What is competitive intelligence? Why analyze? Top 5 analysis tools Tips to remember

1. Competitive Intelligence
Analysis Tools For
Economic Development
June 2009
www.intelegia.com
www.twitter.com/citweetz

2. 2 © Intelegia, 2009
Introduction
•What is competitive intelligence?
•Why analyze?
•Top 5 analysis tools
•Tips to remember

3. 3 © Intelegia, 2009
What is Competitive Intelligence?
As defined by Wikipedia (June 2009):
Competitive Intelligence is the action of gathering, analyzing, and applying information
about products, domain constituents, customers, and competitors for the short term and
long term planning needs of an organization. Competitive Intelligence (CI) is both a
process and a product. The process of collecting, storing and analyzing information about
the competitive arena results in the actionable output of intelligence ascertained by the
needs prescribed by an organization.

4. 4 © Intelegia, 2009
Why Analyze?
• Clients (or internal users) do not have the time to wade
through raw intelligence
• Capture insights from public information sources to gain
a competitive advantage
• Present possible answers to established Key
Intelligence Topics (KITs)
• Supply a value added aspect to a solid research
process

5. 5 © Intelegia, 2009
Top 5 Analysis Tools
• SWOT Analysis
• Competitor Profile
• STEEP Analysis
• Porter’s Five Forces
• SPACE Matrix
Call Isabelle Poirier, Investment Strategist, at +1 (514)
276-1700 Ext. 104 to inquire about your customized
seminar solution to learn about these tools plus five more
analysis frameworks for economic development.

6. 6 © Intelegia, 2009
Analysis Tool #1: SWOT Analysis
Description:
An established framework that aids in taking inventory of
firm’s overall Strengths and Weaknesses; and industry’s
Opportunities and Threats. By identifying each element,
decision makers can utilize the resources necessary to
overcome the challenges that are present in firm and
industry efficiently.
Objective:
To discover strategic options to reach objectives by
assessing a firm’s position within its industry given its
internal and external environments.
Information Needed:
When collecting the raw data for the SWOT analysis, it is
important to be free from bias. It is essential that each
element is judged fairly by experience personnel or by a
group. Once this aspect is settled, the information must
originate internally for the strengths and weaknesses.
Information can come from industry reports, articles and
experts’ insights. With all the gathering information,
decision makers can complete the first part of the exercise
by answering the following questions located in each
quadrant.
I) What is the firm doing well? (S)
II) What can the firm improve upon? (W)
III) What are the opportunities for the firm to grow? (O)
IV) What are the threats or changes in the external
environments that the firm should avoid? (T)
Bombardier Transportation
Company Profile on LinkedIn

7. 7 © Intelegia, 2009
Analysis Tool #2: Competitor Profile
Description:
An overview of competitors’ past and present activities in the
industry. The profile entails examining management,
products and or services and financial status of
competitors.
Objective:
To provide decision makers with detailed information that can
influence plans to overcome competitors’ strengths and
exploit weaknesses.
Information Needed:
The initial step should entail gathering all available information
regarding competitors. Dated information should not be
discarded however current details are preferred. Once the
information is collected, the second task of profiling can begin.
The information must be categorized under the following sub-
profile groups.
I) Information to help senior management prepare for a
meeting with clients, potential partners, etc. (ie, news,
profiles of decision makers, historical data)
II) Information to analyse the opportunity to acquire a company
(ie, financial data, list of customers, strength and
weaknesses assessment)
III) Information to build awareness internally about a competitor
(ie, pricing, bidding data, description of service)
IV) Information to consider an opportunity for partnership (ie,
past and existing partnerships, management style,
corporate objectives)
Call Isabelle Poirier, Investment
Strategist, at +1 (514) 276-1700 Ext.
104 to inquire about your customized
seminar solution to learn about this tool
plus more analysis frameworks for
economic development.

8. 8 © Intelegia, 2009
Analysis Tool #3: STEEP Analysis
Description:
An analysis framework that examines the macroeconomic
environment that a firm competes in based on five factors
socio-cultural, technological, economic, environmental,
political
Objective:
To prepare firms to deal with external factors that could affect
business initiatives at the present time or the future. When
there are favorable conditions in the environment, firms can
use their expertise to benefit from the changes to become
more competitive.
Information Needed:
Socio-Cultural:
• Population growth rate and age profile
• Population health, education and social mobility, and attitudes to
these
• Population employment patterns, job market freedom and attitudes
to work
• Press attitudes, public opinion, social attitudes and social taboos
• Lifestyle choices and attitudes to these
• Socio-Cultural changes
Technological Environment:
• Impact of emerging technologies
• Impact of Internet, reduction in communications costs and
increased remote working
• Research & Development activity
• Impact of technology transfer
Economic
Current and project economic growth, inflation and interest rates
• Unemployment and labor supply
• Stage of business cycle
• Labor costs
• Levels of disposable income and income distribution
• Impact of globalization
• Likely impact of technological or other change on the economy
• Likely changes in the economic environment
Environmental
• Air and water quality
• Sources of energy
• Pollution levels
• Raw Materials
• Level of environmental regulation
Political
• Government type and stability
• Freedom of press, rule of law and levels of bureaucracy and
corruption
• Regulation and de-regulation trends
• Social and employment legislation
• Tax policy, and trade and tariff controls
• Environmental and consumer-protection legislation
• Likely changes in the political environment

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Analysis Tool #4: Porter’s Five Forces Model
Description:
Created by Harvard Business School professor, Michael
Porter, the five forces analysis framework attempts to assess
the level of competition within an industry. The process is
based on examining the influences on a sector on the basis of:
1. Existing companies,
2. Potential new companies
3. Substitutes for products offered
4. Suppliers
5. Customers
By understanding the forces placed on the sector, decision
makers may be in the best position to realize the structure and
dynamics of a sector.
Objective:
To provide insights into competitive environments on a
national and global scale. Results from the analysis exercise
can be used to make the right strategic decision to become a
leader within an industry.
Information Needed:
Gathering information for this framework is rather
straightforward. Details which corresponds to each force
should be recent and reflect the present day realties in the
industry. The information should answer the following
questions:
Existing companies (Rivalry)
a) How many firms are active in the industry?
b) What are the fixed costs assigned to operating
in the industry?
c) How do products / services differ from other
firms in the industry?
Potential new companies (Barriers To
Entry)
a) Are patented needed to compete in the
industry?
b) What are the costs associated with entering in
the industry?
c) Is there a sense of brand loyalty among buyers
/ customers?
Substitutes for products offered
a) How easy can a product or service be
substituted?
b) Can the product or service be offered at
cheaper price?
c) What is buyers’ willingness to accept
substitutes?
Suppliers
a) How many suppliers exist for a given product
in the industry?
b) What are the costs associated in switching
suppliers?
c) Do suppliers produce specific materials for an
unique product?
Customers (Bargaining power)
a) How many customers exist in the industry?
b) What is role of quality when obtaining products
or services
c) Is it easy for buyers to switch their supplier?

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BuyersRivalry Among Competitors
Potential
Entrants
Suppliers
Substitutes
Analysis Tool #4: Porter’s Five Forces Model
Threats of New
EntrantsBargaining
Power
Bargaining
Power
Threats of Substitutes

11. 11 © Intelegia, 2009
Analysis Tool #5: SPACE Matrix
Description:
The Strategic Position and Action Evaluation (SPACE) matrix
is a valuable method for analyzing the competitive position
of an organization. It makes use of two internal dimensions
(financial strength and competitive advantage) and two
external dimensions (industry strength and environmental
stability), to determine the organization’s strategic posture in
the industry. The firm’s strategic posture is then classified
broadly as: aggressive, competitive, conservative or
defensive.
Objective:
The key objective of utilizing the SPACE matrix is to identify
the posture of a firm within an industry in terms of strategic
initiatives.
Information Needed:
In order to apply the SPACE matrix, researchers are called
upon to collect qualitative and quantitative information in
the form of aspects that can describe environmental stability
(ES), industry strength (IS), competitive advantage (CA) and
financial strength (FS)
Environmental Stability (ES) Technological Change
Rate of Inflation
Demand Variability
Price Range of Competing
Products
Barriers to Entry into The Market
Competitive pressure and Price
Elasticity of Demand
Industry Strength (IS) Growth and Profit Potential
Financial Stability
Technological Know-How
Resource Utilization
Capital Intensity
Ease of Entry Into The Market
Productivity or Capacity Utilization
Competitive Advantage (CA) Market Share
Product Quality
Product Life Cycles
Product Replacement Cycles
Customer Loyalty
Competition’s Capacity Utilization
Technological Know How
Vertical Integration
Financial Strength (FS) Return On Investment
Leverage
Liquidity
Capital Required / Available
Ease of Exit From The Market
Risk Involved In Business

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Analysis Tool #5: SPACE Matrix
FS
ES
C o nse r v a tiv e S t r a t e g y A g g r e ssiv e S t r a t e g y
D e f e nsiv e S t r a t e g y C om p e t it iv e S t r a t e gy

13. 13 © Intelegia, 2009
Tips To Remember
• Always keep in mind the analysis tool(s) that will be
applied while searching for relevant and timely
information
• Take the time to perfect your analysis skills by
attending seminars and working on case studies
• The more strategic insights presented to
management, the more value the competitive
intelligence function will have.
For more tips, read the Tools For Thought blog at
http://intelegia.com/mediacenter/tools_for_thought/

14. 14 © Intelegia, 2009
About Intelegia
Intelegia, a subsidiary of E&B DATA, is a company that strives to
assist individuals in understanding the changes in the business
environment through internet intelligence. Via training, consulting
and publications, Intelegia aims to provide the best approaches
and tools to obtain the best information and utilize decision-
making frameworks.
Call Isabelle Poirier, Investment Strategist, at +1 (514)
276-1700 Ext. 104 to inquire about your customized
seminar solution to learn about these tools plus five
more analysis frameworks for economic development.