Competitive Intelligence on a Shoestring

Getting the skinny on your competitors doesn't have to cost an arm and a leg. Check out these free or low-cost options.

Does the following scenario sound familiar to you? You have anidea for a product or service, and you're reasonably certainthe market for the product exists, so now you want to check out thecompetition. But you're in startup mode or have very limitedfinancial resources. So just how do you go about investigating yourcompetitors and gathering information without spending afortune?

The good news is, there are a number of free and low-costoptions available to help you collect that information. Here aresix budget-friendly choices:

1. Network. Tapping into your network of friends andassociates is an excellent way to leverage their knowledge of yourcompetition. Odds are, you'll be launching a business in anindustry you're familiar with and have some history with.Former business associates are an excellent resource. Before youstart making those calls, though, take a minute to collect yourthoughts and make a list of the information you want to gather(things like pricing, service, reputation and so on). Onceyou've determined your objectives, start contacting yournetwork to see what they know about your potential competition.

2. Talk directly to your competitors. What better sourceof information on your competition than the competitors themselves?Depending on the nature of your business, you'll either be ableto speak directly with the competition, visit their place ofbusiness, call them on the phone or visit their booth at atradeshow. The Society of Competitive Intelligence Professionals(SCIP) provides some guidelines on ethical conduct when talkingwith the competition.

3. Check out your competitors' websites. Ifyou're not comfortable speaking directly with your competitorsor this just isn't feasible, the next best way to get to knowyour competitors is a quick visit to their website. Websitescontain a wealth of information regarding your competition andoffer a good starting point for gathering a lot of information veryquickly. Also, the information you gather while searching yourcompetitors' sites can be used to help you refine additionalinternet searches on your competition.

The "About Us" or "Company" link willusually have information regarding the company's financialresults, their management team, any press releases and other usefulinformation, including whether the competitor is public or private.If the business is a publicly traded company, then you have a hostof other resources available to check them out, which we will covera little later. If the competitor is a privately held business,it'll be more of a challenge to obtain information but it canbe done.

The "Management" or "Team" link will listthe companies' executive team; you can use this information tocontact the executive team directly or search for additionalinformation on the target company. The "Press Releases"section should contain information regarding your competitors'partners, suppliers and customers. "Product" and"Services" pages contain data sheets, brochures, whitepapers and other reference material that you can use to comparewhat they have to offer against your product or service. The"Career" pages should provide an indication of positionsbeing posted and, if you read between the lines, can provide someinsight regarding which products or services are doing well.

4. Investigate the companies' Security ExchangeCommission (SEC) filings. Publicly traded companies in NorthAmerica and some other countries must file documents regarding thenature of their business and its financial performance. Thisinformation is intended to provide transparency and protectshareholders; however, because the documents contain a good deal ofinformation related to the companies' industries, markets,business structure, sales and overall performance, they'll alsobe useful to you.

In the United States, companies must file a detailed annualreport known as a 10K report (other countries have similar typedocuments). The 10K, or its equivalent, provides an excellentsource of information on the competition. SEC documents, including10K reports, can be found on Free Edgar, MSN Money andYahooFinance, among others. (Try looking for an "SECfilings" or similarly worded link on these sites.) Or you cancontact the SEC directly. (For the SEC in the United States, go tohttp://www.sec.gov/edgar.shtml. For the SecuritiesAdministration in Canada, go to http://www.sedar.com.

If you're interested in a broader perspective on thecompetitive environment, you can use Standard IndustrialClassification (SIC) codes to gather information on an industrialsector. SIC codes are categories of similar types of companies--forexample, SIC 2750 identifies companies in the commercial printingindustry--and there are reports that summarize financial results ofthe companies within each SIC code. To determine the SIC code foryour industry, you can do one of two things: You can track down the10K report of your closest publicly traded competitor and look itup in the report. Or you can visit the U.S. SEC site to view thecomplete list of SIC codes and choose the most appropriate one foryour business. There are also a number of websites, such as theNAICS (NorthAmerican Industry Classification System) Association andPerformance Plus, that have tools to generateindustry-specific SIC code reports for free or at a moderatecost.

5. Search online at the Dun & Bradstreet or Hooverssites.Dun &Bradstreet compiles credit reports, which contain informationon companies' payment and credit histories, on most smallbusinesses in North America. These reports can be ordered on anindividual basis, or you can purchase a subscription service at areasonable rate. Hoovers also generates company reports on most NorthAmerican businesses, but these reports contain revenue, employeeand general information regarding the companies. The reports fromHoovers range in content and price from about $10 to approximately$150, depending on the amount of content you purchase. Both Dun& Bradstreet and Hoovers offer a range of other services youcan utilize when gathering data on the competition. Dun & Bradstreet, for example, allows youto look up corporate hierarchies, so you can determine just whoowns your competitors, and find out your competition'scorporate structures. Hooversoffers the ability to search for companies based on their location(country, state, metro area), number of employees, annual sales andmore.

6. Expand your internet search by using search engines suchas Yahoo! or Google. There's an incredible amount ofinformation available on the internet; however, finding informationthat's relevant to your purposes can be a challenge. Knowingwhat type of information you're looking for before you startwill help refine your search. For example, if you're searchingfor product pricing information, use a keyword phrase like"price book" or "list price" plus the name ofthe company or the name of their product. A search like this shouldyield distributors that carry online pricing information regardingyour competitor. If you're searching for product information,use the competitor's product name in the search and a keywordphrase like "technical manual" or "productoverview."

The more specific your search criteria, the better the qualityand probability of finding the information you're looking for.The combinations and permutations of search criteria are vast, soknowing exactly what you're looking for and finding theappropriate search terms requires some creativity andexperimentation.

There are many other sources you can use to find the competitiveinformation you need. However, I've found that the free andlow-cost sources listed in this article provide the best value whenyou consider the time you'll invest and the amount ofinformation you'll gather. Good luck on your search!

Ian Graham is the principle and founder of Ottawa,Canada-based Klondike Marketing and Consulting, which specializesin business/market planning and competitive intelligence. Ian hasover 15 years business experience working for a number of leadingtelecommunications companies and has earned his MBA from theUniversity of Ottawa.

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