22 Jul 11 Competitive intelligence on a shoestring
How can small businesses in India do competitive intelligence (CI)? I had the opportunity to discuss this with a group of small businesses at the TiE breakfast event in Pune last month.
Small businesses have limited resources at their disposal and need to figure out ways to do CI on small budgets. In developed economies which are well documented, this generally means smart use of free internet tools of various kinds to keep tabs on the industry, regulation, competition, etc.
In India, these tools have limited use, as there is miniscule business information available on the Internet. Small businesses in India need to tap into the “market knowledge” available on the street from their customers, distributors, dealers, suppliers, bankers and so on, in order to keep themselves abreast with the developments around them.
Decision makers in small companies have an advantage over their counterparts in large organizations as they are less removed from these sources of information. Decision makers in large companies are several degrees removed from the market participants. To ensure that the management has enough intelligence for planning strategy, large companies grapple with processes for ensuring smooth flows of reliable information from their on-the-ground staff to the top. Much of it is lost on the way up, which is one of the reasons why larger companies often employ dedicated CI teams or external service providers to gather market intelligence.
In small companies, the key decision-makers themselves interact with other market participants or are at best one level removed from them. They are therefore closer to the key inputs that feed into their strategy plans.
In order to take advantage of this proximity to the environment, decision-makers in small companies need clarity on what intelligence inputs will help them win. What are the key decisions they need to make? What is the information and analysis that will ensure that the decisions are winners? To use CI jargon, they need to know their KITs and KIQs (key intelligence topics and questions). What are the data points that are required for creating actionable intelligence? Which market participants can they tap for each of these data points?
For creating this CI framework, small businesses need to apply the same rigour as large companies do. Once the decision-makers think this through, they can easily leverage their interactions with the external world to gain the required intelligence at relatively little additional cost. The key investment is in developing a clear framework.
However, as long as they don’t have the required clarity on their own CI needs, their interactions with the outside world will remain limited to the immediate transactions at hand – wasted opportunities to get valuable competitive insights!