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Use of Competitive Intelligence Cause for Concern

Use of Competitive Intelligence ‘Cause for Concern’

A new study into New Zealand companies’ use of competitive intelligence suggests little has been learnt since the last major study in 1997.

Auckland University of Technology Faculty of Business researcher Brent Hawkins presented his findings recently at the 20th Annual Society of Competitive Intelligence Professionals in Chicago, USA.

While a wealth of studies showed the benefits of competitive intelligence in assisting directly with strategic planning and indirectly with business performance, very few New Zealand companies invested in an integrated competitive intelligence system, says Brent Hawkins.

The organisations surveyed had to have an annual turnover of NZ$500,000 or more and 41 per cent of those that took part turned over between $10 and $50 million.

Most of those who answered on behalf of the companies were senior management with 71 per cent being CEOs, managing directors or general managers.

“The fact that thirty-six per cent of companies used informal rumours regularly and 30 per cent used them continuously as their main source of competitive intelligence reflects quite poorly on New Zealand companies in terms of their understanding of competitive intelligence,” he says.

One of the objectives of the study was to assess the degree of strategic planning of New Zealand companies through observing use of competitive intelligence. “The lax attitude to competitive intelligence as shown by the survey indicates serious flaws in their approach to strategic planning.”

“The study showed that only around 10 per cent of New Zealand companies had a formal integrated competitive intelligence unit. This finding is very similar to the 1997 study but what is of more concern is that 13 per cent of the senior managers surveyed did not know what competitive intelligence was – this is a cause for concern.”

Overseas studies indicate that in many countries the use of formal integrated competitive intelligence systems was between 15-35 per cent. In Australia in 1996 it was assessed that about 15 per cent used an integrated competitive intelligence system.

Recommendations from the research included a need to conduct more research to determine why many companies don’t use competitive intelligence and for all companies to develop a formal competitive intelligence system.

“The benefits of competitive intelligence are valid for all sizes and types of organisation. Being aware of what competitors are doing in the market place enables senior management to make sound strategic decisions. It is also a key to business growth in both the domestic and export markets.”

ENDS

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