The Role of Competitive Intelligence on Google - Essay Example

?The Role of Competitive Intelligence on Google Table of Contents Introduction 3 Competitive Intelligence at Google 4 Advantages of Competitive Intelligence 4 Disadvantage or Potential Pitfalls of Competitive Intelligence 6 History of Competitive Intelligence 7 Developments of Competitive Intelligence 8 Impacts of Competitive Intelligence 10 Impact of CI on Google’s Strategy 10 Effect of Advantages and Disadvantages of Competitive Intelligence (CI) on Google 14 Conclusion 17 References 19 Bibliography 24 Introduction Notably, competitive advantage can be identified as the process of selecting, gathering, interpreting and division of public information which is strategically significant to the firm (Boncella, 2003). It is through competitive intelligence (CI) that firms are capable of defining and comprehending their industry and determining the competitors’ strengths as well as weaknesses. It consists of attaining intelligence along with the collection of the data on rivals and explanation of such data for the purpose of managerial decision making. Hence, if it is facilitated properly by the organisation, it can assist the company at shunning surprises by forecasting competitors’ moves and thereby reducing the response time (Small Business Advancement National Center, 2011). It has been found that the authors Rouach & Santi represent their own definitions when considering the competitive intelligence and state that the competitive intelligence has a set of characteristics. CI can be identified as a process of gathering, processing and preserving of the information so that it can be accessed by the people of all the levels in the organisation and therefore help in protecting the firms from any kind of competitive threats (Rouach & Santi, 2001). The main intention of this paper is to develop an understanding of the topic competitive intelligence considering Google as an example. It will try to demonstrate the history of competitive intelligence in Google. The paper also intends to identify the advantages and disadvantages of competitive intelligence, impacts of benefits and drawbacks of competitive intelligence on Google and the likely impact of competitive intelligence on the strategy followed by the organisation. Competitive Intelligence at Google Advantages of Competitive Intelligence The main objective of competitive intelligence is to identify new opportunities and potential threats that lie ahead. It tries to detect and counter the threat from competition. Competitive intelligence aims to remove or reduce the surprises and therefore tries to develop and enhance the competitive advantage. Globalization along with access to the huge databases and the realization of the new type of competitor and business opportunities has also led to the advancement in the competitive intelligence. Therefore, competitive intelligence keeps the companies ahead of their competitors and therefore opens new horizon for them (All Hands Business Solutions, 2009). The figure below explains the competitive intelligence cycle which begins with planning and ends at diffusion of the information at the organisation. Source: (Quoniam, n.d.). When the data is gathered from numerous sources, it is evaluated in order to identify the competitor’s strategies as well as future directions. The main objective of the CI is to make informed marketing as well as strategic decisions through which gaining strategic advantage and reduction of the risk is possible (College of Business and Public Policy, 2011). It is worth mentioning that when a company has detailed information and knowledge regarding the product/ services of its competitors, the company is likely to gain advantage that will assist it in planning the best strategies and therefore enhance the overall profitability and market share (The University of New York, 2011). The main result obtained from the competitive intelligence is its capability to prepare forward-looking decisions. Hence, it can be stated that it is through competitive intelligence that the companies are capable of making strategic decision making as well as that of market leadership. Disadvantage or Potential Pitfalls of Competitive Intelligence As per the views of Malhotra (1996), its main goal is to collect pertinent information which is valid and accurate. Inaccurate information may endanger organisation’s competitive intelligence efforts. The other significant drawbacks of competitive intelligence are that there may be illustrations of fake confirmation where a significant source of data may tend to confirm the records received from other sources. However, in reality there is no such confirmation since one source of data may have received its records from secondary sources. It may as well be the case that both the sources of data must have received their information from a third common source. It might as well happen that the data that has been generated may consist of faults because of information which might either be inaccurate or incomplete and therefore misleads the competitive intelligence efforts of the organisation (Sewlal, n.d.). History of Competitive Intelligence It can be mentioned that it is quite impossible for any one particular paper to describe the history of the competitive intelligence. It seems to have originated from military. The Art of War which has been written by Sun Tzu is the earliest references which were written around 500 B.C. It serves as the basis of developments in military intelligence. The other stream of intelligence action generally takes into consideration the national security as one of the main policy issue. The context of competitive intelligence has passed through three different stages. It is shrugging to describe its next stage of development. The first stage which occurred through the 60s and the 70s was called competitive intelligence gathering. The second stage was referred to as industry and competitor analysis which emerged in the 1980s. The stage of development can be featured as competitive intelligence for strategic decision making. In the near future, competitive intelligence will be developed as a source of competitive advantage and is generally called competitive intelligence as a core capability (Prescott, 1999). Developments of Competitive Intelligence It has been identified that since last 15 years, the business houses have seen the web to be the essential factor to conduct the business operation. The individuals bearing any job title tries to search the Web on a routine basis. It is Google that helps in making the person smarter since he is capable of accessing the information instantly. The professionals of the competitive intelligence make use of Google and numerous other web-based tools in order to identify vital information, answer to critical business questions, and therefore endorse broader sales as well as marketing initiatives. Therefore with the help of competitive intelligence, Google can enhance their sales and overall market share in their industry (Cascade Insights, 2009). Furthermore, it can be stated that there are numerous Google search applications which is generally used by the information users. The five significant tools used for the purpose of competitive intelligence are Google search, Google alert, Google news, Google reader and Google maps. These tools help Google to gain competitive advantage over the competitors. These tools provide Google with greater benefits and it is capable of gaining significant information regarding its rivals such as Yahoo and MSN among others. There are few least significant tools for competitive intelligence as well. They are Google squad, Google news timetable, Google real time and Google moderator. The reason behind the tools to be considered as ‘least significant’ is because of the lack in consciousness of the tool as well as the ability to locate a practical use for the tool. For the researchers of the competitive intelligence, there is a greater significance of Google rather than Google search, News and Reader. Google tends to provide the companies with array of applications that can be utilised for the purpose of collecting information in an efficient and effective manner. It can be stated that with the help of Google Labs, researchers are capable of experimenting with the new tools in order to analyze how best they fit in their individual information gathering and examining processes. One of the online tools named as Google Correlate which belongs to Google, assists the analysts at associating the datasets for the purpose of search queries. This is generally useful for the Competitive Intelligence (CI) (Smith, 2011). There are many open sources as well as free tools which are readily available via internet and are becoming popular in the recent times. Large number of people is aware of the benefits regarding these tools. There is rise in the open source tools that makes information available to numerous professionals. Google also offers various free tools like other internet companies. It has been identified that mostly Google is used by the information users in order to satisfy their professional and personal needs. Google search engine is identified as one of the significant tools to locate information regarding the competitors and therefore is utilised as source of information. It has also been found that the information users try to focus their attention on a few tools. The rate of usage of the Google Tools differs quite significantly between the users of the information. One of the most used tools by the professionals is the Google search engine. The significant task is to identify the Google tool for CI. Google has developed various tools such as Google Search, News, Alert, Maps and Readers are considered to be useful tools and help it to develop strategies over its competitors. Google makes use of these competitive intelligence tools for ad-hoc projects and use them not only for the purpose of searching but also for the purpose of collecting intelligence methodically (Slideshare, 2011). Impacts of Competitive Intelligence It has been noted that competitive intelligence can have unpleasant as well as defensive uses. Although competitive intelligence collection makes use of the private as well as public sources of information, the advantage received is worth the time as well as resources used. The competitive intelligence efforts were separated between special project approach and regular, in progress activities. The duty of the organisations competitive intelligence efforts was mainly with the business executive or planner. CI activity is basically viewed as a significant source of information for locating the opportunities and the threats for business. It can be used for the purpose of preparing, executing and revising the business strategies. With the greater significance of the CI activity, the CI efforts will most probably have greater resources devoted to it. It has been identified that the rate of return received from investment made on CI is not easier to quantify and to justify. This can prove to be one of the significant barriers if there is rise in the demand of CI. It is further expected that with the rise in the demand of the CI activities there will be requirement of growth in the use of the information technology in those activities which will bring demand for the IT function (Vedder & Et. Al., 1999). Impact of CI on Google’s Strategy Analyses of the competitive strengths, weaknesses as well as probable actions are required for the development of the organisational strategies. The effectiveness of the competitive analysis will greatly depend upon the logic and the stubbornness with which the resources of the company’s information are organised. It is through competitive intelligence the basic questions such as, what is the strategy of the competitor, how does that strategy make threats to our current market position can be quantified (Cleland & King, 1975). Most of the times it so happens that two competitors launch almost similar products at the same time. It appears that one company had knowledge regarding the marketing tactics of the other previously. Mere gathering of the information may neither be sufficient to lend a hand to effective marketing strategies nor can it support huge advertisements along with promotions to assist the firms in receiving competitive advantages because there is requirement of in-depth analyses of the information. Companies can possibly gather information with the assistance of their competitive intelligence. With the help of competitive intelligence it becomes possible to collect as much information as possible regarding the competitors. Google can make use of the competitive intelligence in order to obtain useful information against the competition it faces in the global market. It is through proper understanding the competitors; Google will come to know the method of positioning the brand. Depending upon how the product of the competition was obtained from the market, it becomes easier to gauge the viability. If Google identifies that the response of the market is quite adverse to the competition, it can attain the benefit of that information and therefore design its marketing strategies in an effective manner. It is quite significant for the companies to have proper information regarding their competitors (Helium Inc, 2011). There is greater significance of competitive intelligence in order to effectively execute the changes in relatively smaller organisation (Guimaraes, 2000). It can be mentioned that the internet as one of the inter-organisational communications tool as well as information-rich resource has altered the way the firms collect, produce and transfer competitive intelligence. However, there is quite a few empirical works describing the impact of internet on competitive intelligence and its impact on the organisation. It has been noticed that the external usage of the internet is related to quality of competitive intelligence information (Teo & Choo, 2000). The weaknesses of the competitors are analyzed by the marketers and therefore it tries to emphasize upon the organisational strengths. With this concern, the companies try to leverage upon the information that has been gathered. Information may be collected by the organisation by means of word-of-mouth or via means of chance encounters. They may as well be collected through news and internet report (Helium Inc, 2011). This process can be handled through numerous processes by creative marketers such as Google. One of the significant features of the competitive intelligence is to have proper information regarding what information can be considered as vital and identification of the right people in order to avail information regarding the competitor. Depending upon the information that has been collected, Google can prepare its strategies accordingly and gain competitive advantages over other firms. However, it is significant for Google to remember the fact that the data gathered needs to be checked for dependability and honesty (Helium Inc, 2011). It will be disadvantageous for the firms, if Google is incapable of making use of the competitive intelligence and therefore does not make use of the information that has been gathered. Google is well aware of the significance of competitive intelligence as one of the forces that can lead to success. Without identifying its significance, most of the companies tend to prepare strategies that lead them to failure. By employing competitive intelligence, Google will be capable of positioning its products in the particular segment and therefore capturing important market share (Helium Inc, 2011). Effect of Advantages and Disadvantages of Competitive Intelligence (CI) on Google CI is collection of concepts, procedures as well as models used for the purpose of enhancing the business decisions. It makes use of the information from numerous sources and thus makes use of experiences in order to make an understanding of business dynamic (Li & Et. Al., 2008). In the modern day context the main purpose of the competitive intelligence is to acquire competitive advantages by means of proper investigation and evaluation of market and competitive information (Michaeli, 2011). Competitive intelligence can be described as the process of collecting and evaluating the information that has been collected regarding the competitors so that the marketers are capable of obtaining edge over the marketplace (Blenkhorn, 2005). Competitive intelligence is generally viewed as an activity which consists of environmental scanning and literatures of strategic management. It has been observed that numerous new studies as well as activities are becoming significant parts of the competitive intelligence framework. It is quite important for the competitive intelligence practitioners to comprehend the fact that they may not afford to depend upon what they learned two decades ago in order to gain competitive advantage. Therefore, Google needs to consider all the business functions, particularly the marketing as well as planning in a proper manner in order to gain control over the competitors and to sustain in the long run (Calof & Wright, 2008). There might be significant impact of the disadvantages of competitive intelligence to Google as well. It can be mentioned that competitive intelligence has different level of impact on the profitability of the company. Therefore, if Google overlooks any single or two of these effects, the organisation is likely to receive lesser gains from competitive intelligence. Competitive intelligence may cause additional cost to Google and with the pace of time new technology may be made available which will outdate the existing ones. This will lead to weaken the competitive strength of Google in its long-run performance. It is quite significant for Google to have technology resource evaluation in order to review the effectiveness of the organization’s infrastructure. Although the use of the competitive intelligence helps the firm to achieve long term business success, the competitive intelligence that tends to be solely based upon the incorrect data may lead Google to develop faulty business strategies (Weihrich, 1999). It has also been identified that the conventional competitive intelligence are becoming too complex and quite time consuming because increasing number of companies are trying to provide widely diversified products and services to their potential customers. If Google evaluates its performance based upon how it is performing against its competitors then it will reduce the profitability of Google and retard the market share of the company since this will not help Google to generate their own unique strategies but will force them to employ the strategies already used by their competitors. Therefore, it is quite significant for Google to remember that each company is unique in terms of performances and the strategies applied that may not always be applicable to them in particular instances (Weihrich, 1999). It has been identified that Google has announced 10 algorithm changes in its search engines. The main reason behind such transformation is that it wants to be more transparent. It has revealed that the search contents will be highly authenticated. By making its strategy transparent the company wants to monitor its strategic move that its competitors take. This is the impact of competitive intelligence (Boulton, 2011). It is competitive intelligence that will assist Google to develop competitive surprises against its competitors. It will assist them in developing portfolio of competitive advantage in comparison to competitors’ sustainable advantages. Google will be capable of leveraging its resources by making use of its partners. Competitive intelligence will assist Google to protect themselves against competitors who are in the process of development of new advantages, changing rules of engagement as well as attracting the partners (Havenga & Botha, n.d.). Conclusion Competitive intelligence tends to evaluate and forecast the competitive developments that have an impact upon the performance of the organisation. The main objective of the competitive intelligence has been to enhance the profitability of the company. The company that better comprehends the competitive intelligence enhances their performance by making use of the information as an untimely warning system. The moves of the competitors, customers, suppliers, industries as well as other players such as technology diffusers, government agencies can be gauged with the help of the competitive intelligence. The competitive intelligence practitioner is also called as ‘industry risk analysts’. It can be observed that accumulating the intelligence tends to collect information from the competitive environment. It is then the task of the analysts to understand the developments for their potential impact on the firm (Google, 2009). The main mission of the competitive intelligence is to alert the management at numerous levels regarding the upcoming transformation in the markets with possibilities for risks or opportunities. It is a well known fact that competitive intelligence has significant impacts upon the profitability of the company. The company that tends to overlook these effects may not gain benefits from competitive intelligence. Most of the companies make use of the competitive intelligence as the process of monitoring the activities of the competitors. Although it is significant to have proper knowledge on the move of the competitors, it is believed that efficient competitive intelligence shift from the information reporting mode to analytical intelligence mode (Google, 2009). It has been observed that competitive intelligence has an impact on the efficient operation of Google. It assists them at maintaining competitive advantage by preparing strategies that can have significant impacts on the success of the organisation. References All Hands Business Solutions, 2009. What Competitive Intelligence Can Do For You. Predictive Analysis. [Online] Available at: http://www.allhandsmgt.com/competitive-intelligence-what-it-can-do.htm [Accessed November 8, 2011]. Boncella, R. J., 2003. “Competitive Intelligence and the Web”, Communications of the Association for Information Systems. Vol: 12, Pp: 327-340. Blenkhorn, D. L., 2005. Competitive Intelligence and Global Business. Greenwood Publishing Group. Boulton, C., 2011. 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