The relationship between competitive intelligence and company success : a thesis presented in partial fulfilment of the requirements for the degree of Masters of Business Studies in Marketing at Massey University
The past few years have seen a growing interest in competitive intelligence amongst academics and practitioners. This growth has been affected by a high degree of scepticism regarding the ability of competitive intelligence to effectively support business performance. The objectives of this study was to determine whether a relationship exists between competitive intelligence activities and company performance in a sample of New Zealand companies; to determine the level of competitive intelligence activities undertaken in this sample; and to determine the impact of the results on marketing strategy in general. To achieve this a mail survey was conducted and results based on a sample of 125 strategic business unit managers from various sized manufacturing, importing and distributing companies, in four respective industries of the Chemical industry sector. A composite competitive intelligence score was developed that included the following elements of the competitive intelligence cycle, namely: gathering activities, focus of intelligence, analysing activities, dissemination channels, use of intelligence, top management involvement and counter intelligence. Performance measures were self reported measures of growth over a three-year period (1994-1997). Although the results revealed a significant positive correlation between the composite competitive intelligence score and market share growth, it was a weak relationship with only three percent of the variance in market share explained by the composite competitive intelligence score (assuming this was the direction of causation). The competitive intelligence approach in the Chemical industry sector was found to be an ad hoc approach, characterised by informality and uncoordinated actions. Strategic business unit managers indicated that, even though using a predominantly informal approach, competitive intelligence activities: ▪ Improved their understanding of the dynamics of the market place. ▪ Improved implementation of new products or projects. ▪ Led to concrete actions. ▪ Helped shape policies. Although above mentioned benefits did not directly explain the variance in market share and only provide weak empirical support for an investment in competitive intelligence, it could indirectly play a significant role in the formulation of marketing strategies and ultimately in the creation and maintaining of a competitive advantage for a company.