Competitive Intelligence

Analysis Tools For

Economic Development
June 2009

www.intelegia.com
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Introduction

•What is competitive intelligence?

•Why analyze?
•Top 5 analysis tools
•Tips to remember

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What is Competitive Intelligence?

As defined by Wikipedia (June 2009):

Competitive Intelligence is the action of gathering, analyzing, and applying information about
products, domain constituents, customers, and competitors for the short term and long term
planning needs of an organization. Competitive Intelligence (CI) is both a process and a product.
The process of collecting, storing and analyzing information about the competitive arena results in
the actionable output of intelligence ascertained by the needs prescribed by an organization.

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Why Analyze?
• Clients (or internal users) do not have the time to wade
through raw intelligence
• Capture insights from public information sources to gain a
competitive advantage
• Present possible answers to established Key Intelligence
Topics (KITs)
• Supply a value added aspect to a solid research process

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Top 5 Analysis Tools

• SWOT Analysis
• Competitor Profile
• STEEP Analysis
• Porter’s Five Forces
• SPACE Matrix

Call Isabelle Poirier, Investment Strategist, at +1 (514) 276-

1700 Ext. 104 to inquire about your customized seminar
solution to learn about these tools plus five more analysis
frameworks for economic development.

5 © Intelegia, 2009
Analysis Tool #1: SWOT Analysis
Description:
An established framework that aids in taking inventory of firm’s
overall Strengths and Weaknesses; and industry’s
Opportunities and Threats. By identifying each element,
decision makers can utilize the resources necessary to overcome
the challenges that are present in firm and industry efficiently.

Objective:
To discover strategic options to reach objectives by assessing a
firm’s position within its industry given its internal and
external environments.

Information Needed:
When collecting the raw data for the SWOT analysis, it is
important to be free from bias. It is essential that each element is
judged fairly by experience personnel or by a group. Once this
aspect is settled, the information must originate internally for the
strengths and weaknesses. Information can come from industry
reports, articles and experts’ insights. With all the gathering
information, decision makers can complete the first part of the
exercise by answering the following questions located in each
quadrant.
I) What is the firm doing well? (S)
II) What can the firm improve upon? (W)
III) What are the opportunities for the firm to grow? (O)
IV) What are the threats or changes in the external
environments that the firm should avoid? (T)

Bombardier Transportation Company

Profile on LinkedIn

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Analysis Tool #2: Competitor Profile
Description:
An overview of competitors’ past and present activities in the
industry. The profile entails examining management, products
and or services and financial status of competitors.

Objective:
To provide decision makers with detailed information that can
influence plans to overcome competitors’ strengths and exploit
weaknesses.

Information Needed:
The initial step should entail gathering all available information
regarding competitors. Dated information should not be discarded
however current details are preferred. Once the information is
collected, the second task of profiling can begin. The information
must be categorized under the following sub-profile groups.

I) Information to help senior management prepare for a

meeting with clients, potential partners, etc. (ie, news,
Call Isabelle Poirier, Investment Strategist,
profiles of decision makers, historical data) at +1 (514) 276-1700 Ext. 104 to inquire
II) Information to analyse the opportunity to acquire a company about your customized seminar solution to
(ie, financial data, list of customers, strength and learn about this tool plus more analysis
weaknesses assessment)
frameworks for economic development.
III) Information to build awareness internally about a competitor
(ie, pricing, bidding data, description of service)
IV) Information to consider an opportunity for partnership (ie,
past and existing partnerships, management style,
corporate objectives)

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Analysis Tool #3: STEEP Analysis
Information Needed:
Description:
An analysis framework that examines the macroeconomic Socio-Cultural:
environment that a firm competes in based on five factors • Population growth rate and age profile
socio-cultural, technological, economic, environmental, political • Population health, education and social mobility, and attitudes to these
• Population employment patterns, job market freedom and attitudes to
work
Objective: • Press attitudes, public opinion, social attitudes and social taboos
• Lifestyle choices and attitudes to these
To prepare firms to deal with external factors that could affect • Socio-Cultural changes
business initiatives at the present time or the future. When there are
Technological Environment:
favorable conditions in the environment, firms can use their • Impact of emerging technologies
expertise to benefit from the changes to become more competitive. • Impact of Internet, reduction in communications costs and increased
remote working
• Research & Development activity
• Impact of technology transfer
Economic
Current and project economic growth, inflation and interest rates
• Unemployment and labor supply
• Stage of business cycle
• Labor costs
• Levels of disposable income and income distribution
• Impact of globalization
• Likely impact of technological or other change on the economy
• Likely changes in the economic environment
Environmental
• Air and water quality
• Sources of energy
• Pollution levels
• Raw Materials
• Level of environmental regulation
Political
• Government type and stability
• Freedom of press, rule of law and levels of bureaucracy and corruption
• Regulation and de-regulation trends
• Social and employment legislation
• Tax policy, and trade and tariff controls
• Environmental and consumer-protection legislation
• Likely changes in the political environment

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Analysis Tool #4: Porter’s Five Forces Model
Description: Existing companies (Rivalry)
Created by Harvard Business School professor, Michael Porter, the a) How many firms are active in the industry?
five forces analysis framework attempts to assess the level of
competition within an industry. The process is based on b) What are the fixed costs assigned to operating
examining the influences on a sector on the basis of: in the industry?
c) How do products / services differ from other
1. Existing companies, firms in the industry?
2. Potential new companies
3. Substitutes for products offered Potential new companies (Barriers To Entry)
4. Suppliers a) Are patented needed to compete in the
5. Customers industry?
b) What are the costs associated with entering in
By understanding the forces placed on the sector, decision makers the industry?
may be in the best position to realize the structure and dynamics of a
sector. c) Is there a sense of brand loyalty among buyers
/ customers?
Objective: Substitutes for products offered
To provide insights into competitive environments on a national a) How easy can a product or service be
and global scale. Results from the analysis exercise can be used to substituted?
make the right strategic decision to become a leader within an b) Can the product or service be offered at
industry. cheaper price?
c) What is buyers’ willingness to accept
Information Needed:
substitutes?
Gathering information for this framework is rather straightforward.
Details which corresponds to each force should be recent and reflect Suppliers
the present day realties in the industry. The information should a) How many suppliers exist for a given product in
answer the following questions: the industry?
b) What are the costs associated in switching
suppliers?
c) Do suppliers produce specific materials for an
unique product?
Customers (Bargaining power)
a) How many customers exist in the industry?
b) What is role of quality when obtaining products or
services
c) Is it easy for buyers to switch their supplier?

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Analysis Tool #4: Porter’s Five Forces Model

Potential
Entrants

Threats of New
Bargaining Entrants
Power

Suppliers Rivalry Among Competitors Buyers

Bargaining
Threats of Substitutes
Power

Substitutes

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Analysis Tool #5: SPACE Matrix
Description:
The Strategic Position and Action Evaluation (SPACE) matrix is a Environmental Stability (ES) Technological Change
valuable method for analyzing the competitive position of an Rate of Inflation
organization. It makes use of two internal dimensions (financial Demand Variability
Price Range of Competing
strength and competitive advantage) and two external dimensions
Products
(industry strength and environmental stability), to determine the Barriers to Entry into The Market
organization’s strategic posture in the industry. The firm’s strategic Competitive pressure and Price
posture is then classified broadly as: aggressive, competitive, Elasticity of Demand
conservative or defensive. 
Industry Strength (IS) Growth and Profit Potential
Objective: Financial Stability
The key objective of utilizing the SPACE matrix is to identify the Technological Know-How
posture of a firm within an industry in terms of strategic initiatives. Resource Utilization
Capital Intensity
Ease of Entry Into The Market
Information Needed: Productivity or Capacity Utilization
In order to apply the SPACE matrix, researchers are called upon to
collect qualitative and quantitative information in the form of
aspects that can describe environmental stability (ES), industry Competitive Advantage (CA) Market Share
strength (IS), competitive advantage (CA) and financial strength Product Quality
(FS) Product Life Cycles
Product Replacement Cycles
Customer Loyalty
Competition’s Capacity Utilization
Technological Know How
Vertical Integration

Financial Strength (FS) Return On Investment

Leverage
Liquidity
Capital Required / Available
Ease of Exit From The Market
Risk Involved In Business

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Analysis Tool #5: SPACE Matrix

FS

Co ns e rv a t iv e S t ra t e g y Ag g re s s iv e S t ra t e g y

De f e n s iv e S t ra t e g y Co mp e t it iv e S t ra t e g y

ES

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Tips To Remember
• Always keep in mind the analysis tool(s) that will be
applied while searching for relevant and timely
information
• Take the time to perfect your analysis skills by attending
seminars and working on case studies
• The more strategic insights presented to management, the
more value the competitive intelligence function will
have.

For more tips, read the Tools For Thought blog at

http://intelegia.com/mediacenter/tools_for_thought/

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About Intelegia

Intelegia, a subsidiary of E&B DATA, is a company that strives to assist

individuals in understanding the changes in the business environment
through internet intelligence. Via training, consulting and publications,
Intelegia aims to provide the best approaches and tools to obtain the best
information and utilize decision-making frameworks.

Call Isabelle Poirier, Investment Strategist, at +1 (514) 276-

1700 Ext. 104 to inquire about your customized seminar
solution to learn about these tools plus five more analysis
frameworks for economic development.

14 © Intelegia, 2009