Your job is to champion one or more products for your company. Each product needs to be successful in a marketplace crowded with existing competitors. New threats emerge over time that you have to anticipate and proactively manage. Development teams count on your guidance to build the product with the right features. Your general manager relies on you to help deliver the needed revenues and profits. All along the way, you have to understand the environment, explain your recommendations and justify the company’s investments for your product. This is not a job for the timid.

Competitive Intelligence Helps With the Challenges

• Understand the market need. Every product attempts to fulfill a need in the market. Sometimes features represent this. Other times, the segmentation is determined more by price, distribution or something else. Often, a complex combination of market characteristics makes success possible.
  Competitive Intelligence paints a market landscape showing major forces and trends that affect your company’s strategies.
• Characterize the competition. There are products that do much of what your product hopes to do. There are companies that are established, customers that have made choices and strategies that are being executed that affect your potential success.
  Competitive Intelligence illuminates the formulae used by others (including their weaknesses) allowing you to refine your market understanding.
• Define the product. Feature lists are important. More than that, you need to define what is important and compelling about the product. Then, there is a process to document and present this to internal teams for their comment.
  Competitive Intelligence compares products and explains the critical differences to justify product directions.
• Develop the product. Nothing ever goes exactly as planned. Your task during development is to guide the teams responsible and answer a myriad of questions. Decisions and tradeoffs are constantly required of you.
  Competitive Intelligence supports decisions making during product development by constantly supplying updated market and product information to you.
• Promote the product. Even before the product development is complete, you have to talk with prospective customers, ecosystem partners, distributors and press to promote the product. Your messaging is critical to proper positioning and a positive reception.
  Competitive Intelligence answers the question of why your product makes more sense than the competitors’ products for your prospective customers.

It is hard to be a good product manager. Why not take every advantage of competitive intelligence information? See an expert and get started.

“I don’t need the exact figure. Just give me the ballpark number.”

This is how I sometimes do business when I am trying to buy a new car. When I am early on in deciding which car to buy, knowing that one of the candidates is about $25,000 and the other one is about $40,000 is enough information for me. The ballpark number is a useful approximation for my initial purpose. (Later I will bargain about the exact car and sales price.)

In competitive intelligence, we are often asked to assign a number to something a competitor is doing.

For instance, our management might want to know how much research and development money has been spent on the latest product from our competitor. This isn’t a number that most companies will report publicly. So what do we do? Give up? No, rather we fall back on the article of competitive intelligence faith that there is always an ethical way to give a good answer.

We find a credible way to estimate the number.

We might start with the company wide R&D number (which typically is reported). Then, we apportion it among the product lines by tracking how many new product introductions have been made in the year. A further refinement is made by overlaying the typically product cycles (e.g., 24 months from conception to marketing). That suggests that the product introduced this year was partially funded by R&D funds from previous years. Next, knowing something about where the new product fits in the product line helps us understand if it is a wholly new product or a derivative from a previous product. (Derivative products will usually require less R&D dollars than completely new products.) It is often straightforward to estimate the percentage of new design or features in any product. Putting all of this together means that we can report a ballpark number to management about the R&D money spent on a new product.

Sometimes the method is as useful as the answer.

Working through the previous example illustrates how the method teases out information and assumptions. This clear thinking has two main benefits. First, it answers the inevitable question from management about how you got to the answer. Second, and more importantly, it lays bare the reasoning in a way that allows others to challenge and improve your assumptions. When a CI professional manages this well, the ownership of the answer passes from the CI person to management. This is how it should be once they (management) are equipped with the right information.

The method also conveys the risk in the estimate.

A recent article in BusinessWeek entitled Digging Up Amazon’s Numbers is a wonderful example of a useful approximation. According to the article, Amazon is generally unhelpful in providing information to analysts that track the company about future prospects. So, Marianne Wolk (analyst at Susquehanna Financial Group), used warehouse information reported by Amazon to create a leading indicator of their future sales. That is, if Amazon increased their warehouse square footage, then that meant they were expecting higher sales. Correspondingly, a decrease in warehouse space meant declining sales expectations. This approximation will have to be tested over time to validate its usefulness. Nevertheless, it is a clever way to link something that is known with something that one wishes to know.

Public companies are sieves of information.

One recurring realization is that public companies cannot help but signal their intentions. The challenge is to use what is public to estimate what is not public. We don’t have to arrive at exact numbers. Most of the time a useful approximation (with the methods and assumptions described) will be quite valuable to management.

Do you agree?

One thing that is true in competitive intelligence (CI) is that signs are everywhere. Contrary to the image of a spy sleuthing through trash or bugging phones, an ethical CI professional is swamped with publically available information. The question is rarely about the quantity of information but how to identify and interpret the valuable information.

For example, suppose you want to know if a company might be wanting extend a product line. Maybe they have a couple of products in the line which are not threatening to your business but any extension would begin to encroach into markets that you valued.

There are several things to do.

• First, make sure that you know all of their current products. Then, sort them into product lines. Create a timeline for each product line so that you know the rate of new product introductions.  Usually a company will make all of this information easily available on their website.

• Second, assign values to product lines. This can be a qualitative evaluation. The intent is to understand how important the product line is to the company.  Part of the valuation is also how important the product line is to you.

• Third, research how the company trademarks the product names. This is a straightforward exercise of querying the database at the US Patent & Trademark Office. Sometimes companies will trademark names in advance of the actual product introductions.

• Fourth, where intellectual property is involved, research the patent position of the company. It is often helpful to use a tool such as the one from Innography to organize and facilitate the search. The goal is to get indicators (“signs”) of where the company is investing its R&D resources since that often points to the types of new products that will be introduced.

• Fifth, look at the company’s partnerships and investments. Many times a company needs help to complete a product. Every time that they engage with another company, they are seeking some benefit. Tracking the relationships and the likely value of the relationship will give clues to the company’s future directions.

There are many more ways to see the signs. They are everywhere.