Determinants of competitive intelligence development

CI obtained its present pattern in the mid-1990s, and, according to Bergeron and Hiller (2002), it was influenced by several factors relating to social experience and historical precedents: (1) military intelligence; (2) politics; (3) competition in business; (4) the economic situation; (5) development of technologies; (6) culture; (7) ethics; (8) geographical location.

Examining the significance of competitive intelligence from an historical point of view, it should be mentioned that an important role in battle planning and formation of tactics was attributed to scouts and spies in as early as 500 BC. In this period, the Chinese General Sun Tzu wrote a treatise, ‘Art of War’, in which the value of information obtained in the process of intelligence was emphasised. Sun Tzu’s treatise became a basis for a variety of approaches to military intelligence (Griffiths, 2005). In approximately 1600, the Japanese emperor Toyotomi Hideyoshi successfully borrowed Sun Tzu’s strategic theories.

In the 19th century, the first studies of market (marketing) were initiated in Europe and in America.

Market research identified which market niche remained free for successful operation; however, to a certain extent, it was difficult to foresee how to use competitive advantages for occupation of such a niche, in that it meant outpacing the existing and anticipating potential competitors without previous knowledge of their developmental strategy.

In the mid-20th century, Japan experienced rapid economic growth. Western analysts of that period believed that Japanese companies were not capable of creating anything new, and that they could only copy in a perfect manner the existing technologies (Mumford and Hendricks, 1996). It was then that the Japanese Foreign Trade Organisation began taking active measures in collecting and accumulating business information and conducting investigations of competitors. The information obtained was processed and passed over to representatives of Japanese industry in order to ensure a continuous flow of information with regard to ongoing processes and possible changes in the business environment.

Accurate CI in Japan at that time explains the so-called Japanese economic miracle. In Japan, information has always been regarded as a product having a genuine value.

In the 1950s, the Chinese government used intelligence systems to support scientific and technological research in their own country. During this time, several articles about industrial espionage appeared,

directly responsible for data collection, analysis and distribution (Kahaner, 1996). Investigation of competitors as a process concept for improving the competitiveness of an organisation was proposed only as recently as the 1970s (Dishman & Calof, 2008). In 1986, people professionally addressing CI established the International Society of Competitive Intelligence Professionals (SCIP) in the USA. Today, this society has over 7,000 members from 64 countries, including Latvia.

In each period of CI development, the role of business information analysis became more important, which is substantiated in Table 5, according to previous research.

Table 5. The evolution of competitive intelligence

TIME business intelligence (BI) and the narrower version practiced as competitor analysis (Fleisher &

Bensoussan, 2007).

The number of publications and citations (source: Web of Science) on the topics ‘Business intelligence’

and ‘Competitive Intelligence’ has been increasing with each year, and skyrocketed at the beginning of the 21^th century (Figures 8 & 9).

Figure 8. The dynamic of publications on competitive intelligence 2000-2017 (Source: Web of Science)

Figure 9. The dynamic of citations on competitive intelligence 2001-2017

(Source: Web of Science)

On the basis of these figures, it can be concluded that the demand for CI has grown objectively, and is a logical continuation of progress; it is a regular period in the development of world economics and management. In today’s rapid, innovative workplace, information technology (IT) faces many new challenges to overcome the requirements of multiple and flexible methods of working in all industries.

Hence, it is vital to have flexible and efficient ways of working via technology initiatives (Gottschalk &

Karlsen, 2005).

Numerous worldwide enterprises make use of external services for CI. The most recognisable global CI and communication efficiency assessment company is ‘Observer’, the history of which dates back 150 years. The ‘Observer’ Group operates in 12 countries (Great Britain, Sweden, Germany, Finland, Norway, Denmark, Portugal, Ireland, Estonia, Lithuania, Canada and the USA), and it employs over 2,600 information specialists and analysts. ‘Observer’ serves more than 50,000 clients all over the world, who work in both the private and the public sector, and represent most industries. There are large international corporations and leading enterprises of industry, as well as representatives of small businesses, and they include governmental institutions and non-governmental organisations.

delivery of regular operational information on aspects of the business environment to complicated research and analysis of competitors’ strategies or return on investment in public relations. By asking professionally formulated and selected questions, specialists help to specify what information is required for the particular enterprise, and which aspects are the most important.

Under the impact of globalisation of economics and development of technologies, the business environment is changing more rapidly than ever before, which means that the role of CI is becoming increasingly important. In order to ensure stable and convincing development of an organisation, innovations and changes in business activity are followed on an ongoing basis. Some internal organisational resources, such as CI governance and the perceptions of CI characteristics influence the successful deployment of CI. Organisations that practice good CI governance with strong moral and financial support from upper management have an opportunity to realise the dream of having successful CI initiatives in place (Ahmad, 2015).

Modern means of communications and telecommunications radically expand the facilities of information turnover, often resulting in a delusion with regard to availability of informational resources. The majority of the information found on the Internet is useful; therefore, information supply staff, including acquirers of information, face a new challenge, namely, to provide the employees of their organisation with network information resources to the maximum possible extent, without simultaneously threatening the information holder’s intellectual property or business secret.