Given the priority of competitiveness in modern companies, practitioners of competitive intelligence (CI) need
to come to terms with what business and competitive analysis is and how it works. More importantly, they need to
be able to convert the wealth of available data and information into a valuable form for decision making and action.
Collected data must be converted into intelligence. This is accomplished through analysis.
Strategic and Competitive Analysis is a book about analysis. We know that using this term often makes the groups
we advise and teach uncomfortable. People often conjure up images of the genius wearing glasses inputting oodles
of data into arcane computer programs while simultaneously sifting through reams of paper containing differential
equations and advanced statistics. This image does not meet the reality of today's effective analysts who know
that analysis does not have to be complicated, complex, or convoluted to be valuable. As we try to remind our audiences,
being a good analyst does not require ten years of postgraduate education, just some basic common sense, smarts,
and a desire to learn. Nevertheless, analysis is one of the more difficult and critical roles a consultant, strategist,
or intelligence specialist is called upon to perform. Although great strides have been made in recent years in
terms of planning strategic and intelligence projects and collecting data, the same cannot be said for analysis.
The growth of competitive intelligence during the 1990s was fast paced. More and more conferences, workshops,
and university courses in managing competitive intelligence than ever before were being offered around the world
by individuals with strong CI research and practice backgrounds. Research in the field became more plentiful and
mature as witnessed by the range of original articles appearing in places like Competitive Intelligence Review,
Competitive Intelligence Magazine, AGSI Journal, and Long Range Planning. Popular books on the topic also increased
in availability as an online search of Amazon.com or BarnesandNoble.com will quickly demonstrate.
Despite all of these advances and growth in CI, some areas of this burgeoning field have received more or less
attention than others. The growth of digital communication and information technology, and especially the Internet,
has led to much attention being given to processes and techniques of data collection. Planning competitive intelligence
projects has also gotten a boost from the recent attention given more broadly to strategic planning. Despite these
areas of popular interest, two areas that have received disproportionately less attention are analysis and its
dissemination. In fact, survey research underlies the authors' contention that many practitioners have limited
understanding of the breadth and depth of the challenge underlying these areas. It is our intention to begin remedying
this situation by offering the first book devoted entirely to the management of competitive analysis.
This book comprehensively examines the wide spectrum of techniques involved in analyzing business and competitive
data and information including strategic, competitive, customer, environmental, evolutionary, and temporal analysis
models. It helps business analysts and decision makers to draw effective conclusions from limited data and to put
together information that does not often fit together at first glance.
There are literally hundreds of strategic and competitive analysis techniques that we could have included in
this book. It was not our intention to offer an exhaustive listing of the population of these techniques, assuming
that it could be accurately done in the first place. Instead, we have extensively reviewed the literature in the
field and considered survey research and our own experiences in determining those we view as potentially being
the most applicable across a broad range of applications in the analysis process.
Although we have tried to include both classic and evolving techniques, we recognize that some techniques being
used in consulting and industry may not be included here. Analysis is a process that requires both creativity and
technical knowledge, and we have tried to provide a rigorous and systematic contribution toward the latter with
this book. We recognize and hope that analysts will creatively develop techniques not included in this book that
will provide for better outcomes in their specific contexts.
The reader should also be alert to the fact that any listing of techniques is bound to run into a variety of
problems of semantics and definitional confusion. Some of the techniques included in this book are known by multiple
names. This may have occurred because the technique came to be associated with a particular originating organization
(e.g., the BCG matrix), a particular company's use (e.g., the GE business screen), a particular author (e.g., Porter's
Five Forces model), or has retained a generic nomenclature (e.g., environmental analysis). We also recognize that
some of the techniques included in this book have seen modifications in use over the years or are derivatives of
other closely related techniques. In all cases, we have tried to include and describe the most popularly known
versions of the techniques as opposed to all of a technique's possible derivatives. We have also tried to alert
the reader to where there is overlapping between techniques by referring the reader to the overlapping constructs
elsewhere in the text.
We must also note to our readers that it was not our intention to "reinvent the wheel" when it comes
to the analytical techniques. The techniques we have included herein all have a history. This book's techniques
have been and are in use in real organizations; they do not exist just in theory.
Many of the included techniques were conceptualized by leading economists, financial and cost accountants, futurists,
business professors, consultants, and other insightful practitioners or theoreticians. They often developed their
ideas in an effort to solve pressing analytical problems that they faced. We are grateful to these individuals
for enlightening our understanding of strategic and competitive analysis, and we make a sincere attempt to acknowledge
the originators of these techniques in this book. Nevertheless, there are times when accurately making this acknowledgment
can be difficult, such as when the technique (e.g., SWOT or TOWS) was quickly and widely accepted and now forms
the commonly held body of knowledge underlying the domain.
HOW TO USE THIS BOOK
To assist our readers, the majority of this book is self-contained, with the array of analytical techniques
being supported by references for further reading for those individuals that want lengthier treatments. The book
is organized into two main parts. Part I provides an introduction that establishes the context for the comprehensive
selection of analytical tools. As such, it includes several chapters that describe and discuss the basic facts
about analysis, and how analysis relates to strategy and competitive intelligence. The last chapter in Part I describes
our unique FAROUT(c) method for understanding the application of the various tools. We strongly recommend that
readers thoroughly review it before progressing into the remaining sections containing the analytical techniques
themselves.
We have tried to make the book easy for the reader to use. The basic structure of the chapters containing the
analytical techniques is common throughout Part II and contains the following format:
Short Description. A brief definition of the purpose and objective of the analytical model to allow the analyst
a quick and handy reference guide.
Background. To place the model in the context of management, this section outlines a broad description of the
history behind the development of the analytical technique.
Strategic Rationale and Implications. Understanding the strategic thinking and implications associated with
a particular analytical technique is important in order to evaluate the appropriateness of a particular tool. This
section reviews the strategic issues inherent in each technique.
Strengths and Advantages. Each model has its own strengths and advantages that need to be weighed in light
of the purpose of the analysis. This section briefly reviews those strengths and advantages.
Weaknesses and Limitations. Likewise, each model has its own inherent weaknesses and limitations. The weaknesses
and limitations identified in this section need to be taken into account when performing the analysis.
Process for Applying the Technique. Typically the most detailed section of each chapter, this is the "how
to" of the analytical technique and identifies the necessary steps required to use this tool. Case studies,
figures, and tables are also provided to guide the analyst through the strategic thinking required for each model.
FAROUT Summary. Unique to this book, the FAROUT Summary allows analysts, at a quick glance, to identify the
ease of use, practicality, and usefulness of each model.
Related Tools and Techniques. Each model of analysis is related to or supported by several other techniques
that may aid or enhance the analyst's task. This section provides a useful guide of related tools and techniques
that support the objective and purpose of each analytical model.
References. For those analysts wanting to delve further into a particular technique, references for additional
readings are provided at the end of each chapter.
Readers will benefit themselves by becoming comfortable with this template. We did not design the book for the
reader to complete in one sitting. Instead, we have designed it in order that it may be frequently used as a handy
comparison and reference source. In this respect, it can be applied in a "just in time" fashion so as
to proactively or concurrently meet analytical needs as they arise in the larger consulting, strategy, and CI processes.
The book features conceptual ideas about strategic and competitive analysis, along with a strong bias toward
practical application. Among the unique aspects of this book that readers should find valuable are these:
It provides in one easy location two dozen of the most common and popular, models of analysis used in business.
Normally, executives and students would have to go to multiple sources to locate each model. Here, for the first
time, the most commonly used models are defined and explained in one book.
Every model is also uniquely evaluated using FAROUT--an evaluation process for identifying the ease of use,
practicality, and usefulness of each model. This is the first time that FAROUT will be introduced to the market.
FAROUT allows analysts or decision makers to understand the strengths and weaknesses of the techniques.
An easy-to-use, consistent format (i.e., template) is utilized to provide the reader with a faster understanding
of how to apply the techniques.
The book covers both the so-called classic strategy techniques (such as value chain analysis) along with some
of the newer popular techniques (such as functional capability and resource analysis).
It provides external techniques addressing the environments and industry that the organization competes in,
along with the techniques for focusing internally on the organization.
The book provides references to more comprehensive treatments of the techniques for those who want to investigate
them in greater depth.
Summary
For Strategic Management courses.
This book comprehensively examines the wide spectrum of techniques involved in analyzing business, competitive
data, and information. Twenty-four analytical tools are discussed and evaluated with examples to illustrate their
most effective application. Perfect as a supplement to any strategy course.
Features :
Consistent format for each technique�Description, background, rationale and implications, advantages, limitations,
process, related tools.
Coverage of �classic� as well as more popular contemporary techniques.
PART 1. ANALYSIS AND ITS RELATIONSHIP TO COMPETITIVE INTELLIGENCE AND STRATEGY.
1. The Strategy and CI Process.
2. Analysis and Its Pitfalls.
3. The FAROUT Method.
PART 2. THE TECHNIQUES OF STRATEGY AND COMPETITIVE ANALYSIS.
Section 1. Strategic Analytical Techniques.
4. BCG Growth (Product Portfolio) Matrix.
5. GE Business Screen.
6. Industry Analysis.
7. Strategic Group Analysis.
8. SWOT Analysis.
9. Value Chain Analysis.
Section 2. Competitive and Customer Analysis Techniques.
10. Blindspot Analysis.
11. Competitor Analysis.
12. Customer Segmentation and Needs Analysis.
13. Customer Value Analysis.
14. Functional Capability and Resource Analysis.
15. Management Profiling.
