Demystifying COMPETITIVE INTELLIGENCE by Estelle Metayer

A rapidly increasing number of companies are setting up a Competitive Intelligence function and thenew discipline seems to be fast emerging as one of the hottest trends in management today. To manyexecutives, Competitive Intelligence (CI) seems to be nothing more than what marketing or marketresearch departments have been doing for years. It is simply a process a company uses to analyzeinformation on its competitors, market and customers. Properly informed, the company can anticipatechanges in the industry and make the right strategic decisions. Indeed, companies have beenconducting CI for years, and it usually was part of the market analysis, strategic planning or marketingfunction.But many of these same companies have failed to see the difference between CI and conventionalmarketing. CI relentlessly emphasizes the use of analytical tools to analyze a combination of documented and anecdotal information, and ensures that significant efforts are undertaken todisseminate this information throughout the organization. As a result of the confusion betweenmarketing and CI, and the lack of an established, formal structure for creating the CI function, seniorexecutives have been overwhelmed by the amount of raw information sent to them. This is why, inmost companies, the CI function has often been viewed as nothing more than a glorified libraryservice. However, there are compelling differences between CI and conventional marketing, andunderstanding them can give a company a strategic advantage. These differences will be describedbelow, as will the best - and worst - practices for setting up and maintaining an effective CompetitiveIntelligence function.COMPETITIVE INTELLIGENCE: A NEW DISCIPLINEThere are a number of formal definitions of Competitive Intelligence. The Society of CompetitiveIntelligence Professionals (SCIP) defines it as "the legal collection and analysis of informationregarding the capabilities, vulnerabilities, and intentions of business competitors, conducted by using'open sources' and ethical inquiry." There is also a broader definition: CI is the team process of discovering, analyzing and delivering intelligence from publicly available, non-proprietary informationsources for the purpose of becoming more competitive in the marketplace. Three factors have driventhe emergence of Competitive Intelligence:1 The arrival of new competitors, combined with the need to grow, has triggered a huge demand formarket and strategic information.The danger of getting blind-sided by unexpected new entrants is greater than ever. The largebookstore chains did not anticipate the surge of Amazon.corn, nor did telecom operators expect thatrailway and energy companies would become competitors. An early warning and quick responsesystem will be key in the 21st century Above all else, CEOs hate to be surprised.2 Increasing industry consolidation has made it harder to know what competitors are doing fromconventional, publicly available sources.It has become increasingly difficult to read the annual report of a large company and be able to drawmeaningful conclusions about the new products they are developing, or to even know the revenue of adivision that is a competitor. At the same time, newer, innovative sources such as Companysleuth(www.companysleuth.com) are offering more information than ever before, while the utility of traditional sources of information (e.g., annual reports) is declining.3 New tools and sources of information have allowed non-research specialists to access informationthey need, and to easily analyze, synthesize and distribute it.

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Q1. Summary of the understanding of the concept

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