Imagine that you are the CEO of a national chain of pet stores, Pets R Us. Define competitive intelligence and explain how you would use it to assess the current reality/business climate.

Question

What will be an ideal response?

Answer 1

Competitive intelligence means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately. Managers never want to be caught unaware when a competitor offers a distinctive new product or service.

Gaining competitive intelligence isn't always easy, but there are several avenues, and most of them are public sources. They include (1) public information and advertising, (2) investor information, such as corporate annual reports, and (3) informal sources, such as trade show gossip and information from company salespeople.

As the CEO of Pets R Us, you will want to carefully monitor the activities of your key competitors, like Petco and PetSmart. You'll read as many of their advertisements as you can find, both in print and online. You will certainly visit their stores and their websites to see what products and services they offer. As you walk around the stores, you may think of ways to improve your own stores. You will assuredly read their annual reports, looking at their profitability and benchmarking it against the profitability of PetSmart; this financial information may help you determine whether your costs are too high, your revenue is too low, and so forth. At trade shows and conventions, you'll visit the Petco and PetSmart booths, listening for news that may be useful to you. If you hire staff members who formerly worked for Petco or PetSmart, they may be able to share information about why they think their former employer is successful—or how the company failed its customers.