Competitive Intelligence in Strategic Management
Competitive Intelligence is one of the most advanced practices in business on the managerial level. Competitive Intelligence has given rise to many strategic and organizational developments in business.
Competitive Intelligence was practiced to aid strategic decisions with valuable intelligence. Managers, Stakeholders and high table use competitive intelligence to build a comprehensive understanding of their situations. This understanding is then used to make important decisions to achieve objectives.
Competitive Intelligence company has served executives by aiding them with the ability to develop strategies. These strategies are designs to effectively achieve objectives in complex situations and in face of problems. Competitive intelligence has allowed businesses to innovate on all levels of operations in order to thrive and propose greater value.
In today's times, competitive intelligence has advanced to serve much more detailed purposes. It has developed to aid and support direct day to day operations for example sales. We refer to suc intelligence as tactical intelligence.
Competitive intelligence empowers the ability of an organization to seize opportunities more effectively. By providing insights and useful information, businesses can better position themselves in the market to improve their image in face of the target market. Furthermore Competitive intelligence provides the ability to adapt to future technologies and improve business.
Its purpose is short term and once the intelligence is utilized it becomes useless. Tactical intelligence helps deal with direct threats that competitors and external environments pose to the business.
On the contrary, Competitive Intelligence largely serves Strategic decisions. Strategic decisions are long term decisions taken by measuring and analysing larger scenarios. Strategic Intelligence is used to give direction to the business taking into account all the factors that affect business on a larger scale.
Strategic Intelligence takes into account the threats and opportunities in face of one's own Weaknesses and Strengths. This is perhaps a more detailed analysis than a simple SWOT because it looks into reasons as to why a factor exists. This gives valuable insights that are used in strategic planning.
The Process of Competitive Intelligence in Strategic Management
Competitive intelligence is a detailed and comprehensive process that involves gathering and collecting of data. Then analysing and processing it to extract information so that this information can be pondered upon to develop Intelligence. This Intelligence is used to fuel strategies in the management process.
Competitive Intelligence In strategic management can be further divided into three main steps. Firstly gathering and processing of intelligence to aid decisions. This stage can be described as strategy formulation. Secondly, This strategy is implemented or executed to see if it is possible to implement. This stage is called the Strategy implementation step.
Thirdly, the success of the strategy is understood using metrics to follow the progress. This step is called strategy evaluation. This process may be repeated using the information gathered from the strategy evaluation process. In order to work further and improve the strategy.
Businesses use Competitive Intelligence in strategic management to improve competitive advantage. So that they may generate more profits by improving their business and sales to earn more revenue.
Competitive intelligence also involves external and internal analysis to support the strategic management processes. Internal analysis is your company's SWOT analysis. It is a comprehensive study of your business environment. The main purpose of internal analysis is not just to identify your weak point and the strong points.
It's not even to understand opportunities and threats. In fact SWOT analysis is done to understand the deeper relation between strengths and opportunities and the relationship between weaknesses and threats. Ideally businesses want to link their weaknesses to opportunities and their strengths to threats. So that they may counter weaknesses and deal with threats.
The external analysis involves scanning the environment with respect to the Political, Economical, Social and Technological situation. However now an updated model of this is used which includes two added factors. The environmental factor and legal factor. The external analysis allows you to develop an understanding of the future trends that impact your business.
Linking external analysis with internal analysis would lead you to develop a comprehensive understanding of the situation. This understanding can be used to evaluate options and deduce the most useful one of them.
Furthermore, linking external and internal environments would reveal your ideal situation. So you may think that your ideal situation would be if you worked towards it. Now you may ponder what steps to take to achieve this goal. Hence you may develop strategy keeping in mind your goal and your abilities.
This process is called integration of internal and external information in the strategic decision making process. Businesses find themselves achieving their objectives much better than without competitive intelligence. Hence competitive intelligence greatly improves businesses performance in the long run.
Developing strategies in face of competition
Perhaps one of the most important things to talk about with competitive intelligence is competition. Competitors influence a lot of business decisions with their role to play in an external environment. Competitors pose direct and indirect threat to businesses performance.
Competitors are directly dealt with using tactical intelligence. However the factor of the competitors can be integrated in the strategic decision making process using competitive intelligence. We use a slightly modified term for intelligence related to competitors.
Competitive intelligence consultants gathers information and data about insights into competitor’s strengths and weaknesses. These insights are used to predict competitor’s behavior in the market and so their next move. Furthermore these insights are used to develop strategies in order to overtake competition.
Competition is perhaps the most significant reason for businesses to conduct competitive intelligence. Competition may also pose an indirect threat to business. Suppose a substitute product influences our market even though it belongs to a completely different industry.
Hence businesses need to look after such unforeseen competition as it has a huge impact on the success chances of business. Competitive intelligence provides the ability to have foresight to businesses. So that they may predict and plan for the future of their business. Thus ensuring the survival and dominance of businesses in their environment.