Competitor Intelligence Research & Market Intelligence

 

Competitor Intelligence Research & Market Intelligence

Businesses now operate in a world in which information is more readily and publicly available than ever before.  Thanks to the development of the Internet, information on market trends, legislation, customers, suppliers, competitors, distributors, product development and almost every other conceivable topic is available at the click of a mouse.  Search engines, online libraries, company websites and other sources provide information in an increasingly plentiful, easy to find, and easy to digest way.

Even traditional forms of information provision such as libraries and publications are moving online.  All in all, information providers are responding to customer demand by making more and more information available not only online, but also in a searchable format

Market Intelligence?

Market intelligence is a term that is widely used, widely misunderstood, and often mistaken for a mysterious art requiring high-level detective work. In simple terms, market intelligence is information that is gathered for the purpose of making business decisions.  It is largely synonymous with market research, the systematic gathering, recording, analysis and interpretation of information about a company’s markets, competitors and customers.

Market intelligence can be obtained externally – by a market research and intelligence company, or by an internal department.   Once the market intelligence is obtained, it is usually managed in-house, often in an informal fashion, but increasingly with the assistance of IT-based market intelligence systems provided by technology and market research companies.

Market intelligence, competitor intelligence & business intelligence

Market intelligence is sometimes confused with competitor intelligence.  The latter is a more specific term, referring specifically to information about a particular company’s competitors.  SCIP, the Society of Competitive Intelligence Professionals, defines it as follows:

Business intelligence (BI) is also a term that is frequently used interchangeably with the term market intelligence, again incorrectly.  Business intelligence refers to all of the information used by a company for the purposes of decision-making, but tends to refer to data relating to the company itself, rather than its market environment.  BI therefore includes sales data, production data and financial data, and tends to be collected internally rather than by outside agencies.  BI is usually closely related to businesses’ KPIs (key performance indicators).

The Purposes of Market Intelligence

Market intelligence can be used to assist with more or less every decision faced by a company.  The overriding purpose of most market intelligence, however, is to help the company grow – to increase revenue, profit, or market share.  Good market intelligence can therefore have a huge return on investment - $40,000-$150,000 spent on intelligence can generate or save many times that amount in extra customer revenue or the avoidance of a bad investment decision.

Gathering Market Intelligence

Market entry and market expansion studies

Means of gathering market intelligence vary according to the objectives of the intelligence.  The first example in the table above – market entry and market expansion intelligence – is the most varied in terms of the mix of intelligence gathering methods used.  In order to gather enough good quality information to inform a decision to invest in a new market, or simply to increase investment in an existing market, the market research and intelligence firm would gather information from the following sources:

·         Potential buyers – to ascertain how much demand there is for the product/service

·         Distributors, agents and other intermediaries – to find out how to best get products and services to market, and again to ascertain how much demand there is for the product/service

·         Competitors – to find out how other companies have successfully entered and stayed in the market, and judge the market’s likely response to a new entrant

Industry experts such as journalists and industry associations – these organizations can frequently provide a quick and concise overview of the market, as well as numerous leads in the form of contact details of market players

In short, conducting a comprehensive and actionable market entry or market expansion project requires a 360-degree view of the market.

Market assessment studies are extremely similar in their approach, albeit the consultant is generally cross-checking a decision that has largely been made, rather than exploring a completely new market or opportunity.  Acquisition studies form part of the due diligence of an acquisition target, with most of the information being gathered through the following means:

·         Interviews with the acquisition targets themselves – to gauge their strategy, intentions, performance and characteristics

·         Interviews with competitors of the acquisition target – to assess their views of the company’s strengths and weaknesses as well as the strategy, intentions, performance and characteristics of the competitors

·         Interviews with customers of the acquisition target – these are arguably the most important interviews of all, as they allow us to gauge the reputation, performance  and brand values of the acquisition target, as well as pick up ‘industry gossip’ regarding issues such as the target’s financial status

·         Published information such as annual reports and industry reports

                      Suppliers and distributors to the acquisition target are generally of less use, but can provide some interesting perspectives in terms of the performance and attributes of the acquisition target.