Competitive Intelligence Analysis Tools For Economic Developmemt


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An overview competitive intelligence analysis tools and the information that is needed to apply the frameworks.

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Competitive Intelligence Analysis Tools For Economic Developmemt

  1. 1. Competitive Intelligence Analysis Tools For Economic Development June 2009
  2. 2. Introduction •What is competitive intelligence? •Why analyze? •Top 5 analysis tools •Tips to remember 2 © Intelegia, 2009
  3. 3. What is Competitive Intelligence? As defined by Wikipedia (June 2009): Competitive Intelligence is the action of gathering, analyzing, and applying information about products, domain constituents, customers, and competitors for the short term and long term planning needs of an organization. Competitive Intelligence (CI) is both a process and a product. The process of collecting, storing and analyzing information about the competitive arena results in the actionable output of intelligence ascertained by the needs prescribed by an organization. 3 © Intelegia, 2009
  4. 4. Why Analyze? • Clients (or internal users) do not have the time to wade through raw intelligence • Capture insights from public information sources to gain a competitive advantage • Present possible answers to established Key Intelligence Topics (KITs) • Supply a value added aspect to a solid research process 4 © Intelegia, 2009
  5. 5. Top 5 Analysis Tools • SWOT Analysis • Competitor Profile • STEEP Analysis • Porter’s Five Forces • SPACE Matrix Call Isabelle Poirier, Investment Strategist, at +1 (514) 276-1700 Ext. 104 to inquire about your customized seminar solution to learn about these tools plus five more analysis frameworks for economic development. 5 © Intelegia, 2009
  6. 6. Analysis Tool #1: SWOT Analysis Description: An established framework that aids in taking inventory of firm’s overall Strengths and Weaknesses; and industry’s Opportunities and Threats. By identifying each element, decision makers can utilize the resources necessary to overcome the challenges that are present in firm and industry efficiently. Objective: To discover strategic options to reach objectives by assessing a firm’s position within its industry given its internal and external environments. Information Needed: When collecting the raw data for the SWOT analysis, it is important to be free from bias. It is essential that each element is judged fairly by experience personnel or by a group. Once this aspect is settled, the information must originate internally for the strengths and weaknesses. Information can come from industry reports, articles and experts’ insights. With all the gathering information, decision makers can complete the first part of the exercise by answering the following questions located in each quadrant. I) What is the firm doing well? (S) II) What can the firm improve upon? (W) III) What are the opportunities for the firm to grow? (O) IV) What are the threats or changes in the external environments that the firm should avoid? (T) Bombardier Transportation Company Profile on LinkedIn 6 © Intelegia, 2009
  7. 7. Analysis Tool #2: Competitor Profile Description: An overview of competitors’ past and present activities in the industry. The profile entails examining management, products and or services and financial status of competitors. Objective: To provide decision makers with detailed information that can influence plans to overcome competitors’ strengths and exploit weaknesses. Information Needed: The initial step should entail gathering all available information regarding competitors. Dated information should not be discarded however current details are preferred. Once the information is collected, the second task of profiling can begin. The information must be categorized under the following sub- profile groups. Call Isabelle Poirier, Investment I) Information to help senior management prepare for a Strategist, at +1 (514) 276-1700 Ext. meeting with clients, potential partners, etc. (ie, news, 104 to inquire about your customized profiles of decision makers, historical data) seminar solution to learn about this tool II) Information to analyse the opportunity to acquire a company plus more analysis frameworks for (ie, financial data, list of customers, strength and economic development. weaknesses assessment) III) Information to build awareness internally about a competitor (ie, pricing, bidding data, description of service) IV) Information to consider an opportunity for partnership (ie, past and existing partnerships, management style, corporate objectives) 7 © Intelegia, 2009
  8. 8. Analysis Tool #3: STEEP Analysis Information Needed: Description: An analysis framework that examines the macroeconomic Socio-Cultural: environment that a firm competes in based on five factors • Population growth rate and age profile socio-cultural, technological, economic, environmental, political • Population health, education and social mobility, and attitudes to these • Population employment patterns, job market freedom and attitudes Objective: to work • Press attitudes, public opinion, social attitudes and social taboos To prepare firms to deal with external factors that could affect • Lifestyle choices and attitudes to these business initiatives at the present time or the future. When • Socio-Cultural changes there are favorable conditions in the environment, firms can Technological Environment: use their expertise to benefit from the changes to become • Impact of emerging technologies more competitive. • Impact of Internet, reduction in communications costs and increased remote working • Research & Development activity • Impact of technology transfer Economic Current and project economic growth, inflation and interest rates • Unemployment and labor supply • Stage of business cycle • Labor costs • Levels of disposable income and income distribution • Impact of globalization • Likely impact of technological or other change on the economy • Likely changes in the economic environment Environmental • Air and water quality • Sources of energy • Pollution levels • Raw Materials • Level of environmental regulation Political • Government type and stability • Freedom of press, rule of law and levels of bureaucracy and corruption • Regulation and de-regulation trends • Social and employment legislation • Tax policy, and trade and tariff controls • Environmental and consumer-protection legislation • Likely changes in the political environment 8 © Intelegia, 2009
  9. 9. Analysis Tool #4: Porter’s Five Forces Model Description: Existing companies (Rivalry) Created by Harvard Business School professor, Michael a) How many firms are active in the industry? Porter, the five forces analysis framework attempts to assess the level of competition within an industry. The process is b) What are the fixed costs assigned to operating based on examining the influences on a sector on the basis of: in the industry? 1. Existing companies, c) How do products / services differ from other 2. Potential new companies firms in the industry? 3. Substitutes for products offered 4. Suppliers Potential new companies (Barriers To 5. Customers Entry) a) Are patented needed to compete in the By understanding the forces placed on the sector, decision industry? makers may be in the best position to realize the structure and b) What are the costs associated with entering in dynamics of a sector. the industry? Objective: c) Is there a sense of brand loyalty among buyers To provide insights into competitive environments on a national and global scale. Results from the analysis exercise / customers? can be used to make the right strategic decision to become a Substitutes for products offered leader within an industry. a) How easy can a product or service be substituted? Information Needed: b) Can the product or service be offered at Gathering information for this framework is rather cheaper price? straightforward. Details which corresponds to each force should be recent and reflect the present day realties in the c) What is buyers’ willingness to accept industry. The information should answer the following substitutes? questions: Suppliers a) How many suppliers exist for a given product in the industry? b) What are the costs associated in switching suppliers? c) Do suppliers produce specific materials for an unique product? Customers (Bargaining power) a) How many customers exist in the industry? b) What is role of quality when obtaining products or services c) Is it easy for buyers to switch their supplier? 9 © Intelegia, 2009
  10. 10. Analysis Tool #4: Porter’s Five Forces Model Potential Entrants Threats of New Bargaining Entrants Power Suppliers Rivalry Among Competitors Buyers Bargaining Threats of Substitutes Power Substitutes 10 © Intelegia, 2009
  11. 11. Analysis Tool #5: SPACE Matrix Description: The Strategic Position and Action Evaluation (SPACE) matrix Environmental Stability (ES) Technological Change is a valuable method for analyzing the competitive position Rate of Inflation Demand Variability of an organization. It makes use of two internal dimensions Price Range of Competing (financial strength and competitive advantage) and two Products external dimensions (industry strength and environmental Barriers to Entry into The Market stability), to determine the organization’s strategic posture in Competitive pressure and Price the industry. The firm’s strategic posture is then classified Elasticity of Demand broadly as: aggressive, competitive, conservative or defensive. Industry Strength (IS) Growth and Profit Potential Financial Stability Objective: Technological Know-How Resource Utilization The key objective of utilizing the SPACE matrix is to identify Capital Intensity the posture of a firm within an industry in terms of strategic Ease of Entry Into The Market initiatives. Productivity or Capacity Utilization Information Needed: In order to apply the SPACE matrix, researchers are called Competitive Advantage (CA) Market Share upon to collect qualitative and quantitative information in Product Quality Product Life Cycles the form of aspects that can describe environmental stability Product Replacement Cycles (ES), industry strength (IS), competitive advantage (CA) and Customer Loyalty financial strength (FS) Competition’s Capacity Utilization Technological Know How Vertical Integration Financial Strength (FS) Return On Investment Leverage Liquidity Capital Required / Available Ease of Exit From The Market Risk Involved In Business 11 © Intelegia, 2009
  12. 12. Analysis Tool #5: SPACE Matrix FS Co ns e rv a t iv e S t ra t e g y Ag g re s s iv e S t ra t e g y De f e ns iv e S t ra t e g y Co mp e t it iv e S t ra t e g y ES 12 © Intelegia, 2009
  13. 13. Tips To Remember • Always keep in mind the analysis tool(s) that will be applied while searching for relevant and timely information • Take the time to perfect your analysis skills by attending seminars and working on case studies • The more strategic insights presented to management, the more value the competitive intelligence function will have. For more tips, read the Tools For Thought blog at 13 © Intelegia, 2009
  14. 14. About Intelegia Intelegia, a subsidiary of E&B DATA, is a company that strives to assist individuals in understanding the changes in the business environment through internet intelligence. Via training, consulting and publications, Intelegia aims to provide the best approaches and tools to obtain the best information and utilize decision- making frameworks. Call Isabelle Poirier, Investment Strategist, at +1 (514) 276-1700 Ext. 104 to inquire about your customized seminar solution to learn about these tools plus five more analysis frameworks for economic development. 14 © Intelegia, 2009