While some businesses may view competitive intelligence as merely “keeping an eye on our competitors”, the evidence indicates that competitive intelligence is much more and requires business discipline and applied knowledge management. Competitive intelligence can enable the business/organisation to maintain a sustained advantage.
To assist with defining competitive intelligence, a number of leading competitive intelligence practitioner’s beliefs and definitions are examined:
Competitive intelligence is the key fundamental of any business strategy and is the method of turning raw data into valuable information, turning that valuable information into strategy, and turning strategy into business performance which can maintain a company’s advantage (Agarwal, 2006).
Nonaka states that knowledge and its strategic use is one sure source of sustained competitive advantage for the organisation (1991), therefore competitive intelligence can create the ability to develop, use, retain and transfer knowledge to become the lifeblood for the organisation.
Luecal and Dahl believe that competitive intelligence is information and knowledge to be gained and used to formulate strategies to maintain effective dealing with three factors: competitors, customers and regulators (1995).
Another definition is that ‘competitive intelligence’ is a systematic programme for gathering and analysing information about a competitors’ activities and general business trends to further the company’s own goals (Kahaner, 1996).
Each has merit. However, Kahaner’s definition is simple and direct and will be used for the remainder of this research report.
“The next information revolution is well under way… It is not a revolution in technology, machinery, techniques, software or speed. It is a revolution in CONCEPTS ...” (Drucker, 1998).
Without argument, we are now in the Information Age, with more than 50 percent of Gross Domestic Product (GDP) within major OECD economies now based on the production and distribution of knowledge (The Knowledge Economy, 1999). Within a knowledge economy, the primary asset and the source of competitive advantage is a company’s / organisation’s ability to effectively manage knowledge (Murphy, 2005).
Furthermore, Drucker mentions that in a knowledge economy, it makes sense that competitive advantage would be gained from the specialised knowledge and skills from that labour force (1991).
As competitive intelligence involves the use of public sources of information to develop intelligence data on competition, competitors and market environments (McGonagle and Vella, 2002), this data can be used as a knowledge asset and is a subset of the knowledge management process (Agarwal, 2006).
Santosus and Surmacz (2001) states “Effective Knowledge Management is critical because in today’s information-driven economy, companies uncover the most opportunities and ultimately derive the most value – from knowledge assets rather than physical assets” (as cited in Agarwal, 2006).
While these statements are valid, Rothberg & Erickson point out that, if unmanaged, there can be conflict between knowledge management and competitive intelligence values (2005). The fundamental value of knowledge management is to leverage that knowledge through learning and sharing with any and all individuals within and/or outside collaborative companies. However, the core objective of competitive intelligence is to gather and analyse information about competitors’ activities, to further a company’s goals. This would imply that any knowledge obtained should be more guarded and/or strategically restricted to limited personnel to reduce the risk of losing this competitive knowledge (Rothberg & Erickson, 2005).
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