[2] It is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers in strategic decision making for an organization.
This definition focuses attention on the difference between the dissemination of widely available factual information (such as market statistics, financial reports, newspaper clippings) performed by functions such as libraries and information centers, and competitive intelligence which is a perspective on developments and events aimed at yielding a competitive edge.
[11] In 1980, Michael Porter published the study Competitive-Strategy: Techniques for Analyzing Industries and Competitors which is widely viewed as the foundation of modern competitive intelligence.
[15] The first professional certification program (CIP) was created in 1996 with the establishment of The Fuld-Gilad-Herring Academy of Competitive Intelligence in Cambridge, Massachusetts.
[17] These issues were widely discussed by over a dozen knowledgeable individuals in a special edition of the Competitive Intelligence Magazine that was dedicated to this topic.
[24] For example, in 1997 the École de guerre économique [fr] (School of economic warfare) was founded in Paris, France.
[citation needed] Organizations execute competitive intelligence activities not only as a safeguard to protect against market threats and changes, but also as a method for finding new opportunities and trends.
One of the major activities involved in corporate competitive intelligence is use of ratio analysis, using key performance indicators (KPI).
The actual importance of these categories of information to an organization depends on the contestability of its markets, the organizational culture, the personality and biases of its top decision makers, and the reporting structure of competitive intelligence within the company.
Strategic intelligence (SI) focuses on the longer term, looking at issues affecting a company's competitiveness over the course of a couple of years.
This type of intelligence work involves among others the identification of weak signals and application of methodology and process called Strategic Early Warning (SEW), first introduced by Gilad,[27][28][29] followed by Steven Shaker and Victor Richardson,[30] Alessandro Comai and Joaquin Tena,[31][32] and others.
According to Gilad, 20% of the work of competitive intelligence practitioners should be dedicated to strategic early identification of weak signals within a SEW framework.
Tactical Intelligence: the focus is on providing information designed to improve shorter-term decisions, most often related with the intent of growing market share or revenues.
With the right amount of information, organizations can avoid unpleasant surprises by anticipating competitors' moves and decreasing response time.
Examples of competitive intelligence research is evident in daily newspapers, such as The Wall Street Journal, Business Week, and Fortune.
The former includes pre-trained statistical parsers that can discern elements key to establishing trends and evaluating competitive positions and responding appropriately.
[33] Public information mining from SEC.gov, Federal Contract Awards, social media, vendors, and competitor websites now permits real-time counterintelligence as a strategy for horizontal and vertical market expansion and product positioning.
Competitive intelligence shares some aspects of knowledge management; they are human-intelligence- and experience-based for a more-sophisticated qualitative analysis.
[37][verification needed] Ben Gilad and Jan Herring lay down a set of prerequisites defining competitive intelligence, distinguishing it from other information-rich disciplines such as market research or business development.
They show that a common body of knowledge and a unique set of tools (key intelligence topics, business war games and blindspots analysis) distinguish competitive intelligence; while other sensory activities in a commercial firm focus on one segment of the market (customers, suppliers or acquisition targets), CI synthesizes data from all high-impact players (HIP).