A news item is not a strategy
A competitor announces an agreement, files a patent or takes part in a trade fair. The fact may be interesting, but on its own it does not show that the competitor is entering a new market, has a technological advantage or will carry out an investment. Competitive intelligence begins when we relate the move to the actor, its track record, its capabilities, the constraints it faces and our own decisions.
To avoid turning headlines into conclusions, it helps to separate four levels:
- Observation: what happened, when and where it is recorded. Fictional example from the case: «Competitor C —which is exploring the same technology as Company A— announces a collaboration with a test centre».
- Context: what prior activity of the actor and what market conditions we know of. A collaboration may continue a long-standing line of work.
- Hypothesis: what that move could indicate. For example: «Competitor C is exploring industrial validation of a technology».
- Implication: what Company A would have to do if the hypothesis gained evidence: talk to customers, review capabilities or open targeted monitoring.
The distance between observation and implication must remain visible. A hypothesis does not become true because its strategic consequences are interesting.
Interactive · Explore step by step
From news item to implication, in four levels
Climb level by level with the same Competitor C move. The distance between observation and implication must remain visible.
The four levels of reading a competitive move, with Competitor C.
1. Observation
What happened, when and where it is recorded.
2. Context
The actor's prior activity and known market conditions.
3. Hypothesis
What the move could indicate. It does not become true because its consequences are interesting.
4. Implication
What the organisation would have to do if the hypothesis gained evidence.
A competitive sheet that withstands questions
A good profile includes: business question; scope; cut-off date; observable activity; grouped signals; declared versus inferred positioning; demonstrated capabilities; evidence gaps; rival hypotheses; next indicators; the decision it serves. This is more robust than a list of strengths and weaknesses with no sources.
It is useful to classify signals by dimension: product and technology, investment and operational capacity, alliances, customers and markets, talent, industrial property and corporate communication. The same announcement may touch several dimensions, but it should not be counted as multiple independent corroborations.
A mature reading incorporates alternative hypotheses. If Competitor C takes part in a pilot test, it could be preparing a product, seeking funding or exploring an opportunity with no commercial commitment. What evidence would let us tell these explanations apart? For example, supply contracts, new facilities, specific job offers or commissioning data.
Interactive · Classify
Classify the signals by dimension
Place each Competitor C signal in its dimension. One announcement can touch several, but it does not count as several corroborations.
Activity: classify a competitor's moves by dimension.
Interactive diagram
The five forces as a monitoring map
Tap each force to see what to monitor and which question it helps answer. Start at the centre.
The five forces as a monitoring map: this activity needs JavaScript.
Each force is an area of the competitive environment with its own signals.
What to monitor
Launches, prices, alliances, key hires and technology moves by direct competitors.
Question it answers
What are competitors doing that could change our position?
In the fictional case
Competitor C is exploring the same technology (file C01–C04): is it a strategic move or an isolated test?
What to monitor
Companies from other sectors, startups, funding and weakening entry barriers.
Question it answers
Who could enter our market and with what advantage?
In the fictional case
Companies from neighbouring sectors that adopt thermal storage could compete with new offerings.
What to monitor
Supplier concentration, technology dependencies, prices and supply capacity.
Question it answers
How much power do those who supply us with critical items have?
In the fictional case
Supplier B develops the technology (records S01–S16): if few players dominate it, their bargaining power grows.
What to monitor
Customer requirements, demand concentration, shifts in preference and regulation that affects them.
Question it answers
What will customers demand and how much pressure can they apply?
In the fictional case
Company A's industrial customers could demand storage solutions to meet new energy targets.
What to monitor
Different technologies or solutions that meet the same need.
Question it answers
What other solution could make ours unnecessary?
In the fictional case
Batteries and other forms of storage compete with thermal storage for the same need.
Five forces model: Porter, M. E. (1979), “How Competitive Forces Shape Strategy”, Harvard Business Review, 57(2). Used here as a guide to organise monitoring, not as a complete analysis.
Company A case · simulation
Fictional caseCompany A case: from alarm to diagnosis
In the fictional Company A universe, three indications appear: a press release about tests, a hire in thermal engineering and a patent application that seems close to the monitored field. The analyst checks that the patent does not demonstrate industrial performance and that the hire does not identify the project. The defensible conclusion is that observable exploratory activity exists, not «commercial entry confirmed».
Company A defines a proportionate response: keep an actor sheet, ask the sales managers whether any related requests appear, and set a review trigger if an industrial installation with verifiable data is announced. It does not need to react to every signal as if it were a threat.
Educational simulation: fictional information and organisations.
Ethics and legal limits: obtaining information legitimately
Competitive intelligence is only useful if its origin can be explained. Working with information obtained lawfully and fairly does not reduce the scope of the analysis: it lets you use it, share it and defend it before management, before a client or before the competitor itself.
What the law protects. In the European Union, Directive (EU) 2016/943 protects trade secrets: information that is not generally known or readily accessible, that has value precisely because it is secret and that its holder protects with reasonable measures. In Spain it is implemented by Law 1/2019 on Trade Secrets. The Directive considers lawful the acquisition by independent discovery or creation, by observation, study, disassembly or testing of a product made available to the public (unless a valid obligation prevents it) and by other fair commercial practices. It is unlawful, among other cases, if it is obtained without consent by accessing documents or files without authorisation, in breach of a duty of confidentiality or by practices contrary to fair commercial conduct. When the work involves personal data —executives, employees, contacts— data protection rules (GDPR) also apply.
What the profession expects. The code of ethics of SCIP, the international professional association for competitive intelligence, asks you to comply with all applicable laws and to identify yourself by name and organisation before any interview.
| Situation in the Company A case | Appropriate? | Why and alternative |
|---|---|---|
| Analysing the technical brochure that Competitor C hands out at a trade fair | Yes | It is information made available to the public. Record source, date and context. |
| Buying equipment marketed by Supplier B and testing it | In principle yes | It is a public product; first review the purchase or licence terms in case a valid obligation limits it. |
| Interviewing a former client of Competitor C about their experience | Yes, with conditions | Identify yourself and say which organisation you work for; do not ask for information that person must keep confidential. |
| Asking a former employee of Supplier B about unpublished plans | No | It may induce the disclosure of trade secrets. Their experience and professional skills are theirs; the specific plans of their former company are not. |
| Posing as a client or candidate to obtain information | No | It is a deception contrary to the professional code of ethics and may be an unfair practice. |
| Using another person’s password to enter a competitor’s customer portal | No | It is unauthorised access. |
| Automatically collecting professional profiles of Competitor C’s employees | Requires prior analysis | It involves personal data and the site’s terms of use: consult your data protection officer or legal counsel first. |
Rule of thumb: if you could not explain how you obtained a piece of information in front of the affected organisation, stop and consult. Always record the origin of each piece of evidence: it is the same traceability that the rest of the method requires.
Limit: this block is training guidance, not legal advice. Its application to a specific case depends on the jurisdiction and the facts, and requires legal review.
Interactive · Decide
Is it appropriate to obtain the information this way?
Rule of thumb: if you could not explain how you obtained it in front of the affected organisation, stop and ask. Training guidance, not legal advice.
Activity: decide whether each information-gathering practice is appropriate.
Analysing the technical brochure that Competitor C hands out at a trade fair.
Buying equipment sold by Supplier B and testing it.
Interviewing a former client of Competitor C about their experience.
Asking a former employee of Supplier B about unpublished plans.
Posing as a client or candidate to obtain information.
Automatically collecting professional profiles of Competitor C employees.
Do it yourself
Do it yourself · Competitive profile in 25 minutes
Choose a competitor or use Competitor C. Write a specific intelligence question, identify five dated signals, classify their evidence, formulate at least two alternative hypotheses and write three indicators that could discriminate between them. Conclude with a decision you would not yet take for lack of data.
Deliverable: competitive profile sheet with rival hypotheses and a future watch list.
Common mistakes: calling a press release a «strategy»; turning patents into sales; adding up duplicated mentions as corroboration; comparing actors with different source coverage; copying an AI-generated SWOT without tracing evidence.
Verifiable competitive profile
Place competitive moves and their implications in context.
See the template →Matrix of hypotheses and alternatives
Assess rival explanations of a signal.
See the template →Check it · closed answer
Group the evidence before counting it
Four links can be a single observation.
C01 · Technical collaboration announcement, dated.
See the answer
Answer: Independent observation. It lets you state that a collaboration has been announced, not that an investment has been committed.
C02 · Engineering job vacancy, dated.
See the answer
Answer: Independent observation. A related profile is being sought; it does not prove a new project.
C03 · Patent application identified.
See the answer
Answer: Independent observation. Protection is being requested; it does not prove manufacturing or freedom to operate.
C04 · Review that repeats C01.
See the answer
Answer: Repeats another observation. C04 depends on C01: it is grouped as dissemination, not as corroboration.
And now, your own answer
This part needs professional judgement: there is no automatic marking. Complete your work in the practice, rate it with the lesson's rubric and compare it with the indicative solution.
What your answer should include
- At least two rival hypotheses that explain the same signals (the indicative solution works with three: H1 product, H2 exploration, H3 defensive protection).
- Indicators that discriminate between them.
- A decision you would not yet take for lack of data.
Indicative solution
H1, product in preparation; H2, exploration with no commitment to deployment; H3, defensive protection. The corpus is compatible with all three. Contracts and installations would support H1; only new collaborations without operations would support H2; patent activity without investment could be compatible with H3, but would not prove it. Decision: keep monitoring and trigger a review on independent proof of operation or a contract; do not claim leadership.
Illustrative solution for a fictional case: reasoned alternatives are valid.
Optional extensionExtension · What is the competitor doing, and what do we not know?
The usual challenge is not a lack of news but the apparent coherence of news that may be unrelated. Suppose that Competitor C —an actor in the Company A case— announces a university collaboration, posts a process engineer vacancy and appears in a patent application. It is tempting to write «Competitor C is preparing its commercial entry». There are at least three problems: the press release does not establish disbursement or contractual commitment, the vacancy may cover a replacement and the patent application proves neither grant nor entry into production. The decision the evidence does allow is to open a hypothesis of exploratory activity and design a test, not to attribute a confirmed plan to the actor.
Reproducible actor file
| Simulated evidence | Admissible reading | Reading it does not allow | Check needed |
|---|---|---|---|
| C01: technical collaboration announcement, dated | A collaboration has been announced | Industrial investment has been committed | Published scope, budget and duration |
| C02: engineering vacancy, dated | A related profile is being sought | Headcount is growing for a new project | Number of vacancies, role and destination |
| C03: patent application, identified | Protection is requested for an invention | It is manufactured, marketed or can be freely used | Family, legal status and technical match |
| C04: review that repeats C01 | The announcement has been disseminated | It is independent corroboration | Identify the common primary source |
Independence rule: four links can be a single observation. To evaluate a hypothesis, group items that come from the same origin before counting corroborations.
Rival hypotheses and triggers
- H1 · Product-oriented development: you would expect an operating demonstrator, customer integration or verifiable contracts.
- H2 · Exploration and visibility: you would expect collaborations and publications, with no verifiable investment or deployment.
- H3 · Defensive protection: patenting activity might have no commercialisation counterpart.
None is given an invented percentage. Record the current support (insufficient, partial, consistent), contrary evidence and the data point that could shift the assessment. If a verifiable contract appears, it improves the support for H1; it does not automatically eliminate the other alternatives.
Quality test and Company A’s decision
An analyst hands in this sentence: «Competitor C will lead the technology in 12 months». They must rewrite it as: «Competitor C shows exploratory activity across several sources; there is not enough data on industrial adoption. Company A can keep quarterly monitoring and bring the review forward if an operational installation or a customer contract is confirmed». The corrected sentence does not predict, explains scope and ties a reaction to verifiable signals.
Optional extension (35 min): prepare an R11 sheet with four records, mark which one is a duplicate, write H1–H3, assign each a discriminating test and write a reversible decision for Company A. Acceptance: no inference appears as fact, the records keep their origin and date, and the decision answers the initial question.
References and limits
- Richards J. Heuer, Jr. · Center for the Study of Intelligence, CIA. Psychology of Intelligence Analysis (cap. 8, Analysis of Competing Hypotheses) (1999). DocumentBasis of the rival-hypotheses method: the aim is to refute hypotheses with inconsistent evidence, not to confirm one.Reference verified on 2026-10-18.
- European Parliament and Council of the EU · OJ L 157, 15.6.2016. Directiva (UE) 2016/943, de 8 de junio de 2016, relativa a la protección de los conocimientos técnicos y la información empresarial no divulgados (secretos comerciales) (2016). DocumentEuropean framework for trade secrets: which information is protected and which forms of acquisition are lawful.Reference verified on 2026-10-18.
- Strategic Consortium of Intelligence Professionals (SCIP). SCIP Code of Ethics (online consultation). DocumentProfessional ethics in obtaining information.Reference verified on 2026-10-18.
- Head of State · Spain. Ley 1/2019, de 20 de febrero, de Secretos Empresariales (BOE núm. 45, de 21 de febrero de 2019) (2019).Spanish implementation of the protection of trade secrets.Reference consulted on 2026-10-18.
- Innguma · training material. Inteligencia competitiva (presentación Innguma · CEEI) (undated).Competitor analysis.Innguma training material, not public.
- Company A is a fictional case: its data, companies and figures do not describe real markets or organisations.
- The analyses do not assign probabilities or scores without an explicit rule. Scenarios are plausible worlds, not forecasts.
- The block on ethics and legal limits is training guidance, not legal advice.
Intelligence Lab · L06
Hypothesis matrix
Ready to apply it? Open the Hypothesis matrix in the Lab and download your rival explanations and the available evidence. Output: hypothesis matrix. Works in the browser, no server, no account and no connected AI. The result may need reviewing and adapting to your case.