Most businesses are quite rightly focused on delivering the best possible product or service to their customers. It certainly feels like a full-time job for us at AYLIEN. But no organization is an island. Beyond the walls of any business is a wider world. A market in which that business operates, and (I regret to inform you) competitors wishing to help your customers in similar but subtly different ways.
A business that pays no attention to those competitors will not be a business for long. In fact, researchers from John M. Olin School of Business at Washington University estimate that in 10 years, 40% of today’s Fortune 500 firms on the S&P 500 will become extinct - and this is one of the reasons why.
Take the oft-told tale of Blockbuster for example. There are many lessons to this sorry story of corporate demise. But there’s absolutely no question that a failure to see and react to what was happening in the world around them surely contributed. In short, the business failed to see the way the wind was blowing, and (famously) under-estimated new kid on the block Netflix.
They lacked competitive intelligence. And the rest is history. If you want to avoid the same fate, or you’re in the business of helping others avoid it: read on.
What is competitive intelligence?
Most of us believe we understand our competition, and hence understand the concept of ‘competitive intelligence’. In plain English, it could be described as ‘ensuring we know what a short list of our direct competitors are doing’. And that is part of it, but not the whole story.
To understand competitive intelligence a little better, it helps to start by understanding competition itself better. Whilst we tend to see our competition as other businesses similar to us, selling similar products to us, that isn’t quite correct. In fact, research from the Society of Competitive Intelligence Professionals (SCIP) estimates at 91% the chance that the greatest competitive threat to any given business will come from an unknown player currently outside the industry.
On this basis, competition is better defined as:
“Any other way our customer can derive the benefit that they get from our product or service”.
To give one example (of an infinite number), this is why mobile games might be seen as a competitor of newspapers - because they both help us pass the time whilst waiting in a queue. When we think of competition in this way, competitive intelligence becomes a broader category covering:
- The actions and events relating to our direct competitors
- Changes in market conditions, technology, and consumer behaviors that may impact on our success, and
- News relating to emerging new competitors, in the broadest sense, that pose a threat to our current market position
At this stage it should be apparent that competitive intelligence is a broad field, and that staying abreast of all potential sources of competition is a challenge. Let’s now talk about how we might do that.
Identifying meaningful competitive intelligence
If you are fortunate to have a handful of competitors, each of which has a distinctive (for which read ‘made up’) name, then competitive intelligence is easy. Google News alerts will do most of the job for you.
Unfortunately, as we saw above, real life isn’t like that. In fact, every business needs to be aware of constantly changing market characteristics, newly emerging competitors, plus more conventional competitive activity. It should be clear this is not a job that conventional alerts can cover adequately.
Nor is it a task that a team of analysts, no matter how large or how dedicated, could reasonably be expected to perform, or not without outside help at least. Even for organizations who themselves are in the business of selling competitive intelligence platforms (many of which are AYLIEN customers) this is not a realistic approach.
Fortunately, however, just such outside help exists in the form of thousands of journalists, bloggers, reporters, and researchers, who publish news and opinions relating to the business world (and indeed the wider world) every day.
By identifying, classifying, and sharing the content relevant to our specific challenge within this output, we will have competitive intelligence worthy of the name - whether for our own business or for sharing with customers.
This is what AYLIEN NewsAPI was built to do. It enables organizations to scan the horizon for relevant news content as it emerges, and monitor its development of topics as it unfolds.
Specifically, AYLIEN ensures that precisely the right competitive intelligence content can be put in front of the right people, in a timely and accurate manner. It works something like this, but any solution you might wish to implement should aim to do something similar:
- Aggregate content from over 80,000 sources around the world, and make accessible through one API, to ensure that nothing of significance is missed, including specialist publications and longtail sites, as well as those in languages other than English to ensure that competitive intelligence is not limited solely to stories covered only by mainstream media.
- Perform natural language processing on every article ingested to add structure to unstructured content, making it exponentially easier and more efficient to find the relevant news you are looking for. AYLIEN News API NLP includes entity tagging for over 5.6 million entities, and category tagging for over 3,000 topics and 1,500 industries, as well as sentiment analysis at entity and document levels, and extensive metadata extraction.
- Clean, structured news data in JSON as an output that can easily be delivered to wherever it is needed, so that the competitive intelligence your company (or your client) needs is available to be consumed in feeds, dashboards or sites as required.
Of course for such a system to work, it is necessary to know what the company (or client) is looking for. Here it is important to remember the broad nature of the challenge: do not focus solely on the obvious, but on the wider context, when establishing the entities and categories which you wish to monitor.
The right way to react to competitive intelligence
Collecting competitive intelligence is one thing. What to do with this knowledge is another thing entirely. A blog post such as this cannot hope to provide a comprehensive primer on the right way to navigate the competitive landscape (if only it were that easy), but it is possible to share at least some thoughts and recommendations, including:
- Keep things in context. It is easy to obsess about competition. But delivering great product, and keeping customers happy, remains the secret to success. It is important not to over-react to every event, but carefully evaluate its significance first - it may have very little.
- Be aware of ‘emerging risk’. That said, it is particularly important to identify and react to slowly emerging trends that might not mean a huge amount today, but can become an existential threat if left unchecked. This requires imagination and creativity in understanding and identifying precisely what these threats may look like - which of course is part of the challenge.
- Be ready to change. One of the lessons of the Blockbuster story is that the organization was so wedded to a particular way of doing things it became unable to change in response to a new set of circumstances. It is very difficult for large organizations to avoid this trap, but do everything you can to create an agile, responsive organization. Alternatively, incubate new ways of doing things as independent entities within a larger corporate structure.
- Understand the power of ‘mutual forbearance’. With apologies to Isaac Newton, not every action requires an immediate and opposite reaction. Think carefully about where your organization wins, and where it doesn’t. Defend the former vigorously, but be prepared to surrender markets (either geographical or vertical) if it makes sense and leaves you in a stronger overall position.
- When you DO move, move fast. Knowing when to respond takes experience and judgement. But when you realise a response is appropriate, don’t needlessly delay. Ensure your organization is set up to make tactical decisions fast, and communicate a new approach in the same way.
As noted above, this is only a summary. But with the ability to identify, classify and act on market and competitive intelligence - you may at least avoid becoming another Blockbuster.
Try AYLIEN News API for yourself with a 14 day free trial. We'll also be delighted to discuss more with you about how we work with some of the most respected names in competitive intelligence - contact us here.