Summary: If you want an answer to this question as to does competitive intelligence help improve bottomline in one word, it is YES. It pays off big time when you keep an eye on your competitors’ activities. How do I know this? Well, Tej Adidam at University of Nebraska at Omaha, Madhumita Banerjee – University of Warwick and I recently published a paper titled “Competitive intelligence and firm’s performance in emerging markets: an exploratory study in India” in the Journal of Business and Industrial Marketing. Competitive Intelligence It seems long time ago; Tej asked an interesting question in one of our interesting exchanges about is Competitive Intelligence (CI) really helpful? Looking through the literature, we saw lots of anecdotal evidence and it seemed that most of the CI papers discussed the questions such as how is CI conducted in various parts of the world? What are the players involved in CI activities? What type of firms conduct CI activities? There were several other such questions asked and answered including the usage and dissemination of CI within firms. Let me first be clear about Competitive Intelligence. The word CI does not mean corporate espionage and such negative things. It means, a system of environmental scanning that integrates the knowledge of all organizational members and encompasses marketing, structural, strategic and other organizational elements. The concept of CI has strong underpinnings in military science and has a rich history dating back more than 5,000 years. In recent history, especially in the field of management, the concept has been studied for considerable time under different titles. For example, it has been called “environmental scanning”, which focused on how executives “scan” their organizations’ environment. Similarly, over time, other labels have been used in prior studies to describe competitive intelligence as “business intelligence”, “competitor analysis” and “market intelligence”. CI is used in tracking the activity of direct and indirect competitors including their general business activities, tactics and strategies relating to various important issues such as market penetration, product development, patent registrations and so on. Thus, if we were to compare environmental scanning and CI, we can conclude that the former is a method of gathering information. CI takes this information, and converts it into knowledge of one’s competitors or a group of competitors which is used by various departments within an organization to make strategic decisions. In other words, environmental scanning is considered as the first step in CI. As we all (i.e. Tej, Madhumita and me) had first-hand experience of working in the corporate environment of India, we decided to use India as a context for our study. Interestingly enough, there were no earlier studies we could find which focused on CI practices in India. So, it was like treading uncharted waters, and it was quite exciting too and it turned out to be fruitful in the end. We tried to answer the following questions: Do Competitive Intelligence (CI) activities have an impact on the market performance of Indian firms? If so, what are the macro and micro environmental drivers of CI for Indian firms? How are CI activities organized within Indian firms? How is the usage and dissemination of CI taking place within Indian firms? We used a stratified sample developed from a variety of mailing lists focusing on Indian firms. Confederation of Indian Industry (CII) was also quite helpful for this study. You can read more about the methodology in the paper. As this post is getting too long, I will only tackle Question 1 we asked above in this part and will tackle the other 3 parts in the next post. Do Competitive Intelligence activities have an impact on the market performance of Indian firms? [adsense] As I stated earlier, historically, analysts and researchers agree that better CI will improve firm’s [...]
