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Knowing The Competition
By Mark McNeilly

Creating a winning strategy depends a lot on competitive intelligence. As Sun Tzu said, "Know the enemy and know yourself; in a hundred battles you will never be in peril." So what are the hallmarks of a good competitive intelligence capability?

Creating a winning strategy depends a lot on competitive intelligence. As Sun Tzu said, "Know the enemy and know yourself; in a hundred battles you will never be in peril." So what are the hallmarks of a good competitive intelligence capability? Below is a list of important attributes a CI organization should have. Beneath that is a self-test you may want to take for your company.

Hallmarks of Leadership Competitive Intelligence:

  • Depth of Knowledge: The CI team needs to be able to not only tell its executives what the competition can do but what they will do. This means going beyond understanding their products and financials to understand how the competitor's executives think. Knowing their assumptions about the marketplace, their goals and their strategies will enable the CI team to predict a competitor's future actions.
  • Finding Weaknesses as well as Strengths: Many CI teams tend to be seen as naysayers by line managers. They have a reputation of always pointing out the strengths of the competition but missing their weaknesses. As Sun Tzu stated, "Now an army may be likened to water, for just as flowing water avoids the heights and hastens to the lowlands, so an army avoids strength and strikes weakness." CI professionals can help their company by focusing their company's strategy on highly vulnerable weaknesses of competitors, upon which their company can launch an attack.
  • Wargaming Capability: Many companies launch attacks on their competitors without thinking through the potential consequences. The CI team can help by "wargaming" the outcomes of these attacks; anticipating how competitors will react to the attacks and the determining second and third order effects of the interchange. Only then can the final outcomes be projected.
  • Executive Relationships: CI teams need to have good working relationships with their executives. As Sun Tzu said, "Of all those in the army close to the commander none is more intimate than the secret agent." While CI professionals are not secret agents, they do provide critical intelligence for the executives to act upon. If the CI team does not have access to executives then all their knowledge is wasted.


Here is the self-test of eleven questions that will provide insight on how well your company performs competitive intelligence. To take the test, answer each question with a simple "yes" or "no". Total up the first ten questions and consult the scoreboard to see how the results. Question 11 is a bonus question and the scoreboard provides feedback for that separately.

We have a formal intelligence-gathering and analysis process

We have a good understanding of our competitions' offerings and how they bring them to market

We know how well our competitors are doing financially, their business model, revenue sources and cost structure

We have a good understanding of the capabilities of the competitors--what they can and can't do

We know the goals of our competitors and which markets are most important to them

We know the strategy and plans of our competitors in detail

We know the mindset of the CEOs and key executives of our top competitors-how they view the industry, the degree of risk they are willing to take, the priority of their business goals and their individual ambitions.

We know how our top competitors will respond in key situations, based on knowing their mindset and how they've reacted in the past.

We regularly war-game our strategies vs. our competition; role-playing different scenarios that may occur so we can adjust our strategy & tactics

Competitive intelligence and analysis significantly influences the direction of our strategy and plans


  • If you score 0-3 you are operating without "eyes and ears." You have little other than surface knowledge of what your competition is doing and what little you do have is not actionable. You may be in for a surprise from a competitor.
  • If you score 4-7 you are probably ahead of most of your competitors. According to one survey, about 40% of large and mid-size companies still have no formal intelligence gathering process. However, there is still much room for improvement, for although you have actionable intelligence, you probably have not yet used it to wargame competitive strategies.
  • If you answered "yes" to 8-10 questions you are practicing leading-edge competitive intelligence. Congratulations!

Mark McNeilly brings Sun Tzu's strategic principles to life as the author of  Sun Tzu and the Art of Business; with TV and radio interviews and with seminar presentations. For more information visit

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