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Learn how to identify opportunities and threats through competitive intelligence to create an environmentally conscious organization. Understand what competitive intelligence is and what it is not, its importance for decision-making, and its role in alerting management to potential risks and opportunities. Explore the segments of the general environment and Porter's Five Forces Model to analyze industry competition.
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What Competitive Intelligence Is and Is Not • Competitive Intelligence Is Not … • Spying. Spying implies illegal or unethical activities. It is a rare activity. • A crystal ball. Competitive Intelligence is good approximation of reality; it does not predict the future. • Database search. Data by itself is not good intelligence. • A job for one smart person. • Competitive Intelligence Is … • Information that has been analyzed to the point where you can make a decision. • A tool to alert management to early recognition of both threats and opportunities. • A means to deliver reasonable assessments. • A way of life, a process. Adapted from Exhibit 2.2 What Competitive Intelligence Is and Is Not!
Segments of the general environment include: Demographic Sociocultural Legal/Political Technological Economic Global General environmental trends and events: Little ability to predict them Even less ability to control them Can vary across industries General Environment The General Environment
Porter’s Five Forces Model of Industry Competition • Threat of new entrants • Threat of substitutes • Power of suppliers • Power of buyers • Rivalry among existing firms