You are on page 1of 14

Competitive Intelligence

Analysis Tools For


Economic Development
June 2009

www.intelegia.com
www.twitter.com/citweetz
Introduction

•What is competitive intelligence?


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

2 © Intelegia, 2009
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.

3 © Intelegia, 2009
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

4 © Intelegia, 2009
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

6 © Intelegia, 2009
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. Call Isabelle Poirier, Investment
Strategist, at +1 (514) 276-1700
I) Information to help senior management prepare for Ext. 104 to inquire about your
a customized seminar solution to
meeting with clients, potential partners, etc. (ie,
news,
learn about this tool plus more
profiles of decision makers, historical data) analysis frameworks for economic
II) Information to analyse the opportunity to acquire a development.
company
(ie, financial data, list of customers, strength and
weaknesses assessment)
III) Information to build awareness internally about a
competitor
(ie, pricing, bidding data, description of service)
IV) Information to consider an opportunity for
7 partnership (ie,
© Intelegia, 2009
past and existing partnerships, management style,
Analysis Tool #3: STEEP Analysis
Information Needed:
Description:
An analysis framework that examines the Socio-Cultural:
macroeconomic environment that a firm competes • Population growth rate and age profile
in based on five factors • Population health, education and social mobility, and
socio-cultural, technological, economic, environmental, attitudes to these
• Population employment patterns, job market freedom and
political
attitudes to work
• Press attitudes, public opinion, social attitudes and social
taboos
Objective: • Lifestyle choices and attitudes to these
To prepare firms to deal with external factors that • Socio-Cultural changes
could affect business initiatives at the present time or Technological Environment:
the future. When there are favorable conditions in the • Impact of emerging technologies
• Impact of Internet, reduction in communications costs and
environment, firms can use their expertise to benefit
increased remote working
from the changes to become more competitive. • 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
8 © Intelegia, 2009 • Likely changes in the political environment
Analysis Tool #4: Porter’s Five Forces
Model
Description: Existing companies (Rivalry)
Created by Harvard Business School professor, Michael a) How many firms are active in the
Porter, the five forces analysis framework attempts to
assess the level of competition within an industry. industry?
The process is based on examining the influences on b) What are the fixed costs assigned to
a sector on the basis of: operating
in the industry?
1. Existing companies, c) How do products / services differ from
2. Potential new companies
3. Substitutes for products offered other
4. Suppliers firms in the industry?
5. Customers Potential new companies (Barriers
To Entry)
By understanding the forces placed on the sector, a) Are patented needed to compete in the
decision makers may be in the best position to realize
the structure and dynamics of a sector. industry?
b) What are the costs associated with
Objective: entering in
To provide insights into competitive environments the industry?
on a national and global scale. Results from the c) Is there a sense of brand loyalty among
analysis exercise can be used to make the right buyers
strategic decision to become a leader within an / customers?
industry.
Substitutes for products offered
Information Needed: a) How easy can a product or service be
Gathering information for this framework is rather substituted?
straightforward. Details which corresponds to each b) Can the product or service be offered at
force should be recent and reflect the present day cheaper price?
realties in the industry. The information should c) What is buyers’ willingness to accept
answer the following questions:
substitutes?
Suppliers
a) How many suppliers exist for a given
product in 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
9 © Intelegia, 2009 industry?
b) What is role of quality when obtaining
Analysis Tool #4: Porter’s Five Forces
Model

Potential
Entrants

Threats of New
Bargaining Entrants
Power

Suppliers Rivalry Among Buyers


Competitors
Bargaining
Threats of Substitutes
Power

Substitutes

10 © Intelegia, 2009
Analysis Tool #5: SPACE Matrix
Description:
The Strategic Position and Action Evaluation (SPACE) Environmental Stability (ES) Technological Change
matrix is a valuable method for analyzing the Rate of Inflation
Demand Variability
competitive position of an organization. It makes
Price Range of Competing
use of two internal dimensions (financial strength
Products
and competitive advantage) and two external Barriers to Entry into The Market
dimensions (industry strength and environmental Competitive pressure and Price
stability), to determine the organization’s strategic Elasticity of Demand
posture in the industry. The firm’s strategic posture is
then classified broadly as: aggressive, competitive, Industry Strength (IS) Growth and Profit Potential
conservative or defensive.  Financial Stability
Technological Know-How
Resource Utilization
Objective:
Capital Intensity
The key objective of utilizing the SPACE matrix is to Ease of Entry Into The Market
identify the posture of a firm within an industry in Productivity or Capacity Utilization
terms of strategic initiatives.

Information Needed: Competitive Advantage (CA) Market Share


In order to apply the SPACE matrix, researchers are Product Quality
Product Life Cycles
called upon to collect qualitative and quantitative
Product Replacement Cycles
information in the form of aspects that can describe Customer Loyalty
environmental stability (ES), industry strength (IS), Competition’s Capacity Utilization
competitive advantage (CA) and financial strength (FS) 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

11 © Intelegia, 2009
Analysis Tool #5: SPACE Matrix

FS

C onservative S trategy Aggressive S trategy

Def ensive S trategy C ompetitive S trategy

ES

12 © Intelegia, 2009
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_though
13 © Intelegia, 2009
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