CI is for Competitive Intelligence

ShirtsCompetitive intelligence, or CI, is based on the premise that at least 90 percent of the information any organization needs to make key decisions and understand its market and competitors is already public or can be systematically developed from public data using proven techniques. CI is thus made up of two elements:

1. Using public sources for data collection management on competition, competitors, and the market environment.
2. Transforming data, through analysis, into usable information, usually on specific competitors.

CI as an element of aggressive competition is not new. For example, the late Sam Walton, founder of Wal-Mart Inc., used many competitive techniques in building Wal-Mart to America’s largest retailer. Among the techniques, he bought clothing at a competitor’s store (and analyzing the stock that same night in a hotel room), and wandering through a store with a mini-tape recorder, making notes on merchandise, prices, etc.

Over time, competition has brought things full circle. Now firms competing against Wal-Mart, and other stores like it, are advised to study the competition by: reviewing annual reports; reading industry evaluations; looking at the way competitors display goods in high-traffic areas and near checkouts; and observing the type of customers shopping there.

While CI’s practical origins date back decades, CI has its intellectual origins with Harvard Professor Michael Porter’s first work on competitive strategy. That, in turn, means that CI was initially tied, in the eyes of many users, with strategic planning. However, through the efforts of a number of pioneers of CI, CI has become something separate and apart.

CI is still typically most often used by those in strategic planning. It most often focuses on the capabilities and intentions of direct competitors, as well as the competitive environment. Its time horizon is usually one year forward and one year back.
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