As they say in the Lion King, it is all about “the circle of life.” Things begin with a new idea. A few of those ideas result in compelling products. For a small minority of those products, the right people come together to create a valuable proposition for customers. With customers in hand, the company grows and prospers. One day, competitors begin to envy the company’s success. Meanwhile, the competitive environment gets tough. What will the company do? Can it adapt and continue to be successful. Some companies do and go on to bigger and better things. However, all too often, some “die.” Swallowed up by another, stronger company that extracts what is valuable from the dying company.

So, we mourn the passing of Palm- subsumed into the HP technology behemoth. How did this happen? What are the implications for HP? How does it affect others? Competitive intelligence plays a role in answering such questions.

HP’s Palm Plans May Leave Microsoft Out in the Cold

There are many reasons to acquire a company. It could be that the target company has many desirable customers, unique access to certain market segments or a valuable brand in a specific customer demographic. Who tracks such things about competitors or potential acquisitions? Apparently, HP does. (Asset Tracking, Four Corners Analysis, Intellectual Property Evaluations)

It is no surprise that competitive intelligence issues and activities regularly show up in business news. After all, intelligent and motivated professionals everywhere are furiously competing to win. To the untrained eye, it may seem that companies’ activities are disjointed or nonsensical (and sometimes they are). However, to someone trained in competitive intelligence, there are stories behind the public moves. From those stories, emerge motivations, strategies and opportunities.

For example, take the recent New York Times article, “Apple Buys Intrinsity, a Maker of Fast Chips” at http://www.nytimes.com/2010/04/28/technology/28apple.html, about Apple. Apple, flush with cash and the serial hits of the iPod, iPhone and iPad, purchased a chip design company. What does this mean? How does it fit with previous Apple moves? How does it confirm or change Apple’s perceived strategy? What might their next move be?

These questions are fundamental questions for someone competing with Apple and the core domain of competitive intelligence professionals.

Without a doubt, there have been two dominant strategic business themes in the last eighteen months. First, wherever and however possible, reduce costs. Companies have rushed to reduce staffs, shutter factories and delay R&D spending. Conserving cash during the recent credit crises has been a paramount concern. The second major theme (which is gaining steam) is to grow revenue and profit. The tension between the two themes is apparent. Often growth requires some kind of incremental (or, at least, reallocated) investment.

Although competitive intelligence might help with cost saving decisions, its better use is to support strategic growth decisions. After all, strategy is forward-looking, intimately concerned with competitiveness and inseparable from significant risk/reward decisions.

It is easy to find books on growth strategy -many more, in fact, than for competitive intelligence. However, this disparity in academic or executive treatment does not obviate or lessen the need for competitive intelligence. Indeed, strategy books are replete with references to the role of competitive intelligence in strategic decision-makings.

Take an example from Chris Zook’s series of books on growth strategy. In three books – Profit from the Core, Beyond the Core and Unstoppable – Zook synthesizes ten principles of core growth and redefinition.

1. Start by Defining the Core
2. Obsess on the Full Potential of the Core
3. Fully Value Leadership Economics
4. Map Out Adjacencies to the Core
5. Recognize the Power of Repeatability in the Core
6. When Lost, Return to the Core Customer
7. Remember the Focus-Expand-Redefine Cycle of Growth
8. Exploit the Power of Hidden Assets
9. Think of Capabilities as the Building Blocks of Renewal
10. Don’t Underestimate the Power of Focus

(Note to self – using “all”, “always” and “never” guarantees that you will sometimes be wrong.)

Beware of consultants (like me) that tell you that they know what to deliver and how to deliver it to your organization. Be especially cautious when the consultant knows a lot about competitive intelligence but only a little about your situation. Maybe, after you have talked with them awhile, it is more reasonable to accept the opinions of an outsider but only after they have demonstrated knowledge about your competitive challenges.

And what are your competitive challenges? Who cares most about these challenges?

Common challenges are growing the business, reacting to a competitors’ initiatives, clarifying a product or market strategy, deciding a business strategy question and cutting costs effectively. In many organizations, strategists of one type or another are the decision-makers. They are responsible for overcoming these important challenges and, thus, are the customers of the related competitive intelligence.

Competitive intelligence has a significant role in addressing all of these challenges.