■ What is competitive intelligence?
Competitive intelligence (CI) has something of an image problem. The
term conjures up an image of elicit activities involving private detectives,
telephoto lenses and hidden microphones. While such images are not
completely unappealing, they are far removed from the truth. Put simply,
CI is a structured, ethical and legal process designed to gather, analyse
and distribute data/information relating to current and potential, com-
petitors. The key to successful CI is the ability to turn basic raw data into
actionable intelligence. Actionable intelligence involves providing deci-
sion makers with timely, appropriate information which facilitates action.
Additionally, CI stresses the need to protect business activities against
competitors’ intelligence gathering operations.
The need for CI has always been recognised. Indeed, Sun Tzu’s ‘The Art
of War’, written in China over 2000 years ago, makes many references
to CI.
Know the enemy and know yourself, in a hundred battles you will never
be defeated.
(Sun Tzu ‘The Art of War’ 400 BC)Such reference is equally applicable to today’s business world. Given the
established business trends of: (a) globalisation (b) rapid technological
development and (c) merger and acquisition, CI is likely to be a strategic
priority for most organisations. Currently management information tends
to fall into two main categories. Firstly, reporting and control information.
This monitors what has happened internally within any given period.
Secondly, information relating to key performance indicators providing
measures of success/failure relative to pre-set benchmarks (e.g. account-
ing ratios, profit and loss accounts, etc.). Such data is of course necessary,
but managers increasingly need to be forward looking. CI serves this
purpose.
Business success is as much determined by the actions of competitors, as the actions of the
organisation itself. For example, the success of Coca-Cola is partly determined by the actions
of Pepsi-Cola. This chapter explores the increasingly vital practice of competitive intelligence
and examines how organisations can use such a function to support/develop successful mar-
keting strategies. Gathering, analysing and disseminating intelligence relating to competitors’
strategies, goals, procedures and products greatly underpins competitiveness.