How to Keep Tabs on the Competition

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Business data aggregators such as Dun & Bradstreet (dnb.com) and InfoUSA (infousa.com) provide detailed company information, including financials, although the services are not cheap. Often, however, local academic and public libraries have subscriptions (in libraries, InfoUSA is branded ReferenceUSA) and a willingness to share them -- and other resources -- with local small businesses. Ditto Small Business Development Centers and other economic development organizations.

From the bureaucracy. Government agencies hold a store of public but often unpublished information, available simply through a Freedom of Information Act request (or its local equivalent). Wilson, for example, once requested Occupational Safety and Health Administration accident records from landscaping companies competing with her client. "It just provided a wealth of information about where these companies did business and what their safety records were like," she recalls. "And ultimately, it helped our client position itself as more conscientious about safety."

Model Madness

Consultants are perennially devising new analytic models for evaluating a business and its competitive landscape, often with catchy names or abbreviations. But Craig Fleisher, the management professor, argues that these tools are not interchangeable -- they work best, he says, when put to specific uses.

For strategic planning: Particularly popular is SWOT, which stands for "strengths, weaknesses, opportunities, and threats." SWOT divides these into quadrants on a grid. The challenge of using this tool, says House, is that "it requires you to be somewhat dispassionate about strengths and weaknesses, and most people aren't with their own organizations."

To analyze new market opportunities: A simple, if crude, way is to draw up what's known as a strategic group map. You plot your company and your competitors on a grid, against two variables that most define success in your field, such as pricing and product quality. The grid, which is divided into quadrants, illuminates the strategic space that remains open.

To anticipate how competitors might react to your next move: Fleisher suggests returning to the four-corners analysis. As discussed on the second page, you match up your company against the competition in terms of goals, assumptions, strategies, and capabilities.

Several websites offer detailed descriptions of various analytical tools for intelligence. Start with mindtools.com, quickmba.com/strategy, and 12manage.com/i_s.html.

Ask Your Staff

"A lot of times, your sales folks know a lot about the competition, but nobody ever asks them," says MarketSmart's Toni Wilson. These employees don't always see collecting intelligence as part of their job description, so company leaders have to institutionalize it, in part by fully embracing it as well as recognizing employees who contribute. Consultants recommend encouragement such as regular contests that are perhaps more fun than profitable -- say, a "scoop of the month" party that rewards good tips with certificates for free ice cream.

"As long as you keep the feedback loop coming, it builds on itself without adding costs, because they're doing their jobs anyway," says consultant Leonard Fuld. "In fact, it makes their jobs more interesting." Make it easy for employees to participate, with simple forms (that are perhaps part of the standard reporting process) in addition to a central repository.

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