Their activities range from comparing datasheets to digging into pricing to actually playing with competitors software after buying a license via a shell or a partner (very common practice done by startups)
Later on companies do more extensive research before launching product lines. At this stage people doing research are still pretty close to the product being launched.
As companies get larger, product launch costs and separation between execs and people who do work grows. At this point there is extensive review before execs write the big checks. A lot of times it's outside consulting.
At Amazons scale and their quarterly KPI pushing it's not that much of a stretch that they will have a dedicated org which scours internet for any and all intelligence techniques that would give them an edge.
It can go further than that, it’s not exactly unheard of for companies to actively reverse engineer competitors software to try figure out its secret sauce.
Examples I’m aware of specifically being looked at as “competitive intel” in the industry I work in are stuff like antivirus or IDS signatures, WAF rules, and vulnerability check rules/scripts for scanning tools.
It’s not a bad thing either - I’ve had to reverse engineer checks/rules used by commercial vulnerability scanners to figure out why certain scanning tools kept having false positives.
Automotive engineers used to rent competitor's vehicles, tear them down, rebuild, and hope the rental company didn't notice (or at least that their low level grunts appreciated whatever maintenance the engineers' low level grunts performed while putting everything back together, and kept their mouths shut)