Global case for competitive intelligence
THIS article is a follow up to the previously published article by the same authors titled: “Competitive Intelligence as a game-changer for competitiveness.” CI has become a global phenomenon as a result of technological developments. The advent of mobile application technologies and the wider availability of internet connections have made it easier for individuals and organisations to access large amounts of data.
Carlos and Herrera (2021) argue that the business environment is complex due to increasing global competition. The businessman needs to master all the information that has strategic value, and CI is positioned as the most appropriate tool to achieve this goal.
Theoretical debates have generally focused on the increasing roles and functions of CI on competitiveness. CI plays an intermediation role between economic development and its factors.
Sawka, Kenneth A (1996) in an article entitled, “Demystifying Competitive Intelligence,” defines CI as knowledge and foreknowledge about the external operating environment. He considers CI a prelude to informed decision-making, and further argues that intelligence can be viewed as actionable information about a customer, market situation, regulator, competitor or any other external influence.
The information is made actionable through careful analysis and interpretation, which turns it into intelligence.
The notion of actionable information is essential in the context of CI. The ultimate goal of each intelligence process should be to facilitate decision-making that leads to action.
A more unified view of CI was recently provided as “… the process and forward-looking practices used in producing knowledge about the competitive environment to improve organisational performance” by Madureira, Popoviˇc, and Castelli (2021) in an article, “Competitive intelligence: A unified view and modular definition.”
CI has become a global phenomenon in today’s environment of intensifying global competition as a result of big data, artificial intelligence, internet of things, 5G, cyber security.
The adoption and use of mobile applications such as WhatsApp, Facebook, Instagram, Twitter, and Telegram have accelerated this trend by enabling high-speed availability and transfer of large amounts of data collected and accumulated by individuals and organisations over the years.
Organisations and individuals alike that are capable of transforming this data into information and knowledge faster and quicker remain at the top and thus achieve a competitive edge.
CI’s benefits were long understood in pre-modern Germany. Modern Germany’s intelligence grew in the 18th century, and by scouting the European continent the Germans discovered they could compete with British and French firms by applying foreign scientific advances to their own industrial processes. Because of that the Germans rapidly developed their own base of education and research that was used as a foundation for technological innovation (Rouach and Santi, 2001).
In an article published in the European Management Journal, Rouach and Santi (2001) state that post-World War II Japan was early endowed with a grasp of the importance of intelligence. Japan and intelligence have grown hand-in-hand. Information serves as the axis and central structural support of the nation’s companies.
Fleisher and Wright (2009) agree that Japanese corporate CI capabilities are well developed, benefiting both commercial and governmental programmes, which in turn support Japan’s international competitiveness. CI has had a significant influence in the country’s prosperity and claims: “It is their absolute and unbending belief in CI as a strategic corporate tool to make the best decision possible. CI is the secret to their continued success”. In his article titled, “Why care about competitive intelligence and market intelligence? The case of Ericsson and the Swedish Cellulose Company,” Søilen (2017) argues that Japan and Sweden are mentioned as examples of countries that take the CI discipline seriously.
Global Intelligence Alliance (2004) provides the following arguments regarding the impact of intelligence: The impact of intelligence operations is indirect, just like in advertising, when the decision-maker does not know which part of the budget is actually responsible for the profit.
Similarly, there is usually no direct causal relationship between revenues and the money spent on a particular piece of intelligence.
Therefore, it may be difficult to justify intelligence expenditures. One way of looking at the gains is to evaluate how much money the company has lost by not having effective intelligence. Even so, it is difficult to prove that a lost deal or a late product launch was in fact due to inaccurate information about the competitors’ actions or customer preferences.
The benefits of CI are directly identifiable, although there are no quantitative measures to support this. An improved market position and improved revenue/ profits are not directly identifiable since they are “uncertain effects.”
These benefits fall into the category of bottom-line measures, which are usually the most commonly requested.