Competitive Intelligence and Industrial Espionage: What’s the Difference?

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Photo Courtesy of BerishafjollaIn today’s market, staying ahead of your competitors can drastically effect how well your company performs. Knowing a rival’s next move and understanding their business strategy has helped corporations form their own business plans. That’s why many organizations are practicing “competitive intelligence,” loosely defined as the act of gathering and analyzing information about other businesses in a competitive market. Competitive intelligence exists in a grey area between industrial espionage and ethical information gathering. The difference between having a healthy competitive strategy and unethically spying on other companies is the way in which you collect and process this information.

Finding Information the Right Way

The idea of “staying ahead” of an opposing entity may evoke thoughts of ancient war mongers sliding figurines around an old map. Although competitive intelligence may seem like a battle strategy, the actual practice is much tamer. When done effectively, competitive intelligence is simply a way to better understand how your business fits into a specific market. It’s a relatively new term for a practice that has been in effect for decades. Every company will have a slightly different view on the term as they mold their marketing strategies to fit their needs. Some companies merely track their competitors, while others implement entire multilevel competitve strategies centered around the data they gather.

In the past, information on rival corporations was harder to come by through ethical means. Collecting data on other companies and firms seemed more like actual spying than basic market research. Now, all of that information is available freely on the internet for everyone to see. Many corporations post data online or send out press releases concerning their company. Even client testimonials that are publicly available are taken into consideration. With data so readily available, businesses can focus more on interpreting this information and using it to better their company.

When Competitive Intelligence Takes a Darker Turn

Although the rise of the internet and related technologies has been great for companies that want to stay up-to-date on their competition, it has also made it easier for organizations to collect information in unethical ways. Trade secret theft and patent infringement cases are abundant in the news, with some involving big corporations like Apple and Samsung. And with the recent discovery of Chinese workers hacking into American companies, more people are questioning the morality of competitive research. Hacking into a company’s computer system or posing as an employee and stealing information are both obviously unethical practices, but what about other intelligence-gathering initiatives? Where do we draw the line?

While it’s true that all companies will have a different opinion on the matter, one thing is clear: spying on other corporations does not fall under the umbrella of competitive intelligence. Many experts believe that companies are beginning to lose sight of what ethical market research is in their drive to get ahead. They put an emphasis on collecting as much data as possible, but don’t know what to do with it once they have it. Some organizations seek to hurt other businesses through competitive research, rather then using this knowledge to better themselves. And while this might not harm your company in a legal sense, it can hurt your company’s reputation in the eyes of the consumer. Many unethical information-gathering practices are still legal, so it is often up to the corporation to decide what is right and wrong. If you find yourself questioning whether or not your company’s actions are dishonest, it might be a sign that they are involved in some unethical practices.

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