Competitive Intelligence Information

The Essence of Competitive Intelligence Information

In every industry, firms gather information from the external environment to understand and respond to that knowledge. Every company scoops for information about the industry and competitors to give them an edge. The process of gathering this information, filtering and putting it in a form that management can use the knowledge to their advantage is an important step which most firms do not pay much attention to. Most firms collect competitive intelligence information as part of a continuous process to help with planning and strategizing. This kind of information or knowledge help firms to focus, make decisions regarding their operations and functions. Kotler and Keller, Etzel, Walker and Stanton and Fleisher defined competitive intelligence (CI) as a process that leads to information generation from competitors and the industrial environment for planning and decision making. Santos and Herring agree with this definition. But Herring emphasizes the essence of planning as the focus for generating CI information. Prior examines organizational intelligence and points to it being a "high level, processed, exploitable information". This definition examines and differentiates general information from CI information. CI information is 'privileged' information that should be processed to meet the requirements of management and decision makers. Business organizations and firms use different variations of processes and methods to generate CI information but the aim of such processes is to give firms some knowledge that would lead to a competitive advantage. It creates an enabling environment for organizations to have a competitive edge in a market. This is a major objective of firms who want to achieve competitive advantage over its competitors in the same industry. Viviers and Muller posit that South African companies have confirmed that CI influences and "positively enhances competitiveness". The study overall affirms the importance of CI as a business process in South Africa that goes beyond customer and industry analysis to the entire external environment. Cavalcanti also confirms the positive relationships between CI and company success. Therefore failure by companies to undertake intelligence gathering could lead to bias decision making. Lack of external environment information can degenerate to poor business performance.

Wood and Takyi-Asiedu have lamented on the lack of tentative database for generating a list of all companies with some form of CI data in many developing economies. Some firms fall on research companies that are gaining grounds in developing countries. In Ghana where data compilation and storage is an issue and CI information a mirage, can one determine the role CI report plays in companies and how such information is used? The purpose of the study is to examine XYZ Company's CI system and the challenges it faces in compiling such data for processing. The specific objectives are:

to determine the role CI data collection plays in the company,

to identify the sophistication and intensity of CI data collection,

and determine the importance attached to CI information in XYZ Company.

Significance of Competitive Intelligence in Firms

CI has gained significant prominence in business management and practice. It adds value to a company's planning process and decision making. Porter and Millar alludes to information being a key to changing the tenets of competition. Viviers and Muller recognize CI as a strategic management process and Calof and Skinner perceive it as a systematic procedure for analyzing and disseminate information from the external environment. The Society for Competitive Intelligence Professionals define it as a managerial process that systematically mine for data that "can affect company plans, decisions and operations" for strategizing. For CI information to be relevant it should be part of the management system. The linkage of CI with knowledge of the industry and strategic management is a critical process for organizations. And Porter's competitive strategy basically respond to this process through the environmental forces and how to fashion it to suit a company using intelligence information. Therefore CI information plays a significant role in business management. And there is the need to leverage all the strategic processes, decisions and operations with intelligence information to the advantage of a firm. A business will succeed or fail depending on whether management is well informed about the customers, suppliers and the environment within which they operate. Various studies have championed the CI studies but most of these have used large established companies that have well established systems in operation. In Ghana, firms that embark on CI data generation and use it for business decisions do that in an informal manner with little or no budget or infrastructure to monitor the system, customers or external environment. Also some companies gather data on the industry and external environment but such information is of very little use to the firm if no action or response is generated from it. The extent or level to which companies are prepared to go to undertake competitive data generation determines it urgency and usage in the firm. Intelligence data collection is a continuous process but are companies constantly updating and monitoring competitors and the external environment? The focus on the role, level or extent of data generation and usage in the African context especially West Africa is limited. A notable study by Nasri in Tunisia explored the CI knowledge in companies and concluded that firms are "conscious" of its importance but are not using the appropriate measures to capture its full potential. In the case of Ghana, are firms aware of the relevance and advantages thereof of CI information to warrant its usage and prominence? This study is relevant because it sets the pace for other companies to re-examine CI activities and processes to take advantage of its potential in Ghana.

Literature Review

Intelligence activities as pointed out by Herring, Leitl and Green is the centre of business decision making which should be part of management planning process. Santos and Fleisher have added that there is the need to define concisely the types of data required, the process of filtering, analyzing and turning the data into information. The methods, intensity and importance of such data and the use of that knowledge in the firm depend on the quality and extent or length to which the firm would go to get the data. The concept of intelligence information, knowledge and its implications for decision making are important business management concerns. Santos and Correia's studies on CI captures the essence of changing data and information on competitors and external environment into reliable and valuable material. Drucker linked CI to knowledge by differentiating and defining each scope. Competitor data that is 'endowed with relevance and purpose' is intelligence information, and exploiting and using the valuable information by management is the key to 'knowledge'. Knowledge is information acquired that can transform business operation. It is a major resource of the firm. Knowledge-based theory as employed in management, marketing and information system research by Penrose, Conner, Barney, Thierauf, Davenport and Prusak and others drive business decision making and information is the resource that feeds it. Researchers have argued that it is an off shoot of the resource-based view of the firm that goes a stage urther but some critiques have challenged its tenet as a theory. Information and knowledge operate in tandem. Intelligence information processing and knowledge play vital roles in competitive advantage. It is the knowledge acquired about competitors, customers and the entire external environment and how it is used to the benefit or advantage of the company that makes the difference.

Competitive Intelligence Processing

Competitive intelligence as a 'total process' have been discussed by Kahaner, Lux and Peske and other researchers. Some researchers call it a cycle or system whiles other see it as a process. The CI cycle or intelligence cycle is a "continuous seamless process" Figure 1 illustrates the process:

Figure 1. The competitive intelligence process

CI process basically start with data mining and conversion into 'intelligence' information which when given to management becomes knowledge that supports decision making. The planning in CI process identifies the intelligence needs of the firm, determines the focus area of that 'need' and plans subsequent activities. The techniques employed for generating the data with schedules of activities and processing tools must be laid out. Herring, Wanderley, and Lux and Peske have emphasized the need to define the sources to be used, "the volume, quantity and quality", access and ease of processing, the budget outlay available to be expended since it affects the outcome. The transformation of data to intelligence information is the crux of the process. Intelligence information results must be transmitted or disseminated timely to management. The value of information diminishes with time therefore timely execution of results of intelligence knowledge and subsequent feedback is important. Gilad and Gilad in their studies defined major steps of CI to include generating and mining for data from a large variety of sources. Fleisher emphasizes the variety of source to ensure adequate coverage of the entire business environment. CI process in the age of technology has seen great strides. The worldwide web and the search engines allow for basic data generation. Computer programmes like the SEO Profiler, a competitive intelligence tool enables firms to "spy on the back links of competitors' analytical reports and websites". CI digests like the Business Monitor and in the brewery industry the Global Brewer Analyser Report (www.rnrmarketresearch.com/global-brewer-analyser-report-2013-market-report.html) are essential reference guide. Many other sources abound making the process more of the budget available to dispense and experience of the personnel involved in such operations a priority. The processing should lead to decision making that brings about a change or an advantage to the firm.

Knowledge Management and Usage

Information is not valuable if the knowledge is not understood, not relevant, timely and cost effective and does not lead to better performance or competitive advantage. Every organization wants to achieve competitive advantage and knowledge of the external environment and its usage can lead to such difference. The ultimate is for management to formulate fact based actionable decisions from the knowledge acquired from CI activities. Kahaner posits that for firms to be in tune with the current speed and pace of business, management decisions should flow in a faster and more fluent manner. CI information should be a part of management processes to allow for proactive operations. Gross calls the CI information "a catalyst in the decision-making process". The implementation of CI in organizations seems simple but can be challenging

Management needs to understand the importance of CI and allocate enough resources or budget for operation of the intelligence unit. Failure to do that can lead to poor management and usage of this knowledge. The management of knowledge in most organizations is reflected in the decisions made by the firm and their performance in the industry. Further, organizations can safely anticipate changes by competitors, industry and the entire external environment to gear up for such "predictable surprises". Competitive Intelligence provides a foreknowledge that can put firms in a better position. The management and distribution of CI information in organizations determines the seriousness attached to such knowledge.

The understanding of CI practice is not significantly recognized in Ghanaian companies. Beyond sales records, market share, and innovative products implementation not much is done. Organizations profess to have research and development department which operates to generate customer and external environment information. But core intelligence reports that identifies opportunities and provide actionable information for management consumption seems to be given minor attention. Hinson has put forward various arguments that firms in Ghana "need to strategize to take advantage of the internet" if they should be better positioned. Some large organizations especially the multinational companies use formal methods for CI whilst informal methods are employed by the small and medium scale organizations. But all in all are there budgets allocated for CI and is it being used to the advantage of the organization? The exploratory review of XYZ Company should provide insight for a more in-depth analysis of CI role in organizations in Ghana.