Using AI to Predict Your Competitor's Next Move

Nowadays, just being ahead of your competitors isn’t enough; you need to innovate to succeed. Most firms react to a competitor’s new strategy by following along instead of being the first to act.

Artificial intelligence changes the entire gameplay. “AI can monitor responses by the company and its competitors and measure the effectiveness of these strategies,” said Alok Gupta, Senior Associate Dean at the Carlson School of Management, University of Minnesota. Instead of reacting to competitors’ moves, savvy marketers count on AI to forecast actions and adjust or exploit any openings in the market as they occur.

This article explains how to apply AI to competitive intelligence, providing fundamental strategies you can implement immediately.

Why It’s Important to Predict Competitor Actions

Competitive intelligence focuses on knowing what your rivals do and how that affects your business strategy. Firms able to anticipate competitor actions have additional time to revise their plans, change their pricing or modify their marketing.

Usually, being first to market helps a business become the leader in fast-changing industries. For instance, when Netflix realized customers would choose streaming over DVDs and Tesla spotted the opportunity for electric vehicles, they didn’t just guess right. They carefully looked at the market and their competitors and acted quickly.

Predictive competitive intelligence supports organizations in deciding how to use their resources effectively. Rather than using the marketing budget on various initiatives, companies can put their resources where their competitors are weak or where they are stronger. By focusing on specific targets, you get the most out of your marketing budget and avoid wasting time on strategies your rivals will easily match.

Using AI to Watch Your Competitors

“AI analyzes patterns in competitors' actions—pricing, product launches, marketing campaigns. By identifying these trends, it can forecast their next steps, giving businesses a strategic edge,” said Tinglong Dai, PhD, Ferrari Professor of Business at Johns Hopkins University. Most traditional methods require frequent manual surveys, but AI can gather data from many companies at once and give instant updates on important changes.

What Software is Used to Watch Operations

Today’s AI monitoring tools can follow almost all aspects of competitors’ digital activities and market actions. They can spot tiny changes in landing pages, announcements of new products, pricing alterations or updated imagery and messages that suggest a new strategy.

Ads running on Google Ads, Facebook, LinkedIn and similar platforms give you insights into your competitors' activities. AI can follow changes in the amount spent on ads, who is being targeted, how messages are created and how the campaigns perform. It tells you what competitors are doing and how effective their approaches are at any given time.

It’s not enough to track keywords; you must analyze competitor content to see the larger strategy at work. By studying posting frequency, clusters of topics, types of content, social media interactions and target keywords, AI can find out how competitors prepare for a lasting place in the market.

Changes in pricing and promotions often indicate that a company is shifting its main business approach or trying to compete differently. With AI monitoring, you can see how prices, promotions, discounts and bundling affect your competitors’ revenue and how they compete in the market.

Changes in job postings and within organizations can help predict what competitors will be capable of and what strategies they might follow. When businesses begin recruiting specialists in certain areas, it usually means they have been making strategic investments for the past several months.

Recommended Tools

Here are some recommended tools for competitor tracking:

• Crayon: It does a great job tracking competitors in real time and checking their websites, content, ads and social media activity. Using AI, the platform highlights significant updates and removes unnecessary data so marketers receive only what they need to use. The platform is helpful because it puts changes into perspective about the whole industry.
• Kompyte: It is designed to create battle cards and track competitors, using AI to track profiles. The platform excels at turning competitor information into sales tools, making it attractive for organizations that want their marketing and sales teams to share competitive intelligence.
• Similarweb: It uses AI to analyze web traffic, marketing efforts, estimated competitor results on the internet, where their traffic comes from and which channels are most effective. It lets firms predict which strategies from competitors are effective.

Relying on AI to Predict What the Competition Might Do

Although tracking competitors is useful, AI’s predictability is much more important for a business strategy. Using information from history, market signals and data about behavior, AI allows companies to foresee competitors’ actions and take steps ahead of time. Here are different tactics to implement:

• Trend spotting: AI models are trained to identify new patterns in competitors' actions, which may suggest they are testing something or preparing for something bigger.
• Sentiment analysis: With natural language processing, sentiment analysis can monitor how customers respond to competitor announcements, new product releases or major company changes.
• Hiring signals: The earliest signs of a company’s strategy typically come from new hires. By studying LinkedIn job postings and identifying company changes, AI can estimate how products will be developed, where the market will expand and what technology will be used.
• Financial modeling: When AI analyzes earnings reports, investor presentations, funding notices and market performance data, it can forecast how competitors are likely to spend and their strategies.

Build a Simple Competitor Intelligence Workflow

Gathering competitive intelligence is only valuable when it leads to informed decisions and effective strategies. Top companies can transform data into practical strategies by using established workflows. Here are some examples:

Set Up Monitoring Alerts

Instead of checking every company, pay attention to those who can affect your market share, your prices or your overall strategy. Set AI monitoring tools to monitor significant website updates, new ad campaigns, changes in pricing, major content releases, and important company news.

Feed Insights Into a Dashboard

Use Airtable, Notion or competitive intelligence tools to organize your insights in one central place. The dashboard must group insights by competitor, strategic theme and importance.

Use AI Tools to Cluster or Analyze Shifts

AI technologies can be used to group and study trends by finding similarities between competitors or sets of data. While individual competitor actions may seem insignificant, AI can reveal overall trends or grouped competitive reactions in the market.

Hold Monthly Strategy Reviews

Hold a monthly review of strategies using predictions and patterns that have been noticed. Use the findings from competitive intelligence to help decide what products to focus on, how marketing messages should be updated, how to price and how to divide resources.

What You Should Be Aware of When Using AI for Keeping Tabs on Competitors

Although AI helps with gathering information for competition analysis, its use can lead to new problems that may distort important decisions if handled carelessly. Alok noted, "The limitations are going to be based on what strategies and metrics are initially developed and what strategies are used to update them.”

Here are some of the common challenges:

False Positives

The most significant risks associated with using AI for competitive intelligence are likely to be false positives and trends of overfitting. A short-term increase in a competitor’s advertising budget could indicate a change in their strategy, or it may simply be a seasonal or trial-based change. Before using AI-founded trends, ensure that humans review them for their usefulness in making decisions.

Tool Limitations

It’s also true that many AI systems struggle to interpret context. They might realize that another business has released a new ad campaign, but might not recognize the importance of when, what or who it targets. Experienced analysts are needed to interpret AI findings and place them in the proper context.

Compliance/Privacy Considerations

As AI’s ability to gather and analyze competitor information continues to rise, companies must pay closer attention to compliance and privacy. Specific AI monitoring approaches may mistakenly violate the rules of some platforms or act unethically in collecting data. Use only publicly available information and ensure that your methods comply with legal and ethical standards.

Use AI as Support, Not a Fortune Teller

AI can show that some competitors are focusing their advertising on particular groups, but it’s up to human marketers to determine if this offers an opportunity, poses a threat or should be handled with minor changes to strategy. The aim is to improve strategic thinking rather than replace it with AI.

To achieve good competitive intelligence, AI’s ability to spot patterns is paired with human insights into the market, what customers do and the outcomes of actions. AI help you find patterns and competitors, but a human can translate these findings into practical strategies that truly matter. Get started by combining human analysis with artificial intelligence to produce more valuable and detailed insights than either method could alone.

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