Learn something new every day
More Info... by email
There are several different methods of conducting competitive intelligence analysis. Some popular methods include doing a strength, weakness, opportunity, and threat (SWOT) analysis; determining market share; and profiling individual competitors. The overall goal is to decide which areas an organization can improve in order to become more competitive in its industry.
A SWOT analysis can be an effective way to start the process of competitive intelligence analysis. It provides an overview of a competitor which, when compared with other organizations, can reveal a great deal about how each company is positioned. Understanding the strengths and weaknesses of a competitor can help an organization to improve its own best practices and find ways to get an edge in the market. By determining the opportunities and threats that face competitors, an organization can gain insight into the overall industry environment and the specific characteristics of individual companies.
When conducting competitive intelligence analysis it can be useful to have a profile of each competitor. This system tends to be most effective when the same template is used in the preparation of each profile. The SWOT analysis can provide a strong starting point for competitor profiles. From that base, an organization can delve more deeply into the past and present activities of a company. The goal is to determine why the company is positioned as it is, so that the organization can develop a strategy to exploit that competitor’s weaknesses and address their strengths.
Another way to conduct competitive intelligence analysis is to determine the market share of the organization and its competitors. Once this has been established, an organization can analyze the activities collected in its competitor profiles in order to find out what actions lead to each competitor’s market position. By comparing successes and failures, an organization can create a strategy for taking more market share.
Once an organization has analyzed competitive intelligence, it should have the tools to create a strategy to improve its market share. It will typically know where it can compete and which areas are best left to the competitors. The organization may also have some insight into which areas it can invest in to gain an edge over its competitors. A thorough analysis will usually also reveal how competitors may be able to gain an advantage over an organization. By understanding potential threats, it is easier to formulate a plan to protect the company and enable it to thrive.
@everetra - In some cases, they don’t conduct competitive analysis, and in other cases, they simply don’t think outside the box enough. If you are selling a product like a Kindle Reader for example, you’ve built up quite a niche for yourself.
Maybe no other device like it on the market can compete with you. But what if a company like Apple creates a tablet device? What if that tablet device does everything that your Kindle can and more, for about the same price?
These are the things that take people by surprise. I don’t think it’s easy to recognize threats, especially in the technology industry, but you just have to stay alert and realize that your competitors will always try to find a way to eat a bigger piece of the market share – including your piece too.
@Charred - I love hearing stories about why one business succeeded where another business didn’t, and why.
In business, you have to constantly adapt. Microsoft, as one example, learned this lesson in the late 1990s. They were late in the Internet game and the browser wars, so they had to jump on the bandwagon in a hurry.
It’s still up for debate whether they are leading in that arena yet, or whether the new players on the field have surpassed them.
This was the case of a threat that blindsided Microsoft. Why do you think it is that some companies don’t recognize the threats that are waiting in the wings, ready to gobble up their business without their knowing it?
A friend of mine is in college taking a marketing class. One of his projects is to do a SWOT analysis on some retail establishments and give a report to the class.
He’s been sharing his research discoveries with me, and it’s fascinating. He’s focused on comparing two well known fast food establishments with a worldwide presence.
In the area of the opportunities, one of these establishments has opened up stores in some countries overseas. That’s an opportunity and a weakness however, since there is not a lot of beef consumption in one of these countries.
So the restaurant chain adapted by creating a new menu that reflected the tastes of the indigenous peoples. It was still fast food, in terms of convenience and price, but it was completely national in taste. They have done very well in that nation.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!