Competitive Intelligence: Components of Market Awareness
The issues that will likely confront your senior management likely centre around the following areas:
A. Clients and Competitors
Senior management will be concerned about keeping key clients. Keeping in mind Pareto’s Law (the 80/20 rule), it is likely that 20% of your clients represent 80% of the revenues. In some cases the ratio is more extreme. Therefore, it is essential to know how changes to the economy (including globalization), technology, demographics, are effecting your clients. Is your company keeping up with the changes your key clients are facing? What are your competitors doing to challenge your standing in the eyes of your key clients?
Another thing to keep in mind: Are some of your key clients losing the battle against foreign competitors or the changing economy, and are thus facing extinction? Are you missing opportunities to develop relationships with growing companies that could potentially be key clients of the future?
B. Products and Services
What are the key specifications to your products, services, price points that attract and keep your best clients? What are your main competitors doing to challenge your company? Are there any developing technologies or new competitors that could disrupt your industry? Are your products and services competitive enough to enter new markets?
Also, there may be alternatives to your products and services that you may not be aware of but have been successful in other parts of the world. Do you have the capability of understanding what is happening elsewhere without having to wait for the English or French translation?
C. Growing and Dying Markets
Markets, whether domestic or foreign, are in a constant state of flux. Increased prosperity in one segment or sudden immiseration elsewhere can disrupt your company’s revenues if your company makes the wrong decisions.
In extreme cases, companies may need to change their business model beyond recognition in order to grow and prosper. Nokia (which started as rubber and heavy cable manufacturer before transforming into a wireless telecommunications giant) and 3M (which started off as a mining company and manufacturer of sandpaper) are two well-known examples.
As a CI Manager, you should be aware of growing markets overseas and developing market segments in your home country. This will enable you to be an advocate for product and service innovation to profitably serve those markets. You should also be aware of declines in markets as well, so that you can be an advocate for extricating your company from developing products and services (and markets) that will not bring in sales revenues.
As a CI Manager, you should be ready to take an active role in developing a deep understanding of existing and potential clients and competitors; current and emerging markets; and the current and developing products and services that can attract important clients. Competitive Intelligence is based on hard facts, common sense and an awareness of opportunities and dangers.