Competitive Intelligence: Gathering, Analysing and Putting It to Work

Citation

Hannabuss, S. (2006), "Competitive Intelligence: Gathering, Analysing and Putting It to Work", Library Review, Vol. 55 No. 7, pp. 455-457. https://doi.org/10.1108/00242530610682209

For anyone in the knowledge and information management profession wanting to get a clear overview of competitive intelligence (CI), Christopher Murphy is a reliable guide. Gower already has a well‐established reputation for information‐related publications and has also built up a list on competitiveness in business. Competitive or competitor intelligence involves observing others players in the same market as you and finding ways of knowing more about them, their behaviour, products and services, supply chain and R&D, and their intentions. It builds also on the familiar model of information which, when brought coherently together for decision‐making, is transformed into knowledge (the knowledge of knowledge management). In this context, it takes on the connotations of military intelligence to the extent that business is a kind of war for profits and market share, reputation and competitive advantage, and knowing more about your competitor puts you in a good position to win.

Throughout the book, there is a strong and clear strand about identifying and gathering, analysing and evaluating and disseminating such information, knowledge or intelligence. This brings it within the remit of the knowledge and information professional. The central section (the second of three) focuses on collecting information about business – not merely companies, products and services, but sector‐ and company‐specific information, material produced by companies themselves (from prospectuses to filing patents), and more elusive qualitative and tacit information, like that hidden away in the heads of employees and managers and which a researcher, in‐house or on contract, might wish to elicit through interview. Murphy is a director of the business consultancy Ravensbourne Research Limited and is well‐known as a trainer and writer in the corporate knowledge and CI field. He rightly discusses how such research can and should be refined so that hypotheses can drive (or be induced from) it, and how the “craft of analysis” involves reading the quantitative and qualitative evidence and then reading between and beyond the lines, an interpretive skill in fact.

CI is a cross‐disciplinary and holistic process – cross‐disciplinary because it draws on (and has to show an understanding of) factors like the economic behaviour of markets, corporate strategy, change management, technological developments, regulatory contexts, organisational culture, and holistic because any one perspective [say, merely financial analysis or the use of a technique like forecasting or strengths, weaknesses, opportunities and threats (SWOT) or psychometrics] will not be enough to understand the firm and its context. The information or knowledge professional, as a result, needs to be ready for these challenges if he or she does not already work in a team with this knowledge and expertise. In fact, a substantial part of CI is financial, as is shown in several chapters taking the reader through financial statements and their interpretation, explaining the importance of interpreting the accounts (using ratio analysis, understanding return on investment, appreciating the tangible and intangible assets of the company) and analysing what the chairman and financial director say in the company accounts. The financial dimension is a critical part of the “narrative” about the company, even though interpretation takes specialist skill and the information may be reliable or not.

The other major aspect of the book is its business background, taking the reader through well‐documented territory like Porter's five forces and value chain, picking up on critical success factors, showing how rivals can compete over price and differentiation and customer focus, and the wider micro‐ and macroeconomic dynamics of the market. Section one deals with this, while Section 3 deals with the finance and leads on to comparing and positioning companies. This takes us neatly back to the overarching framework of the book – that information is not enough and intelligence is needed, it is costly to gather and analyse but may be even more costly to ignore, it is essential for the firm (in its daily operations as well as for R&D) to have information about competitors so that it can plan and forecast and that intelligence gatherers and analysts should know about disclosure and confidentiality, as well as be very familiar with the industries and markets themselves.

CI is not a job for beginners although Murphy's book about CI will be accessible to students and teachers in the business and information area, and to managers and economists and accountants keen to take on board the CI perspective. The IT and networking, data mining and record management angles are for other works (one recommended on the last is the recent Managing Electronic Records edited by Julie McLeod and Catherine Hare from Facet, 2005), and the legal and ethical issues merit further research elsewhere, too (confidentiality and the knowledge worker are larger themes than Murphy implies). Critics could carp and say that the book is a hybrid and content on finance and business could (and will) be found in an already extensive literature (and they would be right). The real contribution of the book, however, lies in its ability to bring the various themes together in an attractively readable way – a must for the business information researcher, a nice‐to‐have for the busy manager and a topical and well‐produced book for professional and academic business collections where people want a quick way to join up the dots.