Competitive Analysis - What's really going on?

The lion was asked why he was the king of all the beasts. He replied, "Because I can roar the loudest, and when I roar, everyone else is silent." At that point, the thrush stood up and said, "That may be true, but if we go a mile or so from where you are roaring, your roar is not heard. However when I begin to sing, all the birds chirp along with me and the whole forest is filled with song."

The Talmud

“What is competitive intelligence?


Competitive intelligence (CI) is the process of monitoring the competitive environment and analysing the findings in the context of internal issues, for the purpose of decision support. CI enables senior managers in companies of all sizes to make more-informed decisions about everything from marketing, R&D, and investing tactics to long-term business strategies. Effective CI is a continuous process involving the legal and ethical collection of information, analysis that does not avoid unwelcome conclusions, and controlled dissemination of actionable intelligence to decision makers.

Why is CI important?


The pace of technological development and the growth of global trade mean that today's business environment changes more quickly than ever before. Executives can no longer afford to rely on instinct or intuition when making strategic business decisions. In many industries, the consequence of making one wrong decision may be to see the company go out of business.

Society of Competitive Intelligence Professionals”

Competitive intelligence (CI) is of crucial importance in new marketing initiatives and product launches. It’s a part of our service that almost every technology client asks us to undertake.

What’s interesting to us is how often a business’s perception of its competitors is founded on a mythical assessment rather than on fact. In a recent assignment we were asked by a massive IT client to research X and Y Corporation’s activity in Z area. Z was important. They were investing hundreds of millions of dollars in a new technology concept. It transpired that X and Y Corporation had no offerings in Z and did not intend to develop in the area (at that particular time). Nevertheless its sales force believed that X and Y were competitors and planned their sales campaigns accordingly. Their activities were based on nothing but hearsay and folklore. Consequently, their “competitive marketing and positioning” was flawed. It happens. CI was vital to our client as it informed them as to who their real competitors might be and what their offerings what might look like. It guided them to develop their own solution to achieve thought leadership and attract the attention of analysts who had previously regarded them as non-players. CI really works.

But don’t let competitive activities guide your own. Lead and don’t follow. Your first goal is to satisfy your customers. It’s what they want and think that matters more. Focusing on competitors tends to stifle innovation. It also encourages “me too” marketing that ultimately focuses on costs rather than better ways of serving customers. Competitive Intelligence is important but it’s not the Holy Grail.

Competitor-based marketing frequently makes claims like “We can provide it, it’s of higher quality, it offers more functionality than Y Corporation and it’s at lower cost.”

There are some real dangers here. We’ve done competing on costs that leads to convergence, poor differentiation and commoditisation of supply. Enough said about that one. Quality is not an attribute of a product; it’s a customer perception of utility. And that increased functionality presents a dangerous trap. More often than not, it leads to over-specification. Over-specification means increased engineering and production costs and takes attention away from the customer again. Believe us? If not, think about the massive functionality on your mobile phone. The writer’s phone has an FM radio. Does yours? Ever listened to it? Who listens to FM radio on their phone? Whose idea was that?

The interpretation of CI is what counts and first, it presents an important opportunity to take stock of where exactly you stand in a market. The advantage of using Rocket Fuel comes from its independence and its intelligence. We have no axe to grind and we’ll tell it like it is. We won’t filter information and present it in a way that suits your company purpose. We’ll enable you to make real plans based on what’s actually going on in the market.

The next step is to put our grey matter to work, not simply to see if you can do better than a competitor, but to work out if there’s real scope for innovation to produce a different value curve that improves your buyer appeal and provides real marketplace differentiation.

We also encourage our clients, not only to look at what their customers want, but also what their non-customers want. It’s new customers that drive growth. Customer retention is crucial but it’s not the be all and end all of growth, nor is it an indefinite source of growth. As well as looking at your competitors, there are other interesting sources of information that may present valuable growth opportunities. Looking across other industries for applicable business models might provide valuable insights that can be put to work profitably within your own industry. Where do you believe the idea of the first budget airline came from? The airline industry? We doubt it.