Competitive Intelligence in Practice

Article

Competitive intelligence practice in liquor retailing: Evidence from a longitudinal case analysis by Constantinos Vasilios Priporas 

Journal

International Journal of Retail and Distribution Management, 2019. Vol. 47, No. 9, pages 997-1010.

Reviewer

Dr. Lourival Carmo Monaco Neto, Agronomic Engineer

Dr. Monaco holds an MBA in agribusiness, a master’s degree in plant production and a PhD in business administration from the University of São Paulo. Since 2015, he has worked as a consultant in the agribusiness area for several consulting firms. While completing his PhD, Monaco served as a visiting scholar at Purdue University’s Center for Food and Agricultural Business.

Summary

This article had the objective of exploring the use of competitive intelligence in the retail sector, more specifically, the liquor segment. The big question was, “How do liquor retailers practice competitive intelligence?”

The analyzed literature states that even though competitive intelligence is an important factor for the competitiveness of companies of any size, only larger-scale companies employ competitive intelligence in a professional manner. In the smaller companies, it remains an unknown tool or is done in an informal and embryonic way, likely due to lack of trained personnel and financial resources.

This longitudinal case study was based on a small liquor store in Northwest America. The major findings were that the respondents weren’t aware of the concept of competitive intelligence, but they used many sources of information to help with their decision making such as direct observations, customers, distributors’ sales representatives and truck drivers, mystery shoppers and industry public reports. The store owners constantly monitored competitors’ prices, patronage and offerings so they could, in response, better plan their own buying, pricing, marketing and overall customer experience based on what they had learned.

Simple activities such as driving by their competitors’ stores, talking to suppliers and customers that had been to other stores, disguising themselves as customers in competitors’ stores and reading industry reports gave them enough information to apply simple and cheap analysis tools such as SWOT, PEST and marketing mix. In doing so, they converted data and information into intelligence and were able to create a better and more efficient strategic plan for their business.

What this means for Food and Agricultural Business

The food and agribusiness industry is evolving very fast, and not being able to stay updated and prepared for these changes may cost a company its survival, no matter how big or small it is. The fact that competitive intelligence plays a major role in any company’s competitiveness in any industry is well documented. Most managers, when asked, say that they strongly believe having competitive intelligence activities in their companies improves or would improve their decision making and, therefore, their performance.

The first big roadblock for competitive intelligence in agribusiness is that many companies don’t actually know what it is. Many definitions exist, but if I were to sum them into a simple sentence, I would say that it is the process of collecting and analyzing data and information and communicating those findings to decision makers with the intent of improving decision making. But more than a process, competitive intelligence is also a mindset, a way to organize your actions to achieve better results in any decision that you are going to make, no matter how big or small it is. You can practice competitive intelligence in your daily routine.

Another major problem is that companies think it’s only possible to implement competitive intelligence actions and processes if they have either formally trained people and/or a large amount of resources to do so. This couldn’t be further from the truth. As I mentioned and can be seen in the article, simple actions can result in major performance improvements but have to be done in a structured and intentional way. These kinds of actions can cost very little, demanding more of a change in the way the company thinks and relates to information and data (organizational culture) than acquiring costly software and assets or hiring expensive consultants. The goal is to have an intelligence-driven organization!

It is possible for food and agribusiness companies of any size to, following the liquor store example, monitor their competitor offerings, prices, promotions and overall actions through mystery customers, benchmarking, talking to suppliers and customers, and so on to better understand how their market is behaving. Using salespeople as an intelligence network, for example, is a very powerful tool. They are out in the field and hold many connections across the industry and all levels of the value chain. Through those connections, they can gather a great deal of primary information, which is extremely valuable in food and agribusiness. All of this information, when added to public information such as commodity prices, industry reports and technical information, will provide the resources necessary to perform some basic but powerful analysis at a very low cost. The results of these analyses form the foundation of any decision-making process for strategical purposes, as well as day-to-day (tactical) decisions.