Data-driven companies rely on two forms of intelligence in their decision-making: competitive intelligence and market intelligence. While the two terms are often used interchangeably, esoteric definitions draw a clear distinction between the two. Yet, with 80% of businesses delegating one or more employees to competitive intelligence and 96% listing it as being critical to their success, that distinction matters.
In this article, we’ll examine the focus, objectives, and applications of competitive and market intelligence to give you a better understanding of how they can be used to grow your business.
What is Competitive Intelligence?
Competitive intelligence is business-focused. Companies use competitive intelligence to understand their competitors’ strategies, decision-making, market share, and SWOT. This intel takes many forms, including:
- Supply, demand, and cost curves
- Market size, share, and saturation
- New product or service announcements
- Publicity (press releases and social media)
On a broader level, competitive intelligence is used to assess the competitive environment in which a company exists—or into which the company intends to enter. Researching the competitive environment plays a crucial role in identifying opportunities for growth as a company enters into or navigates within that space.
The scope of competitive intelligence is flexible, adjusting to a business’s needs. It may include multiple companies competing within a narrow market segment. The scope may also shrink to include only the direct competition between a company and its competitor as the businesses vie for market dominance.
What is Market Intelligence?
Market intelligence is consumer-focused. In this case, the data focuses on developing a stronger understanding of a market through extensive consumer research. This form of intelligence broadly includes demographic, behavioral, and sales data. Collecting market intelligence may also involve researching:
- Population statistics
- Socioeconomic statistics
- Consumer demographics
- Product sales and demand
The metrics above represent a mere fraction of the data companies use to get a better sense of their market and consumers. Analyzing this intel guides companies as they attempt to innovate, differentiate, or otherwise increase their hold on a market. It can also guide a company preparing to enter into a crowded market. Unlike competitive intelligence—focusing on a company’s competitors relative to their market—market intelligence focuses on the actual company relative to its own market.
Competitive and market intelligence can be applied to achieving the same goals; revenue growth, expanding market share, increasing customer loyalty, etc. Each form of intelligence may present vastly different paths toward achieving those goals, but the end result remains unchanged.
It’s impossible to strike a perfect, universally-applicable balance between competitive and market intelligence. That ratio is unique to each company, market, and competitive environment. Acting on this intel effectively and successfully is no easy task. It requires efficient processes for filtering out the noise, identifying valuable insights, and getting them into the right hands. Establishing the difference between these critical forms of intelligence is a small step in maximizing the effectiveness of your knowledge management.
Research & References
“2019 State of Competitive Intelligence.” Crayon, 2019, www.crayon.co/state-of-competitive-intelligence. Accessed 8 July 2019.
Beggs, Jodi. “Overview of Cost Curves in Economics.” ThoughtCo, 12 Feb 2019, www.thoughtco.com/cost-curves-1147855. Accessed 8 July 2019.
Bloomenthal, Andrew. “Competitive Intelligence.” Investopedia, 1 Apr. 2019, www.investopedia.com/terms/c/competitive-intelligence.asp. Accessed 8 July 2019.
“Competitive Intelligence.” Entrepreneur, www.entrepreneur.com/encyclopedia/competitive-intelligence. Accessed 8 July 2019.
Cremades, Alejandro. “How To Effectively Determine Your Market Size.” Forbes, 23 Sep. 2018, www.forbes.com/sites/alejandrocremades/2018/09/23/how-to-effectively-determine-your-market-size. Accessed 8 July 2019.
Hargrave, Marshall. “Market Saturation.” Investopedia, 7 July 2019, www.investopedia.com/terms/m/marketsaturation.asp. Accessed 8 July 2019.
Hayes, Adam. “Market Share.” Investopedia, 2 May 2019, www.investopedia.com/terms/m/marketshare.asp. Accessed 8 July 2019.
Kenton, Will. “Demand Curve.” Investopedia, 24 June 2019, www.investopedia.com/terms/d/demand-curve.asp. Accessed 8 July 2019.
Kenton, Will. “Supply Curve.” Investopedia, 24 June 2019, www.investopedia.com/terms/s/supply-curve.asp. Accessed 8 July 2019.
Kosaka, Kim. “What is Alexa Rank?” Alexa, 19 Dec. 2017, blog.alexa.com/marketing-research/alexa-rank. Accessed 8 July 2019.
Manktelow, James. “SWOT Analysis: Discover New Opportunities, Manage and Eliminate Threats.” MindTools, 2016, www.mindtools.com/pages/article/newTMC_05.htm. Accessed 8 July 2019.
Meredith, Alisa. “How to Use Psychographics in Your Marketing: A Beginner’s Guide.” HubSpot, 11 Dec. 2018, blog.hubspot.com/insiders/marketing-psychographics. Accessed 8 July 2019.