Insight

Ensure Competitive Intelligence Efforts are Helpful, not Harmful

Ensure Competitive Intelligence Efforts are Helpful, not Harmful | Accountant in Baltimore County | Weyrich, Cronin & Sorra

With so many employees working remotely these days, engaging in competitive intelligence has never been easier. The Internet as a whole, and social media specifically, create a data-rich environment in which you can uncover a wide variety of information on what your competitors are up to. All you or an employee need do is open a browser tab and start looking.

But should you? Well, competitive intelligence — formally defined as the gathering and analysis of publicly available information about one or more competitors for strategic planning purposes — has been around for decades. One could say that a business owner would be imprudent not to keep tabs on his or her fiercest competition.

The key is to engage in competitive intelligence legally and ethically. Here are some best practices to keep in mind:

Know the rules and legal risks.

Naturally, the very first rule of competitive intelligence is to avoid inadvertently breaking the law or otherwise exposing yourself or your company to a legal challenge. The technicalities of intellectual property law are complex; it can be easy to run afoul of the rules unintentionally.

When accessing or studying another company’s products or services, proceed carefully and consult your attorney if you fear you’re on unsteady ground and particularly before putting any lessons learned into practice.

Vet your sources carefully.

While gathering information, you or your employees may establish sources within the industry or even with a specific competitor. Be sure you don’t encourage these sources, even accidentally, to violate any standing confidentiality or noncompete agreements.

Don’t hide behind secret identities.

As easy as it might be to create a “puppet account” on social media to follow and even comment on a competitor’s posts, the negative fallout of such an account being exposed can be devastating. Also, if you sign up to receive marketing e-mails from a competitor, use an official company address and, if asked, state “product or service evaluation” as the reason you’re subscribing.

Train employees and keep an eye on consultants.

Some business owners might assume their employees would never engage in unethical or even illegal activities when gathering information about a competitor. Yet it happens. One glaring example occurred in 2015, when the Federal Bureau of Investigations and U.S. Department of Justice investigated a Major League Baseball team because one of its employees allegedly hacked into a competing team’s computer systems. The investigation concluded in 2017 with a lengthy prison term for the perpetrator and industry fines and other penalties for his employer.

Discourage employees from doing competitive intelligence on their own. Establish a formal policy, reviewed by an attorney, that includes ethics training and strict management oversight. If you engage consultants or independent contractors, be sure they know and abide by the policy as well.

 

Our firm can help you identify the costs and measure the financial benefits of competitive intelligence. Contact us today!

 

© 2021

 

Related Insights

How to keep cost cutting from increasing fraud risk | accountant in bel air md | Weyrich, Cronin & Sorra

Non-Profits

How to keep cost cutting from increasing fraud risk

In the process of slashing expenses? Just be careful not to cut essential items, such as sufficient staffing to maintain strong internal controls,…
What the new tax law could mean for you | accounting firms in baltimore | Weyrich, Cronin & Sorra

Tax Prep, Planning & Strategy

What the new tax law could mean for you

As 2025 began, individual taxpayers faced uncertainty with several key provisions of the tax law that were set to expire at the end of the year.…
4 common accounting errors for nonprofits to avoid | cpa in bel air md | Weyrich, Cronin & Sorra

Non-Profits

4 common accounting errors for nonprofits to avoid

It may be tempting to try to save money and perform your nonprofit’s accounting tasks internally. But if your staff isn’t experienced and…

Connect with us

Use the form below to send us an email. WCS responds directly to all inquiries and general questions within 24 hours of posting.

This contact form is deactivated because you refused to accept Google reCaptcha service which is necessary to validate any messages sent by the form.