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CI is the use of public sources to develop information about the competition, consumers, and market environment (Miller & Business Intelligence Braintrust, 2002). CI aims to monitor a firm’s external environment for information relevant to its decision-making process (Choo, 2003).
Intelligence activities are based on the intelligence cycle. This involves: 1) Accurately identifying your information needs; 2) Collecting relevant information; 3) Analysing it; 4) Communicating the results to the people who need it; 5) Taking rapid and appropriate action (Besson & Possin, 1996; Martinet & Marti, 1995; Taborda & Ferreira, 2002).
Information about competitors has been a fundamental tool to be prepared and win confrontations since Sun Tzu wrote, in ‘The Art of War’, “Those who do not know the plan of their enemies are not able to prepare for negotiations,” what the Venetian Republic used well to maintain its power for more than two centuries. Using a network of ambassadors positioned in the major cities of Europe, collecting information and sending reports to the Venetian Doge, Venice could anticipate and defend its interests abroad to secure its position (Besson & Possin, 1996; Martinet & Marti, 1995).
Key Terms in this Chapter
Market Intelligence: Data and information collected by commercial and industrial organizations about their competitive environment to support good decision making. Makes possible to compare our market share with our competitors and take actions to maintain or improve that share.
Competitive Intelligence: The use of public sources to develop information about the competition, consumers, and market environment. It aims to monitor a firm’s external environment for information relevant to its decision-making process. It involves accurately identifying your information needs, collecting relevant information, analysing it, communicating the results to the people who need it, and taking rapid and appropriate action. Recently, Internet has rapidly become an extremely good source of information about the competitive environment of companies.
Competitors: A company in the same business or similar industry which offers a similar product or service. Competitors can lower the prices of products and services and gain a larger market share, reducing clients and lowering profits.
Strategy: The way an organization chooses to do his business in order to surpass competition and gain consumers preference. What is going to do, how, for whom, using what resources, and so forth. It’s the plan to conduct business, maximize profits, allocate the needed resources, and stay in the market as long as possible. Includes foresee what can happen, using forecasting methodologies and tools, in order to avoid problems or, if they happen, be prepared to minimize their effects.
Business Management: The activity of conducting all the necessary operations in order to make the organization grow, benefiting all the shareholders and stakeholders and the society in general. It involves several specialized functions like Finance, Marketing, Operations, Human Resources, Production, etc.
Market Trends: Trends begin by knowing the consumer's interests and needs. Market trends inform organizations about what products develop, for what customers, at what cost, through which distribution channels, reducing the uncertainty that a new product/service development always brings with it.
Social: Media: Online Web 2.0 tools like Wikis, Blogs, and Social Networking with a two way communication channel, allowing receiving and sharing information. Also allow the knowledge of competitor’s moves and the analysis of trends from the communications exchanged in the networks of individual consumers, making it easy for companies to develop solutions according to their clients and prospects desires.