Business competition In this modern day Is getting fierce. One of the key strategic tools usually used by executives in top companies to stay ahead of their competitors is though utilizing “Competitive Intelligence”. Describe what is Competitive Intelligence, it’s process, goals and some major benefits of using it in helping business to stay competitive in the markets. The competition in this new era of business environment is getting more and more intense from day to day as there are growing number of competitors which consequently create the winners and losers in the market place.
Douglas C. (1994) notes that business managers In the 1 sass have rediscovered the truth behind the observation of Mr… M. Porter, a renowned professor at Harvard Business School, that “competition Is at the core of the success or failure of firms”. For this Instance, business executives are in the front line to make the strategic decision for an organization in order to identify the potential risks and opportunity to prevent business from risky competitive situation based on available surrounding information.
One of the most important insight information and strategic tools that enabling the management to be able to manage the pressure In the competitive environment and eliminate the risk of failure Is through utilizing “competitive intelligence”. This essay will describe what competitive intelligence is, it’s process, goals and some major benefits of using it in helping business to stay competitive in the market. The definition of competitive intelligence may slightly vary from different resources.
According the website of Objectifications (2014) define that competitive intelligence “Is the continuous process of monitoring a firm’s Industry of market to Indecently (1) current and future competitors, (2) their current and announced from industrial espionage in that it uses legal and ethical means to gather and sift the publicly available information” while according to Wallace,. A, Loran’s,. J, and Leader,. C (1991) have defines that competitive intelligence “is at once both a process and a product, rooted firmly in the notion that ‘Increased understanding of competitors’ strengths and weaknesses … Dads to more effective strategy formulation’. Competitive intelligence thus ranks as ‘one of the most important strategic tools that managers possess. In general competitive intelligence is very crucial for business to identify risks and opportunities in the markets and make a more informed decisions. The process of competitive intelligence include the constructs of “planning and focus, collection, analysis, communication, process and structure, and organizational awareness and culture” (Wadded, 2012, p. 26-27).
The first stage of the process which is planning focus on finding out the exact demand in order to gather the right information. Fay (2007) has identified five strategic areas that an intelligence researcher needs to focus which are: the opportunities in the rarest place, threats from competitors, risks from the competitions, major vulnerabilities and live assumptions. The second stage is focusing on the collection of information from different sources both primary and secondary through using variety of techniques.
The example of primary source of information could be from government institution, staff of the companies, suppliers, customers, conference… While some of the general secondary source of information include magazines, TV radio, analyst reports…. The third stage of analysis is the most difficult part (Du Kit, 003) and this phase is mainly focus on converting the collected information and interpret them into “actionable intelligence” from which enabling management to make strategic and tactical decisions (Kandahar, 1997; Calf and Miller; Herring, 1998).
There are different kind of tools that could be used to analyze the information like PEST (Political, Economical, Social and Technological) analysis, Porter’s Five Forces Model, SOOT (Strength, Weakness, Opportunities, Threats) analysis, and competitor profiling. The end product of analysis phase could be developed in the form of some comment and activities such as “company profiles, competitive benchmarking, market or industry analysis, customer or supplier profiles, technology assessments, daily reports, strategic impact analysis, risk and opportunities bulletin… (Wadded, 2012, p. 28). The fourth stage which is the communication focusing on formatting the intelligence product into presentable form e. G. A report, a dashboards or a meeting before communicate to those with the authority and responsibility to act on the findings (Bose, 2007). The fifth stage ,process and structure, emphasize that appropriate policies, procedures and infrastructure allowing employees to contribute should be in place. The final stage of the process focus on organizational awareness and culture in the organization.
A successful organization should promote the culture of competitiveness and of exchanging knowledge and ides among individual and departments (Verviers, 2005). The ultimate goal of competitive intelligence process is the results to strategic decisions and actions undertaken by the organization based on the intelligence information in response to changes in competitive environment. The ability of a company to master information and knowledge forms an important factor in business success (Elephantine, 1995; Porter, 1990). Business are able to identify intelligence information (Wadded, 2012, p. 0). Certain strategic benefits from using competitive intelligence are that enterprises are able to: (1) find out new possible rivals or clients and underpin establishment of new businesses (2) identify potential technologies, products and processes could affect the company (3) pinpoint and analyze political or other legislative issue that could possibly affect the company (4) indemnify and analyze situation from competitors, customers, suppliers that can influence to the success or failure of the company (Wadded, 2012, p. 30).
Those benefit could consequently help companies to react quickly in revising their strategies and plan to maximize their competitive advantage (Wright and Calf, 2006). Competitive intelligence supports a competitive advantage and better organization performance by permitting better business planning; new product introduction success and new market development (Daft et al, 1988; DeWitt et al, 1997; Gordon et al, 1989; Porter, 1980). By analyzing the capabilities, vulnerabilities, intentions, and moves of the competitors, Competitive intelligence allows a company to anticipate market developments proactively – rather than merely react to them.
This in turn allows a company to remain competitive by improving its strategic decisions and leading to better performance against its competitors (Bose, 2007) and to be to create a defensible position over its competitors (Porter, 1985; Carry and Salvadoran, 2006). Competitive intelligence activities provide actionable intelligence information that enable executive management to make strategic decision and action aiming at enhancing the competitiveness and overall innovation performance of a firm (Ferrier, 2001).
To sum up, competitive intelligence is strategic management tools that could help the management of the companies to make a more informed business decision responding to the highly competitive markets condition where market intelligence information need to be monitored, analyzed and react on the timely basis to stay ahead from their competitors in the market. Moreover, competitive intelligence help company to be aware of other external environment factors( e. G. Politic, economic… ) hat could possibly effect to their current and long term business.