The Role of Competitive Intelligence in an Organization - Article Example

Competitive Intelligence: Samsung Introduction This paper gives a critical analysis and discussion of the role of competitive intelligence within an organization with a special focus on Samsung Group. The paper begins with a comprehensive definition of competitive intelligence and further describes its role in improved productivity and competitiveness in the market through effective implementation of both tactical and strategic intelligence in making decisions for effective business strategies. Definition of Competitive Intelligence Competitive intelligence is a term that is used to refer to the processes which companies employ to gather data and apply data and information about various aspects of the market with an aim of achieving a higher performance as compared to business rivals (Bartes 664). The intelligence that is gathered and applied for business advantage includes information on consumers, business competitors, products and services. During market research that is conducted within the framework of competitive intelligence, a company invests resources in collection, analysis, application and communication of information on all aspects of the market. Therefore competitive intelligence is an aspect of the external environment of an organization or company. Advantages of Competitive Intelligence The role of competitive advantage within a business entity is demonstrated by the application of collected and analyzed data on the market by the management as a basis of making operational and strategic decisions for business success (Gaidelys 1060). Competitive intelligence is an ethically and legally acceptable business practice which allows companies to make informed decisions that allow them to effectively survive in a competitive market. Uncertainty on the market is significantly reduced through competitive intelligence (Kamal 312). In addition, competitive intelligence allows companies to save a lot of money and time by applying only the most effective business strategies for achieving a competitive advantage in the market. More importantly, it is through competitive intelligence that new opportunities within the market are discovered by a company. This allows companies to eliminate the business threats which are inevitable occurrences within a competitive business environment. Competitive Intelligence at Samsung Through competitive intelligence, Samsung analyses its plans in relation to the response of consumers or the market to allow its management to reach informed and accurate decisions on business strategy (Datamonitor 5). For example in the production of smart phones, android phones, notebook and tablets, Samsung collects intelligence from the market on the likely response of the consumers before the sale of these products. This concept is referred to as pressure test of corporate plans to determine the reaction of the market to new or improved products. It is through this process that Samsung has been able to obtain a positive response from the consumers a factor that has allowed the company to become more competitive as compared to its business rivals. The android products that are produced by Samsung are received well by the company’s markets across the world because of the quality, values and authenticity which the company achieves for its products based on the intelligence information that is gathered and analyzed within competitive intelligence. The need to improve credit rating within Samsung called for elaborate analysis of intelligence about its consumers and business competitors. This allowed the company management to decide upon effective corporate strategies which allowed the company to have a higher credit rating as compared to other companies within the industry (Karim 196). In this regard therefore, competitive intelligence has played a significant role in defining the business strength within Samsung and its application to achieve success in the mobile phone and electronic markets. The strength of Samsung’s telecommunication commerce is also attributed to elaborate and comprehensive analysis and use of intelligence on the market within competitive intelligence framework and processes. Overcoming Business Competitors Samsung has employed competitive intelligence processes to make market decisions which have enabled it to achieve a competitive advantage over its business rivals such as LG, Motorola, Apple and Nokia. Being one of the biggest companies within South Korea, Samsung is internationalized with several subsidiaries across the world (Won-Hee 88). This reflects that the company is faced with a challenge of maintaining its competitive advantage and business leadership in the various markets and economies within it operates its business activities. The high revenues that the company generates annually are attributed to the right or informed decisions on corporate strategy that are made by the management team based on the competitive intelligence that it acquires on its markets (Gaidelys 1059). Samsung operates within the electronics industry, telecommunication and mobile phone industry and finance. In addition the company has shown interest in over 20 business affiliates across the world. All these illustrations reflect the information needs within the company which would only emanate from effective competitive intelligence. Competitive intelligence allows companies to find out and determine the business strategies and activities which are being implemented by business rivals so that they become a basis for decision making (Kamal 310). Intelligence information on rival companies such as LG is obtained through competitive intelligence. This includes data and information about the production of new and innovative products by business rivals so that counteractive business strategies are employed for competitiveness. In addition, competitive intelligence allows a company to determine the management approach and marketing strategies used by the business rivals which is used to design better strategies for a competitive advantage (Giustozzi 8). SWOT Analysis The opportunities within various markets are effectively identified and utilized through the processes of competitive intelligence (Calof and Sheila 717). Samsung has employed the intelligence that is gathered and analyzed about its markets to identify the opportunities which it has to invest in its supply and value chain. This is attributed to the efficiency that the company has demonstrated within its supply chain which is a factor of the adoption and implementation of information systems within this supply chain (Gaidelys 1057). More significantly, Samsung has deployed intelligence gathered in its market research processes to identify opportunities for international expansion or growth to foreign markets. This is the reason why the company has achieved success as a leading multinational company within the electronic and telecommunication industries (Dollatabady and Rasool 175). Competitive intelligence has allowed Samsung to identify opportunities for achieving a positive and desirable outlook for its semiconductors so that it would be more appealing to the market as compared to LG or Motorola. The strategies which the company has used to increase the sale of its mobile phone products are also attributed to its investment on the processes of competitive intelligence. A specific example of a market opportunity that Samsung utilized to achieve competitive advantage through competitive intelligence is the identification of the growth of demand for mobile phones within the Indian market. This allowed the company to expand its businesses in India and as a result become more competitive. Competitive intelligence allows a company to identify or realize its business strengths in the market which it uses overcome the challenges that it faces in business operations and performance (Bartes 668). Within Samsung, the management team has realized that the company has a very robust and top line for business growth through the data and information which is gathered and analyzed within the processes of competitive intelligence. In addition, Samsung has been able to realize and utilize its strong market position to expand into more markets and as a result improve its share within the markets of its operations (Won-Hee 100). The diversification of products and services within Samsung is a product of effective utilization of intelligence information and data on its markets. This has allowed the company to reach more markets and consumers as compared to its business competitors such as Nokia and LG (Dollatabady and Rasool 180). Competitive intelligence is described as a way through which companies understand their weaknesses and the implications that they are likely to have on their performance and competitiveness within the market (Calof and Sheila 720). For example Samsung identified a decline in the business of its memory chips and the causes of the decline through an effective competitive intelligence processes (Dollatabady and Rasool 174). The fluctuations within the demand of a company’s products and services are also identified through competitive intelligence. For example the demand for Samsung’s telecommunication services has declined significantly over time. This was attributed to the competitiveness of the industry and the changes in the preferences and tastes of consumers. The information which led to these conclusions was gathered and analyzed within the competitive intelligence processes (Wolf 7). Competitive intelligence on markets and securities allows Samsung to identify the causes of occasional poor profitability of its securities so that adequate measures are employed to improve its performance in the securities exchange (Datamonitor 7). Within the processes of competitive intelligence, Samsung does market research to obtain adequate data on the market which it uses to do a comparative analysis of its business activities and strategies versus those of its business rivals. This practice as applied within Samsung is often referred to as competitive benchmarking (Dollatabady and Rasool 174). More specifically competitive intelligence within Samsung has been used to identify and decide upon the business risks and threats which exist within its market. For example, competitive intelligence allows Samsung to predict possible changes in the legal and political environments within its foreign business operations. This is used to make informed decisions which would safeguard the company from losses and failures in business as a result of a changing external environment of the market. Competitive intelligence is employed by companies as a way of monitoring the regulatory frameworks within its market so that negative consequences are not felt within business operations (Kamal 309). In addition, competitive intelligence is an approach used by companies to identify the risks associates with infringement of its intellectual property rights so that measures are implemented to prevent these infringements (Giustozzi 4). It is through competitive intelligence that Samsung is able to protect its mobile and electronic products from infringement of intellectual property rights (Won-Hee 97). Regardless of the above reflections on the role of competitive intelligence on the success of a company, it is necessary to note that the data and information that is gathered during this process is effective depending on various factors that are internal and external to the business. For example, the level of rivalry within the market determines the application of intelligence information on the market to gain competitive advantage (Gaidelys 1060). In addition, the corporate culture within Samsung defines the applicability of intelligence information and data on the market to make decisions that affect business activities and procedures. Moreover, the biases which exist among decision makers of a company and the leadership trait defines the decisions which are made on the basis of data and information which is gathered and analyzed during the process of competitive intelligence. More importantly, the reporting structure within the architecture of a company defines the applicability of data and information from competitive intelligence process in making changes within the business strategies and procedures for improved performance (Karim 198). There are two major forms of competitive intelligence which are employed by companies to enhance or promote their performance and competitiveness within the market. Both strategic intelligence and tactical intelligence are employed by Samsung in making decisions on long term and operational processes respectively (Won-Hee 101). Strategic intelligence within Samsung allows the company to have a long term plan and strategy for its business success and competitiveness. For example the company acquired strategic intelligence on future trends in technology to invest on invention and innovation of its products so that the needs of the market in the future years are catered for (Giustozzi 10). Furthermore strategic intelligence allows a company to focus on future growth through approaches such as mergers and acquisitions, affiliation with other companies and licensing businesses within foreign markets (Karim 196). The strategic intelligence framework within Samsung allows it to identify the strategic risks and opportunities within its current and new markets. This allows the executive management to make informed decisions on the way of business into the future (Dollatabady and Rasool 177). The need to diversify the product portfolio of a company within its strategic plans is identified and determined from the strategic intelligence which is gathered during the processes of competitive intelligence (Calof and Sheila 723). It is therefore notable that strategic intelligence plays a role of enabling the management team within Samsung to make decisions on business strategies that will allow the company to effectively achieve its vision. This is achieved by focusing on where the company envisions being in a specified period in the future. Porter’s 5 Forces Tactical intelligence plays a major role in the success of a company. This is attributed to the fact that the contemporary business environment is characterized by dynamism and constant change within the market such as technological advancements, changes in consumer preferences and needs, new entrants into the market, fluctuations in prices and demand, legal and political changes and economic crises (Qiu 814). Samsung employs tactical intelligence to identify new entrants into the market and lay strategies for overcoming them. Companies also employ tactical intelligence to identify substitute products that enter the market and as a result device ways through which a competitive advantage can be achieved over these substitutes. Within the telecommunication and mobile industry as well as the electronic business environment within which Samsung operates, there are there are a variety of products which act as substitutes for satisfying the needs of consumers. This illustrates the important role of competitive intelligence Samsung for its need to become a market leader in the sale of its products. Tactical intelligence which is an adjunct of competitive intelligence plays an important role in providing managers of a company with sufficient and accurate data on the bargaining power of consumers (Karim 196). It is upon this data and information that managers make short term decisions and make necessary amendments on policies and practices for improved performance within the market (Kamal 312). The decisions that are made within Samsung on ways of improving sales and the resultant revenue are based on tactical intelligence. In addition, the strategies that the company employs in improving its share of the telecommunication and mobile phone market are reached on the basis of the tactical intelligence on the power of suppliers of the company’s raw materials. Tactical intelligence is argued to be the most effective approach through which a company supports its business functions so that productivity is improved through constant supply of raw materials for production. Ethical Considerations Healthy competition is an ethical consideration in the application of competitive intelligence which all companies must adhere to (Gaidelys 1057). For example competitive intelligence should be used to achieve effective pricing of products and services. Through tactical intelligence a company is able to investigate the various variables within the market such as price, product, place and promotion (Giustozzi 12). This investigation plays an important role in comparing the performance of the company as compared with its business competitors within the framework of the market mix variables. Samsung employs tactical intelligence to compare its adherence to corporate social responsibility as compared to its major competitors such as LG, Nokia, Apple and Motorola. This allows the management of the company to make decisions which are aimed at to promote its image within the market (Datamonitor 8). In addition, the most effective human resource management strategies are employed by Samsung as a result of analysis and application of tactical intelligence. More importantly, competitive intelligence allows Samsung to provide its consumers with innovative products that are designed to meet their needs for safety. Conclusion In the light of the above discussions and illustrations upon Samsung, it is conclusive that competitive intelligence has a significant role to play in the success, performance and competitiveness of a company within its local and international market. Competitive intelligence allows an analysis of external market factors such as products, prices, consumers, competitors, technological change, promotion and market environment to allow managers to make informed strategic and tactical decisions for success. Works Cited Bartes, Frantisek. "Action Plan - Basis of Competitive Intelligence Activities." Economics & Management 16. (2011): 664-669 Calof, Jonathan L., and Sheila Wright. "Competitive Intelligence." European Journal of Marketing 42.7 (2008): 717-730. Datamonitor. Samsung Group. Samsung Group SWOT Analysis (2010): 1-9 Dollatabady, Rezaie, and Rasool, Amirusefi. "Evaluation Of Brand Equity Based Aaker Model (Case Study LG & Samsung)." Interdisciplinary Journal of Contemporary Research in Business 3.6 (2011): 174-180. Gaidelys, Vaidas. "The Role of Competitive Intelligence In The Course Of Business Process." Economics & Management (2010): 1057-1064. Giustozzi, Emilie Steele, and Betsy Van Der Veer Martens. "The New Competitive Intelligence Agents: "Programming" Competitive Intelligence Ethics into Corporate Cultures." Webology 8.2 (2011): 1-12. Kamal, Nayan Agarwal. "Competitive Intelligence in Business Decisions - an Overview." Competition Forum 4.2 (2009 Qiu): 309-314. Karim, Akram Jalal. "The Value of Competitive Business Intelligence System (CBIS) To Stimulate Competitiveness in Global Market." International Journal of Business & Social Science 2.19 (2011): 196-203. Qiu, Tianjiao. "Scanning for Competitive Intelligence: A Managerial Perspective." European Journal of Marketing 42.7 (2008): 814-35 Wolf, Alan. "Samsung Unveils New Products, Brand Strategy. (Cover Story)." 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