What is competitive intelligence?
“A formalized, yet continuously evolving process by which the management team assesses the evolution of its industry and the capabilities and behavior of its current and potential competitors to assist in maintaining or developing a competitive advantage” (Prescott and Gibbons 1993). CIP tries to ensure that the organization has accurate, current information about its competitors and a plan for using that information to its advantage (McGonagle & Vella, 1990)
Competitive Intelligence Different Than Business Espionage.
CI uses public sources to find and develop information on competition, competitors, and the market environment (Vella & McGonagle, 1987). Unlike business espionage, which develops information by illegal means like “hacking,” CIP uses public information – all information that can be legally and ethically identified and accessed.
Determination of Competitive Intelligence Information Needs
Effective implementation of its CIP requires not only information about the competitors, but also information on other environmental trends such as industry trends, legal and regulatory trends, international trends, technology developments, political developments and economic conditions. The relative strength of the competitor can be judged accurately only by assessing it with respect to the factors listed above. In the increasingly complex and uncertain business environment, the external [environmental] factors are assuming greater importance in effecting organizational change. Therefore, the determination of CI information needs is based upon the firm’s relative competitive advantage over the competitor assessed within the ‘network’ of ‘environmental’ factors.
Competitive intelligence is usually composed of five major areas of endeavor
Assessment of strategies
Competitor perceptions
Effectiveness of current operations
Competitor capabilities
Long-term market prospects
Strategic intelligence is concerned mainly with competitor analysis or gaining an understanding of a competitor’s future goals, current strategy, assumptions held about itself and the industry, and capabilities — diagnostic components.
Tactical intelligence is generally operational and on a smaller-scale, not so centered on being predictive.
Counter intelligence is defending company secrets. Every firm has competitors as interested in knowing your plans as you are in knowing theirs, maybe even more so.
CI is focused on decision-making
Seldom do people realize that business, just like life is merely a series of decisions. And global firms have a growing need for the necessary information on which to base decisions concerning the conduct and development of each of their firm’s strategic objectives, and the protection of their organizations against threats from their competitors.
The Cycle of Competitive Intelligence
There are five steps, which constitute this cycle:
Planning and direction
Collection and research
Processing and storage
Analysis and production
Dissemination and delivery
M.Shunmugasundaram, Lecturer, Dept of Business Administration, Kalasalingam University,
