No one can predict the future. Despite the tools you use and however sophisticated the analysis they provide, what will come next remains elusive. When building a business plan, your company cannot rely on certainty, but on finding a way to look ahead and determine the most likely successful strategy based on the factors that exist right now.
Of course, identifying that strategy depends on a careful approach to the market. Companies that benefit from competitive intelligence do so by selecting the right data, assessing the market, and tracking data over time. Responding to the correct information can give your company a powerful competitive edge moving forward when you follow the historical path in the right direction.
Choose the Right Data
The near limitless nature of big data creates both opportunities and problems for companies. Unfortunately, not all of the data available is accurate or helpful. You can easily get lost in unhelpful data sets and knock yourself off course.
With this in mind, accumulating as much data as possible should never be the goal. You should begin by collecting the right data. For example, consider a motorcycle repair business. Before opening a local repair shop, the business owner would not necessarily benefit from information about auto repair facilities, unless those shops also work on motorcycles. Understanding general demographic trends in the area matters, but only to the extent the shop owner cross-references the demographics of motorcycle riders. Combining macroeconomic trends with these demographics can help determine the extent to which motorcycle ownership may grow.
Information must be accurate and relevant to the market in which your company operates. Identifying a useful data source for competitive intelligence gives your business a leg up by bringing a reliable, expert partner into the process.
Assess the Market
Following the right data is more than just picking relevant information. It also requires you to gather from relevant competitors and customers within the market. The more information you can collect about purchasing behavior and competitive actions, the better you can assess how those behaviors and actions interrelate.
In the motorcycle repair scenario, this would include determining the number of competitive shops, and how current motorcycle owners feel about their options. Do owners rate competing shops highly or poorly? How far do they travel for repairs? Do trends show more or less repair business over the last one year? Or three or five years? This information helps show gaps in the market and ways in which a new shop may be able to fill it.
Track Over Time
The more points that competitive intelligence tracks, the more precisely you can identify trends and directions. Think of a line between points on a grid. Two points might show a general direction but cannot provide any details about whether the line is straight or curved, or whether one point might be an aberration. The more information your company gathers, the clearer the picture becomes, and the more defined the trends. For our motorcycle repair shop, a snapshot of motorcycle repair trends might show a piece of a pattern, but it could just as easily show the impact a new motorcycle on the market has on whether consumers opt for repair or replacement. Capturing data over time: the market, the overall economy, and the local customer base can give a clearer picture of competitors’ business and the market in which they – and you – will be operating moving forward.
Your analysis will never be foolproof. But moving forward armed with a clear direction and plan gives you the best opportunity to achieve and build on success.