In the modern business world, every company faces some level of competitive risk. With increasing competition, managing competitive risk can prove crucial in deciding not only the growth of a business but also its survival. Waiting for the alarm bells to go off isn’t a good strategy, rather, anticipating and preparing for the future is.
Competitive research and competitive intelligence are about paying attention to your competitors’ movements and market trends. A large number of companies lose business to competitors because they’ve not taken the time to gather competitive intelligence.
In a world of contradictory and misleading information, smart business leaders use intelligence to see around corners, mitigate risk, and shape their decision-making.
In this article, let us understand how to conduct competitive research, and how it can help businesses identify and manage risks.
What is competitive research?
Competitive research is the process of gathering and analyzing information on your competitors to understand their strengths and weaknesses in comparison to your own. But, competitive research shouldn’t just be limited to your competitors. The purpose of competitive research should be to make your organization more competitive. Here are some of the benefits competitive research provides businesses:
- Competitive research can reveal trends in the marketplace that might have otherwise been missed. The ability to identify and predict trends is a huge asset for any business, helping to improve its value proposition for customers.
- Competitive research helps you understand why customers choose to buy from you or your competitors.
- Competitive research can help identify white spaces, i.e. segments of the population that are being underserved, or even better (for you), not being served at all.
- Competitive research can help you create a strategic plan for your business. This includes things like improving your product or service, using more strategic pricing strategies, and improving the promotion of your products.
Research is usually done to answer certain questions, and competitive research is no different. It seeks to answer questions such as:
- Who are your competitors?
- How are their products or services different from yours?
- What is each competitor’s market share?
- What are their sales strategies?
- What are their marketing strategies?
- What are their strengths and weaknesses?
- What potential threats do your competitors pose?
- What potential opportunities do they make available for you?
The core function of conducting competitive research is to inform the leaders or decision-makers in an organization about what is happening and what is likely to happen in the near future. This enables them to take informed decisions to mitigate risk and to respond to residual risk that they can’t avoid.
What kind of risks does competitive research help manage?
Competitive research depends mostly on your organization’s objectives. Similarly, the definition of risk varies by industry. However, competitive research should consider every possible risk that can affect your organization, and preemptively create contingency plans, response protocols, and communications strategies. Generally, in addition to direct risk posed by the competitors and changing market trends, organizations should consider the following risks:
- Economic
- Social
- Geopolitical
- Legal
- Ecological
- Technological
- Safety
- Data leaks by employees
Using competitive research for risk management is recommended for organizations because it helps to:
- Gain current information on your market and competitive environment
- Understand where your vulnerabilities are.
- Develop your “risk mapping,” which involves visualizing your risks on a graph, chart, map, or other visual representations.
- Keep a close eye on potential risks and factors that could become threatening in the future.
- Develop strategies to avoid the risk altogether by finding ways to prevent them, or reduce your response time and efficacy when a risk becomes reality.
Monitoring risks using a competitive intelligence software
While specific risks may vary from company to company or industry to industry, it is important to conduct competitive research when trying to mitigate risks, and a competitive intelligence process is the most practical and effective way to do that. However, the process of competitive intelligence, if done manually, is quite time-intensive, and can consume a lot of effort and resources. This is why modern organizations manage their competitive intelligence processes using competitive intelligence software.
A competitive intelligence platform helps organizations track strategic information on competitors, customers, and industry segments by enabling users to collect, curate, and share actionable intelligence across their organization. A specialized software is crucial when you’re conducting competitive research for the purposes of risk mitigation and management, because your monitoring/search parameters will have to be both considerably broader, so that you don’t miss any information, and incredibly specific, so that you don’t get irrelevant information.
When monitoring your market and competitive landscape for the purpose of risk management, you would need to watch for:
- Negative industry news
- New regulations/changes in laws
- Supplier updates
- Risks in the countries you operate in
- Security threats
- Innovations
- Political changes
- Scandals/ethical issues
- Natural risk/disasters
- Economic risks
- Competitors
- Industry changes
A competitive intelligence software like Contify lets organizations automate the collection of relevant information from over 500,000 sources such as news websites, company (competitor) websites, press releases, social media, regulatory and government portals, review websites, job boards, online business databases, and even allows to integrate premium resources such as analyst reports into the platform itself.
In addition, this competitive intelligence tool lets you deliver information to the leadership, management and key stakeholders in various formats such as daily intelligence alerts, weekly or monthly reports, newsletters, etc., so they can establish responses to potential threats.
Another helpful feature you’ll find in a CI tool like Contify is intuitive dashboards, which are data visualization tools to help you easily visualize the important strategic developments and identify key trends.
If you want to know how competitive intelligence can help manage risks in real life, here’s a great example: How a Leading Risk Management Solution Provider Leverages Newsfeed APIs to Automate Monitoring of Security Risks
Conclusion
The more an organization adopts an anticipatory posture, by using an up-to-date intelligence monitoring system of its environment and its vulnerabilities, the more it will be able to protect itself against risks. A competitive intelligence software is a great way to monitor your market, and your competitors, in addition to any risk-based triggers that may call for strategic action in a timely manner.
As the technology transformation gains momentum, businesses are undergoing rapid changes, which are in turn intensifying competition. The objective of competitive research is to manage emerging opportunities and risks in a proactive manner to gain competitive advantage and enhance business performance, and competitive intelligence software is the most age-appropriate way to do that.
