Why Competitive Intelligence Is Not Data-Driven (Nor Market Intelligence, For That Matter)

Competitive intelligence is about collecting, analysing and distributing information about competitors and markets. So you can make informed strategic decisions. While data plays a crucial role in competitive intelligence, it is not data-driven. This article will explain why competitive intelligence is not solely dependent on data. Or, to put it more bluntly, why competitive intelligence is not data-driven.

Don’t Jump Into The Water Without Checking For Rocks

Let’s face facts. If you have a problem to solve, you dont jump straight in and find the data to solve it. Competitive intelligence first steps is that you need to know the following: 

• What the problems are
• How will they affect you
• Where the best place to find the information will be

Information only becomes data once it has been sorted, synthesised and collated. But you really need to know where you will find or who will know the answers you are looking for. 

Competitive intelligence involves collecting information from publicly available data sources. And from people with direct or indirect knowledge of the industry or competitors. This information can be gathered through interviews, surveys, or by attending industry events. Human intelligence provides valuable insights that data cannot capture. Subjective opinions, emotions, and perspectives are essential to understanding the competitive environment.

We Are Human

Competitive intelligence requires human input to interpret and make sense of data. Data alone is useless without the ability to analyse and extract valuable insights. We need the skills and experience to filter through large amounts of data. To identify the key trends and patterns. The insights to help you make informed decisions. The ability to interpret data requires:

• Intuition
• Creativity
• Critical thinking 

Automated Processes Cannot Replace These Things. At Least Not Yet.

Data is only helpful if analysed correctly. And for it to be competitive intelligence, data analysis requires human interpretation. The data can be incomplete, outdated, or misleading, leading to incorrect conclusions. The performance of data requires domain expertise and critical thinking. This can’t be replaced by machines or software. To make informed decisions, we must understand the data’s context and the industry’s nuances. Here are some example competitive intelligence questions to help start your project

Quantitative And Qualitative Data

Competitive intelligence involves the collection of both quantitative and qualitative data. While quantitative data is easily measurable. When analysed using statistical techniques, qualitative data requires a more nuanced approach. Qualitative data include: 

• Customer feedback
• Competitor rumours 
• Engaging people to find their opinions
• Industry gossip

All of which can be challenging to quantify. This data type requires us to identify and interpret key themes and trends.

Competitive intelligence involves understanding the broader business environment, which is not always quantifiable. For example:

• Understanding the political and regulatory landscape
• Cultural and social trends
• Industry’s competitive dynamics 
• What competitors and insiders think about what’s next

This requires a more holistic understanding of the business environment. This type of knowledge can’t always be gained through data analysis alone.

Informed Decisions Based On Judgment And Interpretation

So what’s the most important aspect of Competitive intelligence? It’s using your judgment and interpretation to make informed decisions. It’s aware of bias and a desire to verify everything. While data can provide insights, it’s up to us to interpret the data and make recommendations. This requires us to understand the broader context in which the data was collected. And use judgment to determine its relevance and significance.

Rember, competitive intelligence is not solely focused on data about competitors. It also involves understanding the broader market and industry trends. This requires us to understand the industry, its players, and the key drivers of success. 

Fresh Eyes

 Yes, data can provide insights into market trends. But it can’t replace the deep industry knowledge and the naive enquirer and fresh eyes we can bring. All needed to make informed decisions.

Competitive intelligence teams need to understand the goals and objectives of the organisation. This requires understanding the company’s strategic priorities, values, and culture. Data provides insights into competitors and your environment. But it can’t replace the need to align intelligence with your strategy.

Competitive intelligence involves collecting, analysing, and disseminating data to relevant stakeholders. This dissemination requires effective communication skills, which is a human skill. How you present the insight can significantly impact the final decisions. For example, a poorly presented report can lead to incorrect conclusions. Or the decision maker gets stuck on a nail about historical data on a graph. 

So If Competitive Intelligence Isn’t Data-Driven, What Drives The Process? 

Well, competitive intelligence starts with a problem you need to solve. Followed by the questions you need to ask to solve the problem. 

Competitive intelligence is designed to solve your problems. These can be bad problems or good problems. Problems vary from:

• Identifying new market opportunities
• Evaluating competitors
• Mitigating risks
• Making informed decisions about mergers and acquisitions

All are forward-facing must knows. 

Solve The Problem

Competitive intelligence uses a problem-solving approach to identify the information needed. Define the questions to ask and only then gather and analyse the information.

Then comes the competitive intelligence questions. Meaning the information-gathering process focuses on answering specific questions. Questions are generated and defined based on the problems that the organisation faces. For example, if you face increased competition from a new entrant, a question could be:

What are the new competitor’s strategy, strengths, and weaknesses?” 

On the face of it a straightforward question. But have you ever tried doing a SWOT on your organisation? Not easy and usually brimming full of bias and assumption. A waste of time. The answer to this simple question could be obtained by gathering and analysing data: 

• On the competitor’s market share
• Product offerings
• Pricing strategy (this is not just the price list) 
• Marketing tactics
• And many, many more things

What’s Next, And How Will It Affect Me?

Competitive intelligence should be proactive. Meaning it anticipates potential problems before they arise. Competitive intelligence professionals constantly monitor the market and competitors. As well as look at other external factors signalling possible threats or opportunities. Then take action to mitigate risks or capitalise on opportunities from the problems. By asking what’s next and how it will affect me.

So, competitive intelligence is problem-driven. It provides actionable insights for you to use to make informed decisions. The insights provided by competitive intelligence can help you to: 

• Develop strategies to mitigate risks
• Improve their competitive position
• Identify new market opportunities

Finally, competitive intelligence is a continuous process of gathering and analysing information. The information gathered is used to update your knowledge of 

• The competitive environment
• Identify new problems
• Refine existing strategies

You can stay ahead of the curve by continuously monitoring the competitive environment. And enable you to make more informed decisions. 

Why Competitive Intelligence Is Not Data-Driven (Nor Market Intelligence, For That Matter)

In conclusion, competitive intelligence is problem-driven and question-driven. It is designed to solve specific business challenges and problems. By providing actionable insights that organisations can use to make informed decisions. It’s proactive and continuous and uses problem-solving to identify and gather information. We can stay competitive in a rapidly changing market by staying ahead of the curve.

While data plays a crucial role in competitive intelligence, it is not data-driven. It needs human input to interpret quantitative and qualitative data. To understand the broader business environment. To offer sound, well-thought-out judgment and interpretation. Deep industry knowledge, fresh eyes and alignment with the organisation’s strategic priorities.

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