Why Competitive Intelligence?
The fictitious company SENS (acronym of Sistemas de Entrenamiento y Simulación), specialised in the development of computer simulation systems, has identified an opportunity to access the Security and Defence sector in Spain. To this end, the management of SENS has generated a Competitive Intelligence Need to acquire knowledge about the operating environment of the sector.
In order to respond to the established Intelligence Need, SENS must focus on Competitive Intelligence as opposed to Business Intelligence. Business Intelligence is focused on the analysis of the company's internal data, related to its production, financial, logistic and human resources activities.
Competitive Intelligence, on the other hand, aims to provide the company with knowledge about the conditions of its environment, facilitating decision-making by management. For this reason, SENS needs to create a Competitive Intelligence Unit that allows it to identify the risks and opportunities associated with its entry into the Security and Defence sector.
Types of Competitive Intelligence
Competitive intelligence can be conducted in two different ways: offensively and defensively. Although different, the two approaches are complementary, so the Competitive Intelligence Unit should implement both to satisfy the Intelligence Needs set by the management.
Offensive Competitive Intelligence is mainly based on the active gathering and analysis of relevant information about the company's environment. However, offensive Competitive Intelligence also includes the planning and execution of influencing actions. These actions are designed to stimulate the behaviour of individuals and organisations to support the strategic objectives of the company.
Defensive Competitive Intelligence is related to those actions aimed at the integral protection of the company by planning and establishing measures to protect the human, legal, social, economic and technical assets of the entity. Counterintelligence is another fundamental pillar of defensive Competitive Intelligence , as it allows protecting the company's information and knowledge, as well as establishing defences against the intrusion of outsiders.
Competitive Intelligence can be applied to various specialised environments depending on the needs of the company:
- Sectoral: referring to the monitoring of the characteristics and movements of the sector in which the company operates.
- Technological: dedicated to the observation of the technological context in order to identify new developments that may pose a threat or present an opportunity.
- Legal: monitoring of laws and regulations affecting the development of business activity.
- Political: policy follow-up at national and international level, including monitoring of crisis situations.
- Financial: dedicated to monitoring markets and the financial situation of countries.
- Security: linked to the protection of intelligence and business.
- Influencing: focused on supporting lobbying and public relations activities.
Analysis techniques are an essential tool for a Competitive Intelligence Unit. The members of the unit should be able to recognise which technique should be used to respond to the Intelligence Needs. Some of the most important techniques will be developed below.
SWOT (Strengths, Weaknesses, Opportunities, Threats and Weaknesses)
This technique allows a self-assessment of the strengths and weaknesses of our company, as well as the identification of threats and opportunities that affect the general environment, a specific sector or a particular competitor. SWOT analysis can also be carried out in reverse, i.e. analysing the strengths and weaknesses of our competitors.
The criteria of the SWOT analysis of our company will be marked by the Intelligence Needs designated at that specific moment, and can be applied to any of the previously mentioned environments.
The use of this technique makes it possible to identify changes and trends that may pose a threat to the company's strategic objectives. At the same time, it allows for the recognition of opportunities that may offer the company a competitive advantage.
Competitive profile matrix
This technique allows us to identify the position of our company's main competitors by considering their strengths and weaknesses. To do this, we must first identify those factors that are key to success for the sector in which we operate. Subsequently, the competitive profile of the adversary in each of the factors identified is evaluated.
This system can be used to rank competitors according to their strengths and weaknesses and to assess the threat they pose to one's own competitiveness.
Competitors' shareholding maps
This technique is useful to carry out whenever a change in the shareholding or in the companies in which our competitor has a stake is detected. These maps allow a complete and simplified representation of our competitor's business network.
This chapter has assessed why SENS needs to create a Competitive Intelligence Unit to understand its operating environment and plan according to its business strategy. It has identified the existing types of Competitive Intelligence, its application environments and the essential analytical techniques for its correct development.
The next chapter will detail the sources of information used in Competitive Intelligence.