Competition Is Killer

Topics: Strategic management, Business intelligence, Intelligence Pages: 27 (9664 words) Published: March 17, 2013
Libri, Vol. 61, pp. 175–189, September 2011 • Copyright © by Walter de Gruyter • Berlin • Boston. DOI 10.1515/libr.2011.015

Competitive is Killer

Ching Seng Yap and Md Zabid Abdul Rashid
Dr. Ching Seng Yap, Assistant Professor, Graduate School of Business, Universiti Tun Abdul Razak, Kuala Lumpur, Malaysia Email: Dr. Md Zabid Abdul Rashid, Professor, and President & Vice Chancellor, Universiti Tun Abdul Razak, Kuala Lumpur, Malaysia Email: Abstract This study examines the level of competitive intelligence practices undertaken by Malaysian publiclisted companies, and the relationship between competitive intelligence and firm performance. Data was collected from 123 companies across various industry categories. The study finds that competitive intelligence has been practiced at an early stage and in a moderate level among Malaysian companies. The top three intelligence sectors rated by the sampled companies are customers, competitors and the economy. Competitive intelligence is mostly used in making strategic decisions regarding capacity expansion, new product development, and strategic alliance. Competitive intelligence practice relates positively to firm performance. Companies with a formal versus informal competitive intelligence unit achieve higher firm performance as measured by organizational growth and profitability. The article includes implications and recommendations for future studies. Introduction The business environment has become more turbulent and competitive because of advancement of information and communication technologies and globalization. Business organizations are pressured and challenged by these phenomena while striving for their business success or even their survival. Competitive Intelligence (CI) emerges as one of the measures for companies to face the competitive environments more effectively. CI is both a process and a product. As a process, CI is the set of legal and ethi-

cal methods for collecting, developing, analyzing and disseminating actionable information pertaining to competitors, suppliers, customers, the organization itself and the business environment (Society of Competitive Intelligence Professionals [SCIP] 2009). As a product, CI is information about the present and future behaviour of competitors, suppliers, customers, technologies, government, acquisitions, market and general business environment (Vedder and Guynes 2001). Cases occur where CI brings positive impacts on firm performance in different areas, for instance, Merck & Co., NutraSweet, Texas Instrument, Shell, Eastman Kodak Company, Motorola, AT&T, Metropolitan Life Insurance Company, Marion Merrell Dow, FMC & Corning (Gilad 1989; Rouach and Santi 2001). CI becomes a key factor to sustained competitive advantage, integration of business strategy and environment, and strategy formulation and implementation. Effective CI practices will lead to successful alignment of competitive strategies with environmental requirements and the achievement of outstanding performance. CI is perceived to be an integral part when assessing competition and devising tactical and strategic plans. CI is commonly used in four primary areas related to strategy in companies: support for strategic decision-making; provide early warning of opportunities and threats; competitor assessment and tracking; and support for strategic planning and implementation (Caudron 1994; Prescott and Smith 1989). Despite the increasing importance of CI in business organizations, there are few systematic attempts to marshal empirical evidence about the relationship between CI practices and firm performance. Literature also reveals that current evidence of the value and impact of CI is anecdotal or consists of indirect assessment (McGonagle and Vella 2002). On the other hand, Daft (2004) considered CI the fastestgrowing area in boundary spanning but has yet to receive much attention among the academia. Moreover,...
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