value insights

Competitive Intelligence Customers- Valutrics

The first questions any analyst must answer are “Who are my analysis customers?” and “What are their critical needs?” These can sometimes be difficult to answer, especially if the customers themselves cannot effectively articulate what they want or there are multiple customers with differing agendas. The answers must at least be attempted because without those, the analyst cannot select the right methods. To be truly effective, analysts must understand how their outputs will eventually be used by the decision makers.1 These individuals may well be one or more steps removed from the analyst’s immediate customer.

An analyst’s customers or clients2 are those individuals in the enterprise who are in need of advice and guidance in advance of making an identified decision. We make no distinction here between the level at which a customer may be situated in the enterprise, as we know that analysts provide many decision makers with advice, whether they are working on a strategic, tactical, or operational problem.

The analysis process has a clear starting point when either the analyst identifies an issue himself or a customer makes a request. The process also has an end point when the satisfactory product is delivered to the customer. Having said that, good analysts will communicate with their customers throughout the entire process and will engage in many iterations to improve the final product. An open-minded attitude to the task is essential, as is the recognition that improvement can always be achieved.

Customer needs have to be interpreted before they can be acted upon. This is often the foundation to a successful analysis process. Analyst-customer interaction is critical at all stages of the process, but no more so than at the outset; consequently, time spent here will pay dividends later on. A genuine dialog is needed, as experience has shown us that the issuing of instructions in a one-way manner just does not produce effective results.

Most enterprises attempt to identify, relate to, and then satisfy market-place customers’ needs and employ customer needs identification processes and (internal) customer relationship management (CRM) techniques. The relationship that an analyst has with his customer and/or decision maker is no less important. Symmetric, two-way communication is needed to identify an enterprise’s actual, as opposed to perceived, intelligence needs.

Helping business and competitive analysts are government intelligence models for identifying national-level intelligence requirements, which have been adapted for commercial use.

the following four main categories are relevant to the vast majority of analytical efforts conducted within profit-seeking enterprises




Here we adapt the four areas identified by Donald Lehmann and Russell Winer:

  • Product/brand level is the narrowest perspective an analyst can take of competition and focuses only on rivals pursuing the same segment with essentially the same offering. An analyst employed by Coca Cola using only this perspective would only look at competing cola brands such as Pepsi, RC Cola, and Virgin Cola.
  • Product category level improves this situation by looking at products/services with similar features and attributes. Using our previous example, this would include not only cola brand drinks but other soft drinks such as cherry-flavored colas (Dr. Pepper, Cheerwine), lemon-lime flavored drinks (7-Up, Sprite, Fresca), diet colas, high-caffeine colas, and other varieties of soft drinks.
  • Needs-based/generic-level competitors seek to satisfy the same functional need of a customer. Again, using our previous example, this would be the generic need to quench a thirst. Many beverages would be in this category, ranging from water, juice, tea, and coffee to beer, wine, and spirits.
  • Share of wallet level is probably the broadest category of competition and considers any other product that a customer might choose to buy instead of ours.

David Montgomery and Charles Weinberg suggest that competitive analysis systems should ideally focus on the following main environmental sectors:

  • Competitive—Both current and prospective competitors and the means by which they compete
  • Customer—The firm’s current customers, potential customers, and competitor’s customers
  • Economic—Issues such as GNP, inflation, financial markets, interest rates, price regulations, raw material sourcing, fiscal and monetary policy, and exchange rate volatility
  • Political, legal, and regulatory—Institutions, governments, pressure group, and stakeholders that influence the “rules of the game”
  • Social—Demographics, wealth distribution, attitudes, and social and cultural characteristics that determine the firm’s purchasers
  • Technological—Current and emerging technologies, product and process innovations, and basic and applied R&D efforts

Analysts often segment the competitive environment into two layers. The macro-environment, and the operational/internal or micro-environment includes the individual, sometimes unique, strengths and weaknesses of the enterprise.


One specialized area of competitive analysis falls under the rubric of Competitive Technology Intelligence (CTI). Brad Ashton and Gary Stacey identified three focal areas for CTI:

  • Innovation—Identifying innovation and in particular, disruptive innovation. Decision makers in technologically driven industries experience rapid change. Consequently, new or different technologies will be needed within a short- to medium-term time period to compete.
  • Product/process—Attempts to understand the nature and potential results of process improvements. For companies with technology intensive products and/or processes, technology is an important differentiating factor in product features, production steps, or pricing strategy. Those industries that are characterized by frequent product introductions must keep ahead of relevant emerging technologies.
  • R&D—Many industries have a high proportion of companies with high R&D intensity. As such, they display higher-than-average ratios of R&D expenditures to sales. They are also firms whose R&D portfolio may contain a high proportion of large, long-range products and that are most active in developing innovation, as well as product and process improvements.
Decision Location and Decision Maker

Management decisions differ depending on the level of responsibility on which they are made and who makes them. A brief overview is helpful here to put this into context:

  • Strategic decisions have significant resource allocation impact, set the precedents or tone for decisions further down the organization, and have a potentially material effect on the organization’s competitiveness within its marketplace. They are made by top managers and affect the business direction of an organization.
  • Tactical decisions are less pervasive than strategic ones and involve formulating and implementing policies for the organization. They are usually made by mid-level managers and often materially affect functions such as marketing, accounting, production, a business unit, or product, as opposed to the entire organization. Tactical decisions generally have lower resource implications than strategic decisions and are typically semi-structured.
  • Operational decisions support the day-to-day decisions needed to operate the organization and take effect for a few days or weeks. Typically made by a lower-level manager, operational decisions are distinct from tactical and strategic decisions in that they are made frequently and often “on the fly.” Operational decisions tend to be highly structured, often with well-defined procedure manuals.



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