How Competitive Intelligence Strengthens Security Management
Despite its relatively short history in the modern sense, the importance of competitive intelligence for successful business operations is now widely recognized by most entrepreneurs in developed countries. According to statistics, 82% of large enterprises and more than 90% of global companies in the Forbes 500 regularly use competitive intelligence to support decision-making and risk management.
In today’s world, the competitive intelligence function has become more formalized. Most foreign companies in developed markets have official centralized competitive intelligence units and dedicated managers. At present, this activity often goes beyond simple competitor profiling and evaluation. The most actively practiced areas include technology assessment, as well as economic and political analysis. At the same time, in some companies competitive intelligence is still viewed mainly as a data-gathering activity, which is an inaccurate and one-sided understanding of the process.
At the same time, in Ukraine, unlike in developed countries, most companies still do not use competitive intelligence at all, or use it in an unprofessional way. Many Ukrainian business owners have not yet recognized the need for such activities. A significant share of domestic entrepreneurs are either unfamiliar with the concept of “competitive intelligence” or believe that it is unnecessary. Only a few businesses have in-house competitive intelligence units or use external competitive intelligence services. Today, 80% of local companies use competitive intelligence tools only after serious problems have already emerged, and many others conduct this work on their own, which often means it is not done professionally enough.
Most Ukrainian companies do not apply competitive intelligence for preventive purposes. The main reasons for this situation are outdated management principles and technologies; a lack of understanding of the essence, methods, and value of competitive intelligence as a tool for information and analytical support of business security and, ultimately, effective business management; an inadequate assessment of their own capabilities; negative experiences caused by involving unqualified or dishonest providers in this activity; low awareness of the effectiveness of competitive intelligence; lack of time to build an effective system and develop relevant information sources; and a shortage of highly qualified specialists and expertise. In addition, most managers of Ukrainian companies are more often interested in obtaining closed-type information about competitors, customers, and suppliers, and therefore often act outside the legal framework, resorting to unlawful methods of information gathering.
In general, competitive intelligence is understood as a system for collecting, storing, processing, and presenting information for the purpose of supporting managerial decision-making and increasing company competitiveness, using only open sources.
Competitive intelligence covers a wide range of operations involving the collection and analysis of information needed for strategic assessments of the actual state and prospects of the external business environment, as well as the real and potential activity of competing companies in the market.
As a rule, competitive intelligence is viewed as a systematic process that includes the collection, structuring, analysis, and evaluation of information about the company’s internal environment and external surroundings; and the communication of relevant findings to senior management so they can make effective and high-quality strategic and important tactical business decisions. This allows them to anticipate market changes and make appropriate risk management decisions where prevention or avoidance is not possible, introduce timely changes within the company, and do so while taking into account potential customer needs and increasing the value of the business itself.
To outperform a competitor in terms of organizational structure, business processes, efficiency, and productivity, you first need to know these indicators, as well as the forms and methods of their practical implementation. Companies that can understand their environment and competitors, and develop competitive management strategies, will succeed in today’s rapidly globalizing information society.
The main objects of competitive intelligence are competitors’ production and investment plans, price structures and production costs, and technological know-how that makes it possible to assess the economic potential of the company being studied.
Intelligence information usually reveals the true intentions of both potential and actual partners toward the business entity and provides information about the strengths and weaknesses of competitors, among other things.
The main goal of competitive intelligence is to provide management in a timely manner with reliable and complete information about the competitive landscape around the company. The essence of competitive intelligence lies in the ability to anticipate a competitor’s policy and stay one step ahead by taking preventive measures.
The key benefits of using competitive intelligence in business are:
conducting competitive analysis and forecasting market changes that may affect business performance, including identifying new and potential competitors and analyzing their strengths and weaknesses;
developing appropriate and timely responses to market changes, anticipating threats and finding ways to avoid or neutralize them, and building a counterstrategy;
alerting management to the possible emergence of crisis situations.
Over many years of globalization, massive volumes of publicly available data, and technological progress, the practical aspects of competitive intelligence have changed significantly. The so-called concept of “integrated intelligence” has emerged, broadening the range of skills required from competitive intelligence professionals. Initially, competitive intelligence focused directly on studying competitors. Later, new competencies were integrated into the concept to assess the current economic and political situation within specific regulatory environments. Today, competitive and market intelligence require an understanding of marketing specifics, market segmentation, the formation of a competitive environment, competitor assessment, and economic and political analysis. The emphasis in competitive intelligence is on analytics, deep understanding, and more effective translation of findings to decision-makers.
A well-developed market for competitive intelligence has emerged worldwide. In recent years, a significant number of consulting firms specializing in services that fall under competitive intelligence have appeared in leading countries. Similar units are also being created within large and small companies. In Europe and the United States, in particular, many large companies conduct regular collection and analysis of business information about competitors and the market.
In today’s turbulent environment, competitive intelligence is becoming the foundation of security management. While most companies act reactively, the consulting company Sidcon offers a transition to a preventive management model. Drawing on many years of experience, the company’s experts help implement a systematic security management approach in which every step is supported by deep analytics. This gives Ukrainian companies the foundation they need to make well-informed decisions and ensure stable development in line with international standards.