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Individuals instinctively perform analytic functions as a routine part of everyday life. An example of this is the mundane task of choosing a restaurant when going out for a meal with family or friends. Doing so initiates a thought process where we begin to analyze things like what type of food we’re in the mood for, which restaurant offers the most relaxing ambiance, who has received the best reviews and the highest ratings. The point is that consideration of this consumer sentiment helps us make more informed and thoughtful decisions.

For companies, competitive intelligence is not an entirely dissimilar process where careful thought and examination provide clear business benefits. With the dramatic increase in online customer commentary surrounding products and services, businesses are increasingly looking to extract vital intelligence that will aid in the development of their products and services. Today’s information has volume, variety and velocity – it not only originates from many different sources but it also changes rapidly.

According to Gartner, “Competitive Intelligence (CI) is the analysis of an enterprise’s marketplace to understand what is happening, what will happen and what it means to the enterprise. CI business goals may be offensive — positioning the company in the marketplace, plotting a course for future positioning, and allocating short- and long-term resources. Goals may also be defensive — knowing what is happening, what may happen and how to react.”

Inside all of this disparate information live critical nuggets that can help companies improve their business, products, and customer service functions. The challenge, and difference, between success and failure is determining how to access the data and transform it into useful information that contains actionable insights.

Organizations need to equip themselves to maintain marketplace advantage by utilizing competitive analysis tools to expose consumer sentiment and actionable insights. The point is always to enable the company and its management to make knowledgeable and cost-effective business decisions.

Organizations can become so consumed with the tedium of their internal business operations that they neglect to gain a 360° view of their industry and competitors. There is no advantage to merely “staying the course” or continuing on the same path doing what you’ve always done. Competitive intelligence serves as a mechanism organizations employ to obtain a profound understanding of what is happening in the external world; where purchase decisions are made.

Our next post will explain the specific benefits you can gain from implementing competitive intelligence.