Why CI is Crucial Now

The pace of business is increasing rapidly.

The pace of our daily business (and personal) lives is increasing dramatically. Think how much more quickly you're expected to respond to queries from suppliers and customers. Remember the days when you could mail someone papers for delivery in a few days and that was good enough? Then remember how overnight delivery services changed that and next day delivery became standard for some projects? Now think about how fax machines and electronic mail have changed the game again. Suddenly, projects that took weeks must be accomplished in days. Think about how your own company expects you to handle more projects with more speed than ever before--and perhaps with fewer resources.

Chances are that you're also making more decisions and making them faster than ever before. The key to keeping pace with businesses' new speed is through the efficient management and usage of competitive intelligence.

Information overload.

The only thing worse than having too little information is having too much information. How many managers can say that they return all phone calls, handle their mail or read an important industry journal in a timely fashion? It's not because these sources of information aren't important--who knows if that one phone call or one article will improve your performance--it's because there's too much of it.

We pride ourselves on how much information we have. Don't we believe that information in itself is power? On the other hand, we all complain about how much information we must wade through to learn what we need to know to conduct our business. If information is power, why should we complain about having too much power?

Competitive intelligence is not just about collecting information. It's about analyzing this information, filtering it, learning what's useful and what's not.

Increased global competition from new competitors.

For the first time in history, we are experiencing a global economy. Companies no longer think in terms of political borders when it comes to running their businesses or selling their products. This trend is growing as world and regional trade agreements such as GATT and the European Union become institutionalized. Countries such as Korea, China, Indonesia and Brazil that were never world economic players in the past are now part of the global economy. Industrialized countries are building facilities all over the world even in other industrialized countries--so it's not just a matter of finding cheap labor as in the past. Japanese and German auto makers now have plants in North America.

Because of better telecommunications, financial firms can be located anywhere and global banking is commonplace. A few years ago you had to carry paper money or travelers checks when you traveled overseas. Now, your hometown money card can get you local currency almost anywhere in the world. Your personal portfolio of mutual funds is not considered well-rounded unless you have "international" funds containing shares of overseas companies.

For your company, it means that competition can come from any country. Competitive intelligence can help identify new and emerging competitors.

Existing competition is becoming more aggressive.

Along with the growing global marketplace comes a maturing market in industrialized countries such as the U.S. This means that companies will grow market share at the expense of their competitors. No one has to remind you that competitors will find and capitalize on any weakness in your organization whether its in production, marketing, advertising or distribution. In any business it's more expensive to acquire new customers than it is to keep current ones. The fight for customers is fierce with many companies willing to sacrifice profits for market share.

Competitive intelligence can help you forecast competitors' actions and allow you to be proactive.

Political changes affect us quickly and forcefully.

Never before in history has political change been so massive or so quick to affect our lives. In a short time frame, an act like the crumbling of the Berlin Wall, a coup in a Caribbean nation or the signing of a peace accord in the Middle East can change the face of business overnight. Suddenly, there are new players and new markets. Think about the end of the Cold War and what it did to the defense industry. What about the highly trained labor force that it left in its wake and the products it left behind? What possibilities does it give us?

Within our own borders, look at the deregulation of businesses such as telecommunications, airlines, and electric utilities. Within a few years, businesses that never existed before are operating. Electric utilities used to be government sanctioned monopolies. No longer. There are positive opportunities for some and losses for others.

Competitive intelligence can keep you informed of political changes that affect your business.

Rapid technological change.

Just the way political change can alter markets, so can technological change. Do you remember when there was no business called "the computer business"? Although it took years to become a real business, change now comes in leaps and bounds, and fast moving technology changes the rules of the game continually. Now, almost daily, something happens in the computer industry--some new technological breakthrough--that can mean new opportunities.

Look at biotechnology. If ever an industry changes fast, this is it. Who knows where the next breakthrough will occur? Who knows when a disease will be cured or a new organic compound manufactured using gene technology? What would happen to certain industry sectors if chemical pesticides could be replaced by non-polluting, gene produced compounds?

Keeping track of technological changes in your own industry and other industries is vital for survival.

Copyright © 2008 Larry Kahaner