Competitive intelligence: Business competitiveness and competitive intelligence
Competitive intelligence is a management practice employed by enterprises to identify and assess market trends, to prevent and control risks, and to develop a sound corporate strategy. Competitive intelligence refers to the process of selecting, collecting and analyzing data to filter and ‘translate' it into information that is useful and accessible to all members of the enterprise. Competitive intelligence can be thus used in several ways (see Rouach and Santi, 2001). Competitive intelligence provides the means to identify shifts in market trends (e.g., customers' preferences) and to assess the impact of changes in marketing. Competitive intelligence can also be utilized as a tool to monitor sector/industry/market competition (e.g., new competitors and product). From a wider dimension, competitive intelligence provides a process to gather data about political and regulatory trends that may affect the firm. In addition, competitive intelligence enables companies to process the data originating from social media in order to make it useful for strategic purposes.
Competitive intelligence thus contributes to the competitiveness of a firm. Business competitiveness is the capacity of a firm to sustain its long term profitability Any measure of competitiveness, therefore, needs to concern itself with competitive intelligence in particular and with business practices in general. In a join Business Competitiveness Project, the IMD World Competitiveness Center's (WCC) in collaboration with Accenture, Switzerland, has developed such a tool. The Business Competitiveness Survey assesses the behaviors and practices of firms which allow them to sustain their performance in the long-term. Among the variables cover by the Survey there are competitive intelligence-relevant indicators that assess, for example, the manner in which firms manage their contacts and interactions with clients, how well they understand their customers' needs and preferences and the firm's use of customized marketing strategies.
At the general level of competitiveness, the IMD World Competitiveness Center's(WCC) World Competitiveness Yearbook incorporates a Business Efficiency factor that analyzes the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner. It does so by studying a country's productivity and efficiency, its labor market, finance, management practices and the prevalent attitudes and values.
The Business Competitiveness Survey complements the structural analysis conducted by the Yearbook by focusing on the behaviors and practices of firms and in so doing incorporates indicators that allow for the assessment of competitive intelligence.
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Deschamps, J. P. and Ranganath Nayak, P. (1995) Product Juggernauts: How Companies Mobilize to Generate a Stream of Market Winners. HBS Press
Gilad, B. (2003). Early warning: using competitive intelligence to anticipate market shifts, control risk, and create powerful strategies. AMACOM Div American Mgmt Assn.
Rouach, D. and Santi, P. (2001) "Competitive Intelligence Adds Value: Five Intelligence Attitudes," European Management Journal. Vol. 19, No. 5, pp. 552–559
Suggested websitesThe IMD World Competitiveness Center's Yearbook