A broad definition of competitive intelligence 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 making strategic decisions for an organization.
Key points of this definition:
- Competitive intelligence is an ethical and legal business practice, as opposed to industrial espionage which is illegal.
- The focus is on the external business environment.
- There is a process involved in gathering information, converting it into intelligence and then utilizing this in business decision making. Some CI professionals erroneously emphasize that if the intelligence gathered is not usable (or actionable) then it is not intelligence.
A more focused definition of CI regards it as the organizational function responsible for the early identification of risks and opportunities in the market before they become obvious. Experts also call this process the early signal analysis. This definition focuses attention on the difference between 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.
The term CI is often viewed as synonymous with competitor analysis, but competitive intelligence is more than analyzing competitors — it is about making the organization more competitive relative to its entire environment and stakeholders: customers, competitors, distributors, technologies, macro-economic data etc.
Historic development 
The literature associated with the field of competitive intelligence is best exemplified by the detailed bibliographies that were published in the Society of Competitive Intelligence Professionals' refereed academic journal called The Journal of Competitive Intelligence and Management. Although elements of organizational intelligence collection have been a part of business for many years, the history of competitive intelligence arguably began in the U.S. in the 1970s, although the literature on the field pre-dates this time by at least several decades. 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. This has since been extended most notably by the pair of Craig Fleisher and Babette Bensoussan, who through several popular books on competitive analysis have added 48 commonly applied competitive intelligence analysis techniques to the practitioner's tool box. In 1985, Leonard Fuld published his best selling book dedicated to competitor intelligence. However, the institutionalization of CI as a formal activity among American corporations can be traced to 1988, when Ben and Tamar Gilad published the first organizational model of a formal corporate CI function, which was then adopted widely by US companies. The first professional certification program (CIP) was created in 1996 with the establishment of The Fuld-Gilad-Herring Academy of Competitive Intelligence in Cambridge, MA.
In 1972 the Society of Competitive Intelligence Professionals (SCIP) was founded in the U.S. and grew in the late 1990s to around 6000 members worldwide, mainly in the U.S. and Canada, but with large numbers especially in UK and Australia. Due to financial difficulties in 2009, the organization merged with Frost & Sullivan under the Frost & Sullivan Institute. SCIP has since been renamed "Strategic & Competitive Intelligence Professionals" to emphasise the strategic nature of the subject, and also to refocus the organisation's general approach, while keeping the existing SCIP brandname and logo. A number of efforts have been made to discuss the field's advances in post-secondary (university) education, covered by several authors including Blenkhorn & Fleisher, Fleisher, Fuld, Prescott, and McGonagle, among others. Although the general view would be that competitive intelligence concepts can be readily found and taught in many business schools around the globe, there are still relatively few dedicated academic programs, majors, or degrees in the field, a concern to academics in the field who would like to see it further researched. 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. In France, a Specialized Master in Economic Intelligence and Knowledge Management was created in 1995 within the CERAM Business School, now SKEMA Business School, in Paris, with the objective of delivering a full and professional training in Economic Intelligence. A Centre for Global Intelligence and Influence was created in September 2011 in the same School.
On the other hand, practitioners and companies regard professional accreditation as especially important in this field. In 2011, SCIP recognized the Fuld-Gilad-Herring Academy of Competitive Intelligence's CIP certification process as its global, dual-level (CIP-I and CIP-II) certification program.
Global developments have also been uneven in competitive intelligence. Several academic journals, particularly the Journal of Competitive Intelligence and Management in its third volume, provided coverage of the field's global development. For example, in 1997 the Ecole de Guerre Economique (School of economic warfare) was founded in Paris, France. It is the first European institution which teaches the tactics of economic warfare within a globalizing world. In Germany, competitive intelligence was unattended until the early 1990s. The term "competitive intelligence" first appeared in German literature in 1997. In 1995 a German SCIP chapter was founded, which is now second in terms of members in Europe. In summer 2004 the Institute for Competitive Intelligence was founded, which provides a post-graduate certification program for Competitive Intelligence Professionals. Japan is currently the only country that officially maintains an economic intelligence agency (JETRO). It was founded by the Ministry of International Trade and Industry (MITI) in 1958.
Accepting the importance of competitive intelligence, major multinational corporations, such as ExxonMobil, Procter & Gamble, and Johnson and Johnson, have created formal CI units. Importantly, 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.
Organizations use competitive intelligence to compare themselves to other organizations ("competitive benchmarking"), to identify risks and opportunities in their markets, and to pressure-test their plans against market response (war gaming), which enable them to make informed decisions. Most firms today realize the importance of knowing what their competitors are doing and how the industry is changing, and the information gathered allows organizations to understand their strengths and weaknesses.
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. The actual time horizon for SI ultimately depends on the industry and how quickly it’s changing. The general questions that SI answers are, ‘Where should we as a company be in X years?’ and 'What are the strategic risks and opportunities facing us?' 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, followed by Steven Shaker and Victor Richardson, Alessandro Comai and Joaquin Tena, 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. Generally, it is the type of information that you would need to support the sales process in an organization. It investigates various aspects of a product/product line marketing:
- Product - what are people selling?
- Price - what price are they charging?
- Promotion - what activities are they conducting for promoting this product?
- Place - where are they selling this product?
- Other - sales force structure, clinical trial design, technical issues, etc.
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. Major airlines change hundreds of fares daily in response to competitors’ tactics. They use information to plan their own marketing, pricing, and production strategies.
Resources, such as the Internet, have made gathering information on competitors easy. With a click of a button, analysts can discover future trends and market requirements. However competitive intelligence is much more than this, as the ultimate aim is to lead to competitive advantage. As the Internet is mostly public domain material, information gathered is less likely to result in insights that will be unique to the company. In fact there is a risk that information gathered from the Internet will be misinformation and mislead users, so competitive intelligence researchers are often wary of using such information.
As a result, although the Internet is viewed as a key source, most CI professionals should spend their time and budget gathering intelligence using primary research — networking with industry experts, from trade shows and conferences, from their own customers and suppliers, and so on. Where the Internet is used, it is to gather sources for primary research as well as information on what the company says about itself and its online presence (in the form of links to other companies, its strategy regarding search engines and online advertising, mentions in discussion forums and on blogs, etc.). Also, important are online subscription databases and news aggregation sources which have simplified the secondary source collection process. Social media sources are also becoming important - providing potential interviewee names, as well as opinions and attitudes, and sometimes breaking news (e.g. via Twitter).
Organizations must be careful not to spend too much time and effort on old competitors without realizing the existence of any new competitors. Knowing more about your competitors will allow your business to grow and succeed. The practice of competitive intelligence is growing every year, and most companies and business students now realize the importance of knowing their competitors.
According to Arjan Singh and Andrew Beurschgens in their 2006 article in the Competitive Intelligence Review, there are 4 stages of development of a competitive intelligence capability with a firm. It starts with "stick fetching", where a CI department is very reactive, up to "world class", where it is completely integrated in the decision-making process.
Recent trends 
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The technical advances in massive parallel processing offered by the Hadoop "big data" architecture has allowed the creation of multiple platforms for named-entity recognition such as the Apache Projects OpenNLP and Apache Stanbol. The former includes pre-trained statistical parsers that can discern elements key to establishing trends and evaluating competitive position and responding appropriately. Public information mining from SEC.gov, Federal Contract Awards, social media (Twitter, Reddit, Facebook, and others), vendors, and competitor websites now permit real-time counterintelligence as a strategy for horizontal and vertical market expansion and product positioning. This occurs in an automated fashion on massive marketplaces such as Amazon.com and their classification and prediction of product associations and purchase probability.
Distinguishing from similar fields 
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Competitive Intelligence has been strongly influenced by the intelligence discipline of the national strategic intelligence. While research in national intelligence existed 50 years ago, competitive was a more recent introduction, becoming more mature in the 1990s. Competitive Intelligence professionals can learn from experience gained by national intelligence experts, especially in confronting complex situations in the analysis stage. Competitive intelligence is often confused with, or viewed to overlap with related fields like environmental scanning, business intelligence, and marketing research. Fleisher  questions whether the name "competitive intelligence" may not be inappropriate and compares and contrasts competitive intelligence with business intelligence, competitor intelligence, knowledge management, market intelligence, marketing research, and strategic intelligence.
Craig Fleisher[verification needed] suggests that business intelligence has two forms. Its narrower (contemporary) form is more focused on information technology and internal focus than CI while its broader (historical) definition is more encompassing than CI. Knowledge management (KM), when it isn't properly achieved (it needs an appropriate taxonomy for being up the best standards in the domain), is also viewed as being a heavily information technology driven organizational practice that relies on data mining, corporate intranets, and mapping organizational assets, among other things, in order to make it accessible to organizational members for decision making. CI shares some aspects of the real KM that is ideally and definitely human intelligence and experience-based for more sophisticated qualitative analysis, creativity, prospective views. KM is essential for effective innovations. One of the key successful factors is a powerful dedicated IT system which enables to execute the full intelligence cycle. Market intelligence (MI) is industry-targeted intelligence that is developed in real-time (i.e., dynamic) aspects of competitive events taking place among the 4Ps of the marketing mix (i.e., pricing, place, promotion, and product) in the product or service marketplace in order to better understand the attractiveness of the market. A time-based competitive tactic, MI insights are used by marketing and sales managers to hone their marketing efforts so as to more quickly respond to consumers in a fast-moving, vertical (i.e., industry) marketplace. Craig Fleisher suggests it is not distributed as widely as some forms of CI, which are distributed to other (non-marketing) decision-makers as well.[verification needed] Market intelligence also has a shorter-term time horizon than many other intelligence areas and is usually measured in days, weeks, or, in some slower-moving industries, a handful of months.
Marketing research is a tactical, method-driven field that consists mainly of neutral primary research that draws on customer data in the form of beliefs and perceptions as gathered through surveys or focus groups, and is analyzed through the application of statistical research techniques. In contrast, CI typically draws on a wider variety (i.e., both primary and secondary) of sources, from a wider range of stakeholders (e.g., suppliers, competitors, distributors, substitutes, media, and so on), and seeks not just to answer existing questions but also to raise new ones and to guide action.[verification needed]
Ben Gilad and Jan Herring lay down a set of basic prerequisites that define the unique nature of CI and distinguish 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 applied tools (Key Intelligence Topics, Business War Games, Blindspots analysis) make CI clearly different, and that while other sensory activities in the commercial firm focus on one category of players in the market (customers or suppliers or acquisition targets), CI is the only integrative discipline calling for a synthesis of the data on all High Impact Players (HIP).
More recently, Gilad focuses his delineation of CI more tightly on the difference between information and intelligence. According to Gilad, the commonality among many organizational sensory functions, whether called market research, business intelligence or market intelligence is that in practice they deliver facts and information, not intelligence. Intelligence, by Gilad, is a perspective on facts, not the facts themselves. Uniquely among other corporate functions, competitive intelligence has a specific perspective of external risks and opportunities to the firm’s overall performance, and as such it is part of an organization's risk management activity, not information activities.
Ethics has been a long-held issue of discussion amongst CI practitioners. Essentially, the questions revolve around what is and is not allowable in terms of CI practitioners' activity. A number of very excellent scholarly treatments have been generated on this topic, most prominently addressed through Society of Competitive Intelligence Professionals publications. The book Competitive Intelligence Ethics: Navigating the Gray Zone provides nearly twenty separate views about ethics in CI, as well as another 10 codes used by various individuals or organizations. Combining that with the over two dozen scholarly articles or studies found within the various CI bibliographic entries,[verification needed] it is clear that no shortage of study has gone into better classifying, understanding and addressing CI ethics.
Competitive information may be obtained from public or subscription sources, from networking with competitor staff or customers, disassembly of competitor products or from field research interviews. Competitive intelligence research is distinguishable from industrial espionage, as CI practitioners generally abide by local legal guidelines and ethical business norms.
See also 
- Society of Competitive Intelligence Professionals
- Due diligence
- SWOT analysis
- Business intelligence
- Economic and industrial espionage
- Competitor analysis
- Legal case management
- Market research
- Marketing analysis
- Open source intelligence
- Porter's four corners model
- Location intelligence
- Industry or market research
- Sourcing (personnel)
- Information broker
- Trend analysis
- Commercial intelligence
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