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November 1, 2010

Competitors – how well do we really know them?

by Howard Fox Chartered Marketer

I once worked with an organisation that employed a Chief Competitor Officer. Seemed very glamorous, very “James Bond”. It was his team’s job to source intelligence about competitors’ activities and future intentions. All strictly within the law, of course. Given that it was before the Internet became nascent, his activities actually included long, unglamorous hours counting the number of rail cars of product coming off production facilities around the world.

In my experience, it is left up to marketers to tackle this issue rather than ‘Competitive Intelligence Professionals’ (see http://www.institute-for-competitive-intelligence.com) as part of the external analysis component of marketing strategy. The fundamental question is in this age of information 2.0, how much do we as marketers use the information publically available to understand our competitors?

Lets keep it simple with the four “C’s” competitive intelligence model:
Collect the data
Convert the data into usable information (or to impress call it ‘intelligence’)
Communicate the information
Counter the competitor activities identified

Collecting the data:
The web has certainly made this easier. Here are just some of the easily accessible data sources to consider:
The competitors’ websites (obviously), but also http://www.alexa.com will give the site’s ranking compared to your own and other competitors, changes in web traffic, in which country web traffic originates and how many inward links the site has. As with most data it is the trend that is more informative than absolute numbers. It has to be said that these comparisons can be affected by companies’ SEO (search engine optimisation) efforts.
The “Wayback Machine” at http://www.archive.org will show you all the changes to your competitor’s website since 1996.

Google search has so much data that volume is the biggest problem. Use the advanced search and “unwanted words” function to cut the responses down to just the useful stuff. You are unlikely to find much you don’t already know in the first few pages of results, but lower down more obscure and often interesting data emerges. Don’t forget to search images and video. Then set up Google alerts to email you as soon new data is identified. The wikipedia entry for many companies often gives away more about strategic intent than it should.

Information about the management themselves abounds online– ‘Who’s Who’, ‘Linked In’ and Facebook are treasure troves, if somewhat time consuming. They’re particularly useful for understanding relationships between individuals. Online recruitment sites sometimes give away the name of company recruiting. Statutory information is useful, e.g. Companies House in the UK (see http://tinyurl.com/5knto ). I am sure the CIPRO website could be useful for South African companies, but it was inoperable when I tried.

Back in the real world, annual reports are a mine of information on public companies (be honest now, when did you last read your competitors’ annual report cover-to-cover?) as well as the JSE’s ‘SENS’ – stock exchange news service (see http://www.jse.co.za ). Industry reports from consulting houses and industry bodies can be particularly insightful – make sure you are familiar with what is available.

Converting the data:
It’s often not access to data that is the issue so much distilling it down to competitor’s strategic intent and probably actions. Data on its own is almost valueless without well considered interpretation. Industry specific experience really counts here. While competitors’ previous actions are not necessarily indicative of future strategy, they are certainly informative.

Communicate the information:
Knowledge is only valuable once it has been shared within an organisation. Ideally there should be processes in place to both share longer-term analysis based competitor intelligence on a regular basis as well as a more tactical response to immediate issues.

Counter competitor activities:
Clearly acting on the information gathered is vital. Without a vigorous response, the drive to know one’s competitors soon wanes.

Fundamentally, in this era of virtually free information we as marketers have no excuse for not knowing our competitors intimately, and building comprehensive strategies to negate their activities – to our organisations’ strategic advantage.

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