Competitive intelligence process and tools for intelligence analysis
| Published date | 25 April 2008 |
| Pages | 510-528 |
| Date | 25 April 2008 |
| DOI | https://doi.org/10.1108/02635570810868362 |
| Author | Ranjit Bose |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Competitive intelligence process
and tools for intelligence analysis
Ranjit Bose
Anderson School of Management, University of New Mexico,
Albuquerque, New Mexico, USA
Abstract
Purpose – The purpose of this survey research is twofold. First, to study and report the process that
is commonly used to create and maintain a competitive intelligence (CI) program in organizations. And
second, to provide an analysis of several emergent text mining, web mining and visualization-based CI
tools, which are specific to collection and analysis of intelligence.
Design/methodology/approach – A range of recently published research literature on CI
processes, applications, tools and technologies to collect and analyze competitive information
within organizations is reviewed to explore their current state, issues and challenges learned from their
practice.
Findings – The paper provides executive decision makers and strategic managers a better
understanding of what methods are available and appropriate to the decisions they must make and the
steps involved in CI undertaking.
Originality/value – The findings of this research provide the managers of CI programs a context for
understanding which tools and techniques are better suited to their specific types of problems; and
help them develop and evaluate a usable set of tools and best practices to apply to their industry.
Keywords Data collection,Data analysis, Competitive strategy
Paper type General review
1. Introduction
As economic competition in today’s knowledge economy keeps increasing globally,
public sector organizations are becoming more sensitive to shrinking budgets and
realizing the need to invest/divest of capabilities (technology, resource, and other
intangibles) to meet marketplace demand. Private sector companies as well are faced
with an increasing competitive environment where sustained competitive advantage is
increasingly becoming difficult to maintain. Consequently, many organizations,
whether public or private, are initiating their own competitive intelligence (CI) services
to advise their decision makers. Intelligence differs from data and information because
it requires some form of analysis, whose purpose is to derive some meaning from the
piles of data and information that bury every organization. CI is conceptualized as a
process of monitoring the competitive environment, with a goal to provide actionabl e
intelligence that will provide a competitive edge to the organization (Kahaner, 1998).
CI is a vital component of a company’s strategic planning and management process.
It pulls together data and information from a very large and strategic view, allowin g a
company to predict or forecast what is going to happen in its competitive environment.
By analyzing the capabilities, vulnerabilities, intentions, and moves of the competitors,
CI allows a company to anticipate market developments proactively – rather than
merely react to them. This in turn allows a company to remain competitive
by improving its strategic decisions and leading to better performance against
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
IMDS
108,4
510
Received 1 August 2007
Revised 1 December 2007
Accepted 13 December 2007
Industrial Management & Data
Systems
Vol. 108 No. 4, 2008
pp. 510-528
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570810868362
its competitors. Sometimes CI is confused with business intelligence (BI). The
difference between BI and CI is that BI is internal intelligence about and within one’s
own company, whereas CI is external intelligence about the firm’s competitors. CI
examples include analysis of the manufacturing or service capabilities of the
competitors; analysis of alliances and/or joint ventures entered into by competitors; the
competitor’s future plans and strategies for specific markets, or product lines; reason s
behind changes in the corporate or business unit strategy, etc. (Britt, 2006).
Recent advances in information technology and their applications have also helped
benefit CI. The integration of knowledge management throughout organizational
structures, for example, has helped raise the awareness of CI’s value (Lee and Chang,
2007). CI has attracted plenty of attention lately because of the explosion of information
now publicly available through blogs, wikis, text messages, e-mail and other electronic
communications, which form the basis for building meaningful CI. Blogs and other
readily available content reveal public information that many companies would rather
not get out. Additionally, social networks like MySpace and FaceBook and business
networks like LinkedIn are also expanding sources of information, including
employees, current and former executives and others who have valuable insight
regarding a company’s information.
A recent Fortune 500 company survey showed that 55 percent make use of
competitive information in composing business strategy. Each firm is a leader in its
industry and each firm knows its competitors. Although there has been a marked
increase in the number of companies putting in place the mechanisms to collect and
analyze competitive information, many companies still struggle with the process
(Wright and Calof, 2006). There are two main reasons. The first is ignorance – many
companies simply do not know how to gather and analyze external information
properly or effectively. The second reason is somewhat arrogance. Confident in their
belief that they are serving customers better than anyone, companies erroneously
contend that competitor actions do not matter (Kahaner, 1998).
The purpose of this survey research is twofold. First, to study and report the
process that is commonly used to create and maintain a CI program in organizations.
And second, to provide an analysis of several emergent CI tools and techniques, that
are based on text mining, web mining and visualization technologies, which are
specific to collection and analysis of intelligence. The rest of the paper is organized as
follows. In Section 2, the main benefits of having a CI function and how to assess the
value of the intelligence are discussed; Section 3 discusses the process commonly used
in CI. The analyses of text mining, web mining, and visualization-based CI tools for
intelligence collection and intelligence analysis are provided in Sections 4 and 5,
respectively. Practical and management implications are addressed in Section 6,
followed by a discussion in Section 7, and the concluding remarks in Section 8.
2. Benefits and value of CI
The primary output from CI is the ability to makeforward-looking decisions. Therefore,
CI drives strategic decision-making and market leadership. According to the former
Kellogg USA President Gary Costly, “The big payoff for CI is that it will point out
weakness that you have internally because of the strength of your competitors.
Companies that don’tdo this will fail.” There are many empirical evidences that support
this claim (Miller, 2001). Executives at companieswith top-notch CI programs state that
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