Competitive Intelligence by Functional Area

Corporate Strategy -- The smaller the business unit (and the smaller the competitors, and industry sectors), the more critical is competiitve intelligence for making sound strategic decisions.  Competitive intelligence (CI) augments an internal understanding of the competitive landscape, competitor capabilities, and most importantly, competitor intentions.

Competitive Strategy -- Since strategies and tactics roll down from a corporate goal or objective, it is important to understand that core goal as a starting point.  Does the competitor want to focus on growth or profitability?  Is it concerned about quality or service or price leadership?

Financial Strategy -- Financial strategies and intentions related to balance sheet decisions can be uncovered, as well.  These discoveries are helpful in developing an assessment of the owner’s commitment to the business over the long-term.  Where is the owner investing?  How much is the owner willing to risk today in order to generate future cash flows?

Product Strategy -- Since product strategy is all about differentiation, we seek input on just that – how the competitor perceives its products or services to distinguish themselves in the marketplace.  Not just existing products.  New ones, too. 

Brand and Communications Strategy -- There are four main promotional tools available to any company (advertising, personal selling, sales promotions, and publicity).  Which one does the competitor focus upon?  And what is the core theme, main idea, or message that permeates customer communication efforts of the organization? 

Distributions Strategy -- Distribution strategies involve planning how to pass the product from organization to organization, entity to entity, until it reaches the final destination, the end-customer.  We can diagram what percentage of sales go through each channel of distribution (distributors, wholesalers, dealers, manufacturer’s reps, direct sales force).  Even starting at the point of sale, one can determine how the customer interface works, how orders are placed, and how orders are fulfilled.  When we study distribution, we look for the current state of reality in how products are distributed, and we look for the intended future state, as well.

Sales strategy -- The sales strategy reveals the core sales steps being taken to achieve the corporate goal.  If the goal is to become the easiest player to do business with, what are the steps the sales organization is taking to make that goal happen? Who are major accounts, and how does the competitor select key customers? 

The sales breakdown by market served helps shed light on the Company’s priorities and successes.  We can also determine the breakdown between domestic and foreign sales.  It can be helpful simply to ask salespeople, who are often highly opinionated, where the company’s priorities lie.

Pricing strategy -- When a competitor prices its products or services, it may have one of a number of possible goals in mind:  profit maximization, revenue maximization, quantity maximization, price leadership, etc.  Depending on the goal in mind, it may select from a range of possible pricing strategies:  competition-based, cost plus, creaming/ skimming, loss leader, market oriented, penetration, dynamic, target, etc.  We are able to determine which goal and which strategy a competitor has selected.

Operations strategy -- Operations ties directly into the corporate goal, of course.  For example, if the goal is to be known as the low-cost and low-price producer, what specific actions are happening in operations to drive costs down?  What are the operations strategies to achieve the corporate goal?

An interesting place to dig deeper is the value chain.  What value-added steps occur where, before reaching the customer (e.g., degree of manufacturing integration, utilization of unique materials, utilization of unique or proprietary processes, etc.)?

While facilities and labor do not tie directly into intent (corporate goals and strategies), the make-up of the facilities and labor force can reveal capabilities. For example, learning about the age, condition, and equipment utilized in a manufacturing plant can help assess production capacity. 

R&D and Innovation Strategy -- The innovation or R&D strategy reveals the steps that the R&D department is taking to ensure it carries out the goal of the corporation.  What is the area of focus or emphasis for R&D (e.g., true innovation and novel concepts, updating of existing products, value-added features and benefits for existing products).  The origin of the competitor’s R&D focus and activities may be internally driven programs, customer/market demands and unmet needs, competitors’ activities, etc.  Our role is to determine not only what the source of the R&D focus is, but what the emphasis and strategies truly are.