In the 1960s and 1970s, firms across the world faced little foreign competition from each other and corporate strategy simply consisted of focusing on new product development to meet the increasing demand from expanding middle classes. In recent times, world growth has slowed, ease of trade has increased due to pro globalisation factors such as improved technologies, transportation methods and super- efficient communications. As a result many firms have quickly realised that the only way to grow is capture market share from other competitors in both their local markets and in foreign markets (Rouach and Santi 2001).
Resulting pressures from competitors, ever changing customer needs and uncertainty in macroeconomic environments continually confront businesses forcing them to evaluate and change their strategic goals (Groom 2001). This evaluation of strategy requires on-going assessment of internal strengths, weaknesses, external opportunities and threats and firms of all types normally possess some method for gathering the information on competitors and the external business environment even if it is an informal process (Groom 2001). By definition, competitive intelligence is the systematic process of collecting, analysing and storing information from both published literature and human sources and this information will to be made available to people at all levels within the firm to assist decision making concerning competitor’s strategies, emerging industry trends and potential threats (Sawka 1996). Competitive intelligence must be conducted legally and respect codes of ethics as that it involves the transfer of knowledge from the environment to the organisation in a manner that falls within the parameters of established rules (Rouach and Santi 2001). Many organisations in particular small to medium sized enterprises lack a formal process for gathering, fine-tuning and converting competitive information into knowledge and intelligence that is useful for strategy formulation. Strategy defines firm specific issues such as the choice of product or service the firm will offer and how the firm should compete and position itself against the competitors in the market (Rouach and Santi 2001).
Strategy is thus responsible for deciding the markets in which a firm will compete and the manner in which they will focus resources and convert distin ctive competencies into competitive advantage. The principal activities of strategy formulation include identifying opportunities and threats in the company’s environment and attaching some estimate of risk to the noticeable alternatives. Before a choice can be made however, the company’s strengths and weaknesses should be appraised together with the resources available and thereafter the company’s potential to take advantage of perceived market needs or to cope with associated risks should be estimated as objectively as possible (Andrews 2003). Bringing value to information and being able to transmit it as an input in this on-going strategy formulation process is one major purpose of intelligence initiatives, this paper will supports the view that ‘’strategy without intelligence isn’t strategy, it is guessing’’ and it shall bring forward further evidence in support of this view.
The History of Competitive Intelligence
Strategy, guides a firm’s decision making about how to achieve and sustain competitive advantage. Bernhardt (2003) states that gaining competitive advantage without a clear understanding of what your competitors are doing in the...