property in Ireland.

Carols passion is for niche businesses and she is a speaker and panellist on the topics of entrepreneurship, competitive intelligence and business strategy.

The first introduction most businesses have to their competitors is at the planning stages of setting up a new venture. Businesses tend to start up because of, or in spite of, competitors either no-one else currently offers the product or service in the way a new business owner envisages or perhaps the market is so buoyant that it encourages more entrants.

Although every business plan should feature a competitor analysis, most give details that rarely exceed website or promotional blurb together with any recent press or media coverage. Even where deeper research has been conducted, this information rarely is used effectively to influence the strategy of the business going forward, which is the very purpose of its inclusion.

The aim of competitive intelligence (CI) is to enable and encourage business owners to take this research further, through the standard SWOT analysis right through to the formulation of a relevant, market-specific strategy in the short, medium and long term.

Business owners must find out what information is legally and ethically available to them through a variety of sources and what this information actually means. The next step is to turn that information into intelligence that can be used to influence the strategic direction of their own business with the sole aim of achieving a position of advantage over competitors. The key to successful CI is the businesss ability to manage that CI going forward and to integrate it into all aspects of planning.

A further consideration for businesses is how to control their own company information that is accessible to their competitors. In the course of the everyday marketing and promotion of a business, commercially-sensitive information often is compromised. In order to deprive competitors of any avoidable advantage, a business must plan or, at worst, be aware of, what information will be made available so that it can manage that information effectively.

Competitive intelligence may be defined as that actionable information a company collects and uses about its competitors in order to achieve an advantage within the marketplace.

In practice, it is best referred to as a process: the process of researching, analysing and, most importantly, using intelligent data from any available information sources with the aim of outperforming competitors.

Simply finding information, however interesting or relevant that information might be, is not enough. In discussing competitor strategies, Michael E. Porter points out that awareness of competitive forces can help a company stake out a position in its industry that is less vulnerable to attack. This implies that competitor intelligence is necessary not only for businesses to thrive but also to survive.

In practical terms, any business intending to engage in CI activities in a formal way should follow these simple steps:

• Step 1: Determine exactly what competitor information is required, depending on the particular industry or market and the stage of the business. For instance, different information will be required at start-up or early stages rather than when developing add-on products or services.

• Step 2: Look to the sources most likely to yield the specific information sought. For instance, to identify the number of competitors in the marketplace, trade magazines and on-line Google searches should be sufficient; however, if information is required about new technological advances, a patents-pending search and perhaps some sophisticated media monitoring might be needed.

• Step 3: Study the information and analyse each piece in order to create a full picture of the competitor. This often is the most difficult and potentially frustrating step of the CI process. Like a jigsaw with a few missing pieces, logical and intelligent assumptions must made to gain as complete a picture as possible from the available pieces.

• Step 4: Communicate the findings to everyone within the business who needs to be aware of it: the business owner, sales staff, management, anyone who is involved in making strategic business decisions.

• Step 5: Use the information uncovered to draw conclusions about the commercial activities of the competing business as part of ongoing strategic planning and decision-making. Without step 5, all of the other steps are merely an interesting waste of a companys time.
  

The core role of CI is to enable the researching business to learn enough about its competitors business activities to determine, change or re-affirm the strategic direction of the company.

One of the outcomes of this process is that the researcher also learns a lot about the industry and the immediate market. For example, finding out that customers are unhappy with a competitors three-week order-to-delivery period tells the researching business that it may be able to gain an advantage by cutting that waiting period.

One of the primary goals of any successful business and thus of CI must be to achieve a sustainable competitive advantage. Accidental advantage may happen but it is not enough beyond the very early stages of a business. Advantage is relative the benefit to the researching business must lift it to a position of superiority when compared with competitors.

The benefits of the CI process for any business depend on the level and focus of the research undertaken, the information found, the conclusions drawn and the strategic action taken as a result.

When implemented effectively, the principal benefits of CI are:

• Competitive advantage: The main advantage (and ultimate aim) of CI, when done successfully, is that it results in a sustainable strategic competitive advantage for the researching business. In terms of analysis, it identifies opportunities as well as threats within the marketplace. This can be seen in countless ways for example, if the researching company has a growth strategy that is centred on new product development, information that helps beat a competitor to market has clear benefits.