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Gathering Competitive Intelligence Ethically

man researching on a computer

A common misperception is that “competitive intelligence” is synonymous with “corporate espionage.”  

Nothing could be further from the truth.  

Corporate espionage is an illegal activity where companies steal valuable information from their competitors in order to gain a competitive advantage.  It may involve tactics such as wiretapping or hacking into proprietary systems to gain unauthorized access to private information. In contrast, competitive intelligence is a legal and ethical activity that uses publicly available information to gain insight into a company’s capabilities, strengths and weaknesses, performance, and general approach, which can then be used to develop likely competitor strategies in a given competition. Competitive intelligence is a widely-used and valuable business practice that leads to developing customer-focused and competitor-countering strategies that improve a company’s probability of a win.  

With that said, it is important to understand the legal and ethical boundaries of competitive intelligence, so that your company will remain above reproach in all of its competitive intelligence efforts.  Following are a few best practices to keep in mind when gathering competitive intelligence:

Define Ethical for Yourself & Your Company

Ethical boundaries are ultimately determined by the customer. For example, in the federal contracting space, the customer is the US government. Because the US government is funded by the American taxpayer and is therefore accountable to them, federal agencies are obligated to ensure that the way they use their allocated dollars is completely fair and free of any fraud, waste, or abuse. This results in a very high standard for what is ethical. Other industries and other countries, however, may have different ethical standards. That’s why it’s so important for you to determine what your company’s definition of ethical is and direct everyone at all levels of the organization to follow those standards. 

Develop a Culture of Ethics and Integrity

Be careful to avoid any ethical gray areas so that you can avoid being removed from a competition because of a real or perceived breach of ethical boundaries. As you collect competitive data, make notes about where you found it. It could be important in the future in case you need to prove that it did not come from a protected source. Talk frequently and openly inside your company about the safe sources to tap for information-gathering and ways to steer clear of any ethical danger zones.

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The Framework of Competitive Analysis

Competitive analysis can be a daunting task.  At Richter & Company, we believe strong, reliable processes build the foundation and framework for sound, defensible analysis.  Competitive analysis can be broken down into three parts:

Business Intelligence forms the foundation of competitive intelligence.  It focuses on quantitative numbers, like financial metrics and number of units produced.  Business intelligence consists of solid, irrefutable data points that define a company.

Competitor Intelligence lays out the framework for analysis.  It is made up of quantitative data (business intelligence) and qualitative data.  While quantitative data defines, qualitative data describes.  Capabilities (general and specific), relevant news and identified past performance help characterize a company as qualitative data points.  We can define ‘competitor intelligence’ as information specific to a single competitor.

Competitive Intelligence enhances competitor intelligence through inclusion of environmental factors (political, economic, social, etc.).  Experienced analysts help determine how these external factors will affect the competitor intelligence gathered.  Companies can then be assessed against one another in some kind of objective evaluation, mimicking the source selection board decision-making process.

Richter & Company has been using this framework for competitive analysis to help clients win more than $30B in new business since 2006.  To find out we can help you win, contact us today.

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SWOT to Strategy

Many companies include the SWOT chart as part of a competitive intelligence presentation.  They spend a lot of time preparing the strengths and weaknesses, opportunities and threats, and creating a beautiful image.  And… that’s it.

SWOT charts were designed to be springboards for creating strategies.  What products or services will the company leverage?  How will they differentiate their offering?  What story will they tell?  What are their weaknesses?  Are they aware of them?  How will they mitigate those weaknesses?  How are they perceived by the outside market?  What kinds of opportunities and threats exist outside of the company’s control?

Strengths identified in other companies should give you incentive to bolster your own solutions.  If your solution is not as capable, or desirable, should you be bidding?  Opportunities allow you to assess how your own company will be viewed, and where you can maximize play in a potential marketplace.

Weaknesses and threats can be turned into ghosting opportunities.  How can you capitalize on potential (or perceived) risk?  How can you differentiate your own offering to highlight an area of weakness in another solution?

SWOTs can be extremely valuable tools, if they’re used correctly.  Contact Richter & Company today to find out more about positioning and strategies that help you win.