Competitive Intelligence

There has been a longstanding debate over which research methodology is best, traditional market research (quantitative/qualitative) or Competitive Intelligence. Market researchers and CI people tend to support one methodology over the other. Taking into account that your view may be biased towards one methodology over another, how would you resolve this debate?

This writer has been to conferences where speakers declared that a CEO should not make a decision unless the VP of Market Research signs off on the decision and other conferences where speakers declare that the VP of Competitive Intelligence should sign off on a decision.

There has been a realization that such absolutism overlooks the needs of the end-users, the decision-makers who depend on research findings to make critical decisions affecting their companies.

As a result there has been an evolution towards the idea that the objective is to provide key insights and actionable intelligence to decision-makers in the most cost-effective research methodology possible. This is often dictated by turnaround time, budgetary constraints, and complexity of the research required.

What Research Is Required?

First of all, any research requirement from an internal client should be in writing, detailing what information is required, how this information is to be used and why. Having the research request in writing ensures that the client requesting the information will take responsibility for the expenditure of time and money required to conduct the research and that such expenditure will not be on frivolous, flavour-of-the-week issues.

Identifying the Most Cost-Effective and Timely Research Method

Whether there is an economic downturn or not, careful consideration should always be given regarding the most cost-effective way of obtaining the information requested, whether in terms of time, money and company resources.

For example, there are some types of information, such as customer satisfaction, consumer decision-making and market share that can be best achieved through traditional market research. The decision then becomes whether to spend money on custom research or buy research that already has been completed and is available for sale.

If there is a need to understand the business practices of competitors or to gauge how a new technology would impact your industry, then Competitive Intelligence would be the best methodology. Primary data gathering is best for CI, but secondary research can be used to provide leads or fill in any information gaps.

If there is no budget for primary research, then the services of the corporate librarian would be invaluable in uncovering the best possible secondary research available.

Conclusion

Whether your most favoured research methodology is Competitive Intelligence or traditional Market Research, you must never lose sight of the fact that the interest of your internal clients is what is most important. You should be open to the idea of using the most appropriate research methodology to meet the information needs of your internal clients and, ultimately, your company.

With a period of economic correction upon us, the use Competitive Intelligence is now more vital than ever in helping companies to prepare for changes in their industries, to be proactive instead of reactive, to and exploit opportunities before their competitors, and to put themselves in a position of strength in time for an economic upturn.

Mergers and Acquisitions

A financial services provider was concerned that two of three competitors were likely to merge. It was imperative that they know ahead of time which two were going to merge so that strategies could be put in place to counter the new threat. The CI manger spoke to a number of senior executives along with frontline personnel, to find out about the competitors’ customer base, growth trends, business styles and even the personalities of the senior executives.

The CI manager was able to determine that the two competitors whose CEO had the most in common (club memberships, interests, educational and career backgrounds) were the ones most likely to join. From there the CI manager provided recommendations to counter the imminent threat before the actual merger took place.

Strategic Partnerships

A global telecommunications company was seeking information on a US-based company perceived as a potential strategic partner. There were concerns among key decision-makers, however, that the company in question was not financially sound. Interviews with the company’s Sales, Legal, Finance and Customer Service as well as clients and industry experts indicated that this company was actually in worse trouble than first believed, because its technology had failed to meet expectations, resulting in a substantial number of dissatisfied clients and shareholders. As a result, the global telecommunications company decided not to go ahead with the partnership, thus saving itself much embarrassment.

Conclusion

Competitive Intelligence is essential in strategic decision-making, both in making the right decisions but also in avoiding making bad decisions. And in difficult economic times, the margin of error between success and disaster is a fine one. The networking, data gathering and analysis that are part of Competitive Intelligence are critically important and the use of Competitive Intelligence is often the difference between success, industry-leading companies and the also-rans.