Competitive Intelligence: Definition, Types, and Uses (2023)

What Is Competitive Intelligence?

Competitive intelligence, sometimes referred to as corporate intelligence, refers to the ability to gather, analyze, and use information collected on competitors, customers, and other market factors that contribute to a business's competitive advantage. Competitive intelligence is important because it helps businesses understand their competitive environment and the opportunities and challenges it presents. Businesses analyze the information to create effective and efficient business practices.

Key Takeaways

  • Competitive intelligence refers to the ability to gather and use information on factors that affect a company's competitive advantage.
  • Organizations analyze collected data and information to develop effective and efficient business practices.
  • Competitive intelligence can be classified as myopic-oriented, tactical intelligence, or long-term focused strategic intelligence.
  • Gathering data and information is more complex than conducting a simple Internet search.
(Video) Competitive Intelligence By Arthur Weiss

How Competitive Intelligence Works

By definition, competitive intelligence assembles actionable information from diverse published and unpublished sources, collected efficiently andethically. Ideally, a business successfully employs competitive intelligence by cultivating a detailed enough portrait of the marketplace so it may anticipate and respond to challenges and problems before they arise.

Competitive intelligence transcends the simple cliché "know your enemy." Rather, it is a deep dive exercise, where businesses unearth the finer points of competitors’ business plans, including the customers they serve and the marketplaces in which they operate. Competitive intelligence also analyzes how a wide variety of events disrupts rival businesses. It also reveals how distributors and other stakeholders may be impacted, and it telegraphs how new technologies can quickly render invalid every assumption.

Within any organization, competitive intelligence means different things to different people and departments. For example, to a sales representative, it may refer to tactical advice on how best to bid for a lucrative contract. To top management, it may mean cultivating unique marketing insights used to gain market share against a formidable competitor.

The nature of competitive intelligence varies for different companies, depending on the industry, circumstance, and a host of other factors; for example, companies that are impacted by politics and laws might require information about statutory changes that could affect the company's operations.

(Video) Competitive Intelligence: A Data-Backed Overview

For any group, the goal of competitive intelligence is to help make better-informed decisions and enhance organizational performance by discovering risks and opportunities before they become readily apparent. In other words, competitive intelligence aims to prevent businesses from being caught off guard, by any oppositional forces.

Types of Competitive Intelligence

Competitive intelligence activities can be grouped into two main silos: tactical and strategic. Tactical intelligence is shorter-term and seeks to provide input into issues such as capturing market share or increasing revenues. Strategic intelligence focuses on longer-term issues, such as key risks and opportunities facing the enterprise.

(Video) What is Market Intelligence?

In either case, competitive intelligence differs from corporate or industrial espionage, which relies on illegal and unethical methods to gain an unfaircompetitive advantage.

Special Considerations

While most companies can find substantial information about their competitors online, competitive intelligence goes beyond grabbing such easily accessible, low-hanging fruit. Only a small portion of competitive intelligence involves trawling the Internet for information.

A typical competitive intelligence study includes information and analysis from various disparate sources, including the news media, customer and competitor interviews, industry experts, trade shows and conferences, government records, and public filings. But these publicly accessible information sources are mere starting points. Competitive intelligence also encompasses investigating the full breadth of a company's stakeholders, key distributors, and suppliers, as well as customers and competitors.

For proof of the growing importance of competitive intelligence, look no further than the creation of the Society of Competitive Intelligence Professionals (SCIP), founded in the US in 1986. This global nonprofit group comprises a membership community of business experts across industry, academia, and government, who regularly congress build out intelligence infrastructure, share research decision-support tools, and advance collective analytical capabilities. This group, renamed “Strategic and Competitive Intelligence Professionals” in 2010, holds several national and international conferences and summits each year.

(Video) What is Competitive Intelligence ?


What are the types of competitive intelligence? ›

Competitive intelligence can be classified as myopic-oriented, tactical intelligence, or long-term focused strategic intelligence.

What is the meaning of competitive intelligence? ›

The definition of competitive intelligence (CI) or competitor intelligence is the process in which a company gathers and analyzes information about its industry, business environment, competitors, and products with the goal of directing their future strategy.

What are the uses of competitive intelligence? ›

Competitive intelligence is necessary to help businesses understand their business environment, challenges, and the opportunities present in this space. The information gathered can be used to set up efficient business practices and standards for your business.

What is a competitive intelligence example? ›

The airline industry is a perfect example of how to use competitive intelligence wisely. Every day, airline companies change flight ticket prices based on external information. For instance, if you're running an airline and your competitors increase pricing for a certain route, you will quickly do the same.

What are the four 4 types of competition? ›

Economists have identified four types of competition—perfect competition, monopolistic competition, oligopoly, and monopoly.

What are the four 4 different types of competitive advantages? ›

The four primary methods of gaining a competitive advantage are cost leadership, differentiation, defensive strategies and strategic alliances.

What is the best definition of competition? ›

1. [noncount] a : the act or process of trying to get or win something (such as a prize or a higher level of success) that someone else is also trying to get or win : the act or process of competing.

What are the main components of competitive intelligence? ›

The main components of competitive Intelligence are competitor analysis, market analysis, and SWOT analysis. By understanding your competition and the market you operate in, you can make more informed decisions that will help your business succeed.

What is competitive intelligence quizlet? ›

competitive intelligence (CI) a systematic program for. gathering and analyzing information about your. competitor's activities and general business trends. to further your own company's goals.

What are the three main types of competitive advantage? ›

There are three main types of sustainable competitive advantage: differentiation, cost leadership, and focus advantage.

What are 5 ways that you can gather competitive intelligence? ›

How to Conduct Competitive Intelligence Research
  • Identify your competitors. ...
  • Set objectives. ...
  • Determine data collection strategies. ...
  • Gather and analyze your data. ...
  • Relay insights to key stakeholders. ...
  • Stay within legal limits. ...
  • Be ethical. ...
  • Share insights often.
Mar 11, 2021

What are the three sources of competitive intelligence? ›

8 sources of competitive intelligence
  • Your competitors' websites. Unsurprisingly, your competitors' websites are a robust resource when it comes to gathering CI. ...
  • Social media. ...
  • Your customers. ...
  • Your competitors' customers. ...
  • Your competitors' employees. ...
  • Your colleagues. ...
  • Earned media. ...
  • Your competitors' content channels.
Sep 10, 2021

What are the 7 competitive intelligence process? ›

These steps are to identify competitors, identify areas of concern, gather information, analyze the information found, report on the findings, and make a decision based on the results of competitive intelligence.

What are 5 examples of competition? ›

Types of Competition
  • Interspecific Competition. Interspecific competition is the one that occurs between different species that use the same resource or a group of resources. ...
  • Intraspecific Competition. ...
  • Interference Competition. ...
  • Exploitative Competition. ...
  • Apparent Competition.
Sep 15, 2022

What are the 5 competitive Strategies examples? ›

Here are four types of competitive strategy and an example for each:
  • Cost leadership strategy. ...
  • Differentiation leadership strategy. ...
  • Cost focus strategy. ...
  • Differentiation focus strategy.
Nov 16, 2021

What are the 5 basic factors that influence competition? ›

From a microeconomics perspective, competition can be influenced by five basic factors: product features, the number of sellers, barriers to entry, information availability, and location.

What is 4 components of competitive analysis explain? ›

Defining a market, knowing your relative performance on the competitive landscape and driving healthy, repeatable customer experiences are all vital elements of competitor analysis. The last important part of a competitor analysis framework is the messaging around the good or service itself.

What are the main types of competition? ›

It consists of four types: perfect competition, oligopolistic markets, monopolistic markets, and monopolistic competition.

What are the 5 factors of competitive advantage? ›

Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution network, intellectual property, and customer service.

What are the 6 factors of competitiveness? ›

Answer and Explanation: The six factors of competitive advantage are selection, quality, service, turnaround, price, and speed.

What are the 4 competitive growth strategies? ›

The four main growth strategies are as follows:
  • Market penetration. The aim of this strategy is to increase sales of existing products or services on existing markets, and thus to increase your market share. ...
  • Market development. ...
  • Product development. ...
  • Diversification.

What are the 3 types of competition? ›

What are the 3 Types of Competitors?
  • Direct Competitors.
  • Indirect Competitors.
  • Replacement Competitors.

What is the basic definition of a competitive advantage? ›

A competitive advantage is anything that gives a company an edge over its competitors, helping it attract more customers and grow its market share. A competitive advantage can take three primary forms: Cost advantage–producing a product or providing a service at a lower cost than competitors.

What is the full meaning of competitive? ›

adjective. Britannica Dictionary definition of COMPETITIVE. [more competitive; most competitive] 1. : of or relating to a situation in which people or groups are trying to win a contest or be more successful than others : relating to or involving competition.

What factors influence competitive intelligence? ›

Macro factors that influence the competitive environment include economic, ecological, socio-cultural, political, legal and technology challenges that face a company. Competitive intelligence focuses on turning this external information into the insight required for strategic and tactical decision-making.

How do you develop competitive intelligence? ›

6 Steps to Design a Successful Competitive Intelligence Process
  1. Identify Your Competitors. ...
  2. Identify Areas of Interest to Track in Your Competitors' Digital Footprints. ...
  3. Gather Your Intel. ...
  4. Create a Competitive Analysis. ...
  5. Communicate Intel. ...
  6. Turn Data into Results.
Jun 5, 2020

What is the definition of competitive competence? ›

Competitive Advantage. Core Competence. Meaning. Competitive Advantage implies the virtue, that helps the firm to perform better than its rivals at the market place. Core Competence refers to the specific skills, knowledge and expertise, that is hard to be followed by the competitors.

Why is competitiveness strategy important? ›

Having a competitive strategy is most important when a company has a competitive marketplace and several similar products are available for consumers. This strategy helps you create a defensive position in your industry, along with generating a superior return on investment.

How many competitive strategies are there? ›

There are three competitive strategies that you can implement across your business: Cost-leadership strategies, differentiation strategies, and focus strategies.

What are the two main competitive strategies? ›

There are two basic types of competitive advantage a firm can possess: low cost or differentiation.

What are the key factors of competitiveness? ›

Porter's Diamond of Competitiveness states that competitiveness depends on four main factors (Porter, 1998). These are input supply factors, market demand, firm structure, strategy and rivalry, and finally firms that are related and provide support, as well as supporting associations.

What are 3 ways to gain competitive advantage in business? ›

Michael Porter, the famous Harvard Business School professor, identified three strategies for establishing a competitive advantage: Cost Leadership, Differentiation, and Focus (which includes both Cost Focus and Differentiation Focus)[1].

What are the 6 steps of competitive analysis? ›

6 Steps to Performing a Competitive Analysis
  • Identify competitors. Find out how much you're spending on monthly biz app subscriptions. ...
  • Analyze competitors' online presence. ...
  • Check online reviews. ...
  • Talk to competitors' customers. ...
  • Identify their strengths and weaknesses. ...
  • Use research tools.
Apr 5, 2021

What are the six sources of competitive intelligence? ›

8 sources of competitive intelligence
  • Your competitors' websites. Unsurprisingly, your competitors' websites are a robust resource when it comes to gathering CI. ...
  • Social media. ...
  • Your customers. ...
  • Your competitors' customers. ...
  • Your competitors' employees. ...
  • Your colleagues. ...
  • Earned media. ...
  • Your competitors' content channels.
Sep 10, 2021

What are the 5 types of competition? ›

Before we start on the ways that you can identify your competitors, let's first talk about the types of competition that you have in the field. There are 5 types of competitors: direct, potential, indirect, future, and replacement.

What are the 3 basic competitive strategies? ›

According to Porter's Generic Strategies model, there are three basic strategic options available to organizations for gaining competitive advantage. These are: Cost Leadership, Differentiation and Focus.

What are the main types of competitive advantage? ›

The two main types of competitive advantages are comparative advantage and differential advantage.

What are the two main types of competition? ›

There are two different types of competition:
  • Intraspecific competition occurs between members of the same species. For example, two male birds of the same species might compete for mates in the same area. ...
  • Interspecific competition occurs between members of different species.
Mar 5, 2021


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