Competitive intelligence should form the foundation of competitive strategy (Related article:  How to develop competitive strategy?).  If real-time competitive intelligence collection is not part of your business, you have a real problem.  You don't know what your enemy is up to and it/they could drive you out of business and you wouldn't know.  This article discusses both in-house competitive intelligence collection, when you should outsource, and how to pick a provider of competitive intelligence services.

Before we get into the details, it is important to point out that competitive intelligence per se is not illegal but is covered by a variety of laws (that can vary by jurisdiction) and industry guidelines and practices.  It is best to coordinate all competitive intelligence programs with your legal department.  When in doubt, consult with a lawyer before moving forward.  Similarly, as we will discuss below, even if you choose a consulting firm to help you with competitive intelligence, it is best to get the legal department involved.  Any screw-up can not only be a PR disaster, you can get into legal trouble as well.  (Related:  Standards for competitive intelligence)

How to organize your in-house competitive intelligence program?

The resources needed for in-house competitive intelligence collection will depend on the nature of the competitive landscape (how many competitors, number of large vs. small companies, public or private, domestic vs. overseas, direct vs. indirect).  Here are the competitive intelligence collection activities that you can do internally (and it is better if these are done internally):

• Real-time perusal of all all publicly available information from your competitors (websites, press releases, documents filed with various government agencies and are available to the public, speeches/presentations at both business and non-business events, quotes in publications, stories and news about the company in publications even if a company employee has not been interviewed, etc.) should be a task that should be assigned to someone who is very analytical and creative and has a good understanding of competitive strategy issues.  While a lot of this information is going to be meaningless (companies are very careful in what they disclose), the key to competitive intelligence is in "connecting the dots".  It is amazing how much you can learn about their business just be reading their publications.  (Related article:  Press release strategy)
• Attending conferences and other public events that your competitors are likely to attend/ exhibit.
• Subscription and perusal of local newspapers where your competitors' facilities are located.  The local newspapers have news that is highly valuable but is typically not available anywhere else.  While some of these newspapers are online, it is best to subscribe by mail.  It can get very tricky for foreign-language newspapers (since these may need to be translated), particularly if you do not have an office in that country, but you should make a judgment based on importance of that information.  For certain languages, there are services that will let you have the article/news mailed to you if there is a hit on the keyword that you select.
• Encourage your employees to join trade associations and ask them to volunteer for committees and task forces.  While these can consume a lot of time, your managers will typically work with your competitors and get to know information that would never be made public otherwise.
• Hire ex-employees (in consultation with HR and legal department).  They can be get resources to get insights on your competitors.

When competitive intelligence activities should be outsourced?

• When you need information on a competitor that requires direct interaction with the competitor, e.g., cost structure, organizational design, strategy, etc.  It is best to follow all the guidelines and practices developed by the Society of Competitive Intelligence Professionals, and of course, all the laws on the books.
• When you do not have the expertise internally.  Consulting firms specializing in strategy and competitor analysis are very good at processing large amount of information and developing a composite picture of the competitive landscape.
• When the outside firm can create value because it has worked with all/some of your competitors.  While all consulting companies are bound by confidentiality agreements, they are allowed to share insights on a high-level without violating any of the confidentiality agreements.  

How to pick a provider of competitive intelligence services?

• Do your research.  Take a look at their websites and then develop a short list before you start sending queries.  It is best to approach them one by one rather than post a RFP on your website.
• Work only with respectable firms.  Use them on a small project to test their capabilities and ethics before giving them your most important project.
• Check their credentials with the Society of Competitive Intelligence Professionals.
• Get your legal department involved right from the beginning.  Make sure that the work contract is well written so that the provider does not do anything illegal.
• Do not make unreasonable demands.  When you present your wish list, ask yourself if an outside company can find the same information on your company without doing anything illegal.  Chances of illegal activities are higher when you force your consultant to come up with hard-to-find information.
• Assign your own employee as the full-time joint project manager.  That way you can monitor what the consulting firm is doing.

Recommended:  How to develop a press release strategy

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