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An Overview of Competitive Intelligence

An Overview of Competitive Intelligence

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Published by Ashish
Competitive Intelligence
Competitive Intelligence

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Published by: Ashish on Mar 23, 2007
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An Overview of Competitive Intelligence
Competitive intelligence has undergone a groundswell of interest in recent years, aninterest in part fueled by an increasing availability of information itself (the much-toutedinformation explosion) and an increase reflected in the proliferation of commercialdatabases world-wide. What else is driving this growth?In purely competitive terms, no time before ours has presented so many opportunities or dangers. The recent changes in Eastern Bloc nations and the dawning of a unified Europecall for American corporations that can compete that operate at the edge of their knowledge and capabilities. European and Japanese companies have grown to hold adominant position in U.S. patents over the past twenty years. Japanese firms are using our universities as a competitive tool by funding programs and research. In 1989 WestGermany's world exports exceeded ours, as well as those of other developed nations.Even with its inevitable social and economic dislocations, a united Germany will be forceto be reckoned with.Given this changing scene, competitive intelligence is an activity of increasingimportance. Whether the need is for knowledge of an industry, a market, a product or acompetitor, reliable global information is central to our national success. As Frederick theGreat said, "It is pardonable to be defeated, but never to be surprised. With today'sinformation resources, and a CI program that reflects the needs of the corporation,surprises can be minimized.But this is a book about the process and resources of competitive intelligence, not aboutthe electronic transformation of information itself. It may well be that the electronicmanipulation and storage of information will have the effect on our times that theinvention of the movable-type printing press exerted on fifteenth-century Europe. For thefirst time in history, books and the literate population needed to read them came together.In much the same way, access to an increasing world of information empowers themodern corporation to understand itself and its markets more completely than ever  before.
Competitive Intelligence Definitions
We like to think of competitive intelligence as the selection, collection, interpretation anddistribution of publicly-held information that has strategic importance. Needless to say,there are other definitions of competitive intelligence. Here is a sampling.Business intelligence [an alternate term for competitive intelligence] is the activity of monitoring the environment external to the firm for information that is relevant for thedecision-making process of the company.
 
 
Competitor intelligence is the analytical process that transforms disaggregated competitor intelligence into relevant, accurate and usable strategic knowledge about competitors, position, performance, capabilities and intentions.
Competitive intelligence is a way of thinking. 
CI uses public sources to locate and develop information on competition and competitors.
Competitor intelligence is "highly specific and timely information about a corporation.
The objective of competitor intelligence is not to steal a competitor,s trade secrets or other proprietary property, but rather to gather in a systematic, overt (i.e., legal) manner awide range of information that when collated and analyzed provides a fuller understanding of a competitor firm's structure, culture, behavior, capabilities andweaknesses.
 
But definitions, to paraphrase Samuel Johnson, are like watches and none is ever exactlycorrect. True, we do competitive intelligence openly, but we would rather the targetcompany be kept in the dark. (Surprise is no small thing in competition.) True, we usuallydigest, analyze and arrange the materials in our reports, but sometimes, as in a databasesearch that lays out production figures for ten years in report format on a certain product,analysis and digestion may simply be gilding the lily. The heart of the matter issometimes just in the raw numbers or facts. True, we may sometimes need a wide rangeof material on a broad span of corporate functions, but sometimes a very focused andnarrow bit of information is what is required. (What kind of machinery are they using inthat plant?) And it is true that we only use publicly-accessible information, but sometimesour client would like to know the color of the CEO's shorts, and forgive us, but we'd liketo answer that question for our client too. Sometimes, somehow, the color of those shorts becomes known.Does corporate competitive intelligence bear any resemblance to the intelligence work done by the CIA, or in John le Carré novels? It is ridiculous to deny that there aresimilarities. To the extent that both require probing the environment for information thatcould hurt or help the client organization, yes, they are alike. In both cases, whether working for a corporation or for the government, the chase for information is interestingand exciting, as is getting "the goods for the client. Both require the selection, collection,interpretation and distribution of information. But beyond this, similarities fade. Projectsin CI can sometimes feel as if they were life-and-death matters, but they are not. Notreally. The CIA and other government intelligence agencies have been known to work outside of the law. Corporate competitive- or business-intelligence does not operate thisway.
 
Competitive intelligence has nothing to do with espionage!
 CI, as we will discuss it here, does not use illicit or illegal methods to accomplish itsgoals.Some common goals of competitive intelligence:
o
Detecting competitive threats
o
Eliminating or lessening surprises
o
Enhancing competitive advantage by lessening reaction time
o
Finding new opportunitiesCompetitive intelligence has such a broad scope it can use information related to almostany product or activity, or information on recent industry trends or issues (packagingcompanies track changes in environmental regulations constantly), or word aboutgeopolitical trends (e. g., today 30% of all business aircraft are sold to Pacific Basincompanies). CI can be driven by something as seemingly mundane as the need for a biographical profile of a newly appointed corporate executive, or something as importantas the news that a steel competitor is making major investments on R&D in ceramics andelectronics. It might even be the suspicion that a future competitor in an unrelatedindustry will soon threaten the corporation through new technology.A future competitor of the Royal Typewriter Company was introduced by a couple oyoung men, Steve Jobs and Steve Wozniak, ingeniously soldering a collection of micro-chips, wires and a cathode-ray-tube into a sort of jungle-gym computer in their Californiagarage. What came of this homely tinkering was the Apple Computer. Steve Jobs, andSteve Wozniak's work on the home computer started an industry, an industry that was toreshape the typewriter business, and a lot of other businesses as well, in profound waysover the years that followed. (Later, when IBM decided that Apple had defined a marketfor their PC, following Apple's lead definitively changed IBM's business.) A futuretechnological threat to the vacuum tube was the micro-chip, and a future competitor tothe buggy-whip business was Henry Ford's automobile. One question is, if they are inunrelated industries, how do you find them before it's too late?Some of these future competitors will bob to the surface, where good management withsound competitive analysis can spot them in time, and steer around them; others will ridein like an iceberg, silent, with 90% of their mass below the waterline where it can do themost damage. In some cases, vision and the ability to see what is coming are of little use."Let's not worry about it, those little cars aren't what Americans want to buy," is aninstance of Detroit's sighting the competitive iceberg back in the 1960s and not reactingfor thirty years. It is quite possible that Detroit auto manufacturers will never be able tocompete with the quality being built into Japanese and European cars. One commentator observed that the institutional personality of the Detroit auto manufacturers is so pervasive and strong that the only way it may be able to change its ways is to move toanother part of the country. "Send a bright young person full of new ideas to Detroit andwithin six months he or she will be thinking and talking the party line. These are good

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