(Competitive Intellegence on Flexi Manado ) (Bab 2)

8/12/2019 (Competitive Intellegence on Flexi Manado ) (Bab 2)

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CHAPTER II

COMPETITIVE INTELLIGENCE

II.1. Definition Competitive Intelligence & Technology Watch

We now live in a world driven by hyper-competition. The knowledge base for

managing in this hyper-competitive environment is called Competitive Intelligence.

Competitive Intelligence is a process of giving you insights into what might happen in the

near future. This process requires that we go from data to information to intelligence.

Competitive Intelligence (CI) pulls together data and information from a very large

and strategic view, allowing you to predict or forecast what is going to happen. This in turn

allows to effectively strategize in relation to competitive environment. Therefore,

competitive intelligence allows to remain competitive by improving strategic decisions and

this leads to better performance against our competitors. In business, as in war, politics or

games, we cannot operate effectively unless we know what everyone else is doing.

There is a Chinese saying:

Know thy-self, know thy competition, and get it right almost every time.

Know thy-self, not know thy competition, and get it right about half the time.

Not know thy-self, not know thy competition, and get it wrong almost every time.

There are many expert who defined Competitive intelligence as it follows :

Hendri Dou define it as systematic programe of collecting, managing andprocessing information upon the activities of the competitors, client,

technologies and general tendencies of the company activieties, in view of the

decision making processand the realization of its strategic goals.1

1

Hendri Dou, Gilda Massari Coelho Lenseignement de Iintelligence Competitive

Une experience internationale, Humanisme et Entrepraise, n05, pp. 1-23, 2001


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Competitive intelligence is a systematic program for gathering and analyzinginformation about your competitors' activities and general business trends to

further your own company's goals. 2

The experts define the term business activity or enterprise (company) but inreality Competitive Intelligence applications actually used

until the territorial development by nations. 3

Technology Watch "consists in systematically capturing, analysing, disseminating

and exploiting useful technical information for the watch and growth of a company. Watch

must be ready for any scientific or technical innovation susceptible to creating

opportunities or threats." 4

The main application of Technology Watch is to obtain technical information to

make decisions in a company's production department. However, the watch processes are

also applied to commercial decision making processes. In these fields, the terms

Commercial Watch, Competition Watch or Surrounding Watch are often used, even

though Technology Watch is also used, becoming the commonly used term.

Among the two disciplines, there is a key difference: while Technology Watch

emphasises on the search and capturing of relevant information to make decisions,

Competitive Intelligence refers to the same process, but with the emphasis on creating new

information, often implying the capture of new information to understand it.

In Indonesia, competitive intelligence within the enterprise or institution is still not

widely implemented thoroughly and optimal, because it is still limited to the guidelines of

strategic plans. The actual implementation also involve foreign consultants to support the

business performance of some companies. 5

2(Larry Kahaner, 1997)

3Intelligence Economique dan Systeme Dinformation Joelle Joachim (*), Jacky Kister (*),

Yann Bertacchini (**) et Henri Dou (***)

4 http://www.upf.edu/hipertextnet/en/numero-8

5CI PSMPG page 86


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II.2 Method Of Competitive Intellegence

Competitive intelligence is a method, tool, or tools, or the way of thingking a

systematic program for the analysis of information sources, the strategy of information

collecting, information management, analysis of information by an expert team,

understanding information, proposal of activities for solving problems to produce strategic

information for decision makers in making or determining the policy / program. This

methodology, ranging from a clear vision so as to form a formulation of the problem. This

methodology is a cycle so that the process continues over time to achieve better results.

To develop a strategy to collect information two main areas (typologies) must be

concerned: formal information (secondary sources, scientific journals, reports, patents, )

and informal information (primary sources, human networks, meetings, etc..).

Figure II.1. The cycle of Competitive Intellegence


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II.2.2 Patents

Patent is a wide field, where techniques, products, applications and legal consideration are

strongly mixed. 6

Patents can only be provided upon request and each application can only be filed for an

invention or some invention that is a unity of invention.

One unity of invention referred to is some new invention that has a close relationship

inventive step, such an invention in the form of new stationery with the new ink, stationery

and ink is used as a single unit.

Patent application and simple patent filed with the Directorate General of Intellectual

Property in the Indonesian language or the Office of the Department of Justice and human

rights throughout Indonesia to pay the application fee. Matters relating to the application

must be completed are:

date, month and year of application; full address and address clearly Petitioner; full name and nationality of inventors; name and complete address of the power if the petition is filed by a special power

of attorney, in case the application is filed by;

statement can be given an application for patent; title of invention; claims contained in the invention; description of the invention, which is complete, contains information on how to

implement the invention; drawings referred to in the description necessary to clarify the invention; and abstract.

6 Dou Hendri Jean-Marie, Manulang Sri D, Competitive Intelligence, Technology Watch

and Regional Development, MUC Publishing, Jakarta, 2003.


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When meeting these requirements will be given a filing date (filing date) or fulfill some

requirements such as letters a, b, f, i, and j. If the request is accompanied by a picture, this

is called or known by the minimum requirements (minimum requirements) but other

requirements are also required under the provisions. Furthermore, it can be seen scheme

patent application for a certificate according to the law no. 14 of 2001.

Figure II. Procedure of Granting Patent (http://www.aj.co.id/chart_patent.html)
http://www.aj.co.id/chart_patent.htmlhttp://www.aj.co.id/chart_patent.html


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II.2.2.1 Matheo Patent

A new way developed by Prof. Hendri Dou, through computer software matheo

patent database as an analytical tool that allows to develop local commodities as new

products, is a way to be able to adopt technologies that can be applied to development inthe area as a local technology. Patent databases are a source of information that can

provide a reference of new products to be developed locally as a new technology. Use

of matheo patent database will provide information on commodities across the world

including North Sulawesi abstract form so that the information is important to leave to the

experts in producing new products and various kinds of correlations which consists of the

title, inventor, address, several things on keywords, summaries of research, the language

used, the type of documentation, date and country and institutional developers. There aremillions of documents that can be found in the database since 1965.

Figure II.3 Matheo Patent Software


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II.2.3 Benchmarking

Definitions that can be inferred about benchmarking is essentially learning

activities, sharing information and adopting best practices to bring change to the activities

in the field. In short, benchmarking can be regarded as an attempt to change themselves bylearning activities on the efforts of others. Some definitions can be concluded the

following:

Benchmarking as a system allows a company and institution or an individual toSome of Their activities compare with those of the best in class. Source: Hendrik

JM Dou by his paper on World Patent Information (2004) 297-309

Benchmarking is simply about making comparisons with other organizations andthen learning the lessons That those comparisons throw up. Source: The European

Benchmarking Code of Conduct

Benchmarking is the continuous process of measuring products, services and

practices against the toughest competitors or those companies Recognized as industry

leaders (best in class). Source: The Xerox Corporation 7 (calvin mamahit thesis

II.2.4 S.W.O.T Analisys

A SWOT analysis forces an objective analysis of a company's position via its

competitors and the marketplace. Simultaneously, an effective SWOT analysis will help

determine in which areas a company is succeeding, allowing it to allocate resources in such

a way as to maintain any dominant positions it may have. SWOT Analysis is a very

effective way of identifying your Strengths and Weaknesses, and of examining the

Opportunities and Threats you face. Carrying out an analysis using the SWOT framework

will help you to focus your activities into areas where you are strong, and where the

greatest opportunities lie.

7 Mamahit Calvin, OTEC DEVELOPMENT STRATEGY AS AN ALTERNATIVE ENERGY SOURCE IN

NORTH SULAWESI,Manado, 2009


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Figure II.4 SWOT diagram

Environmental factors internal to the firm usually can be classified as strenghts (S)

or weakness (W), and those external to the firm can be classified as opportunities (O) or

threats (T). The analysis is based on the logic that maximizes the strengths (strengths) and

opportunities (opportunities), but simultaneously to minimize the weakness (weakness) and

threats (threats). The process of making decisions are always associated with the

development of mission, goals, strategies, and organizational policies.

The SWOT analysis provides information that is helpful in matching the firms

resources and capabilities to the competitive enviroinment in which it operates. As such, it

is instrumental in strategi formulation and selection.

Figure II.5 SWOT Matrix / Template Analysis


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Here is the explanation in more detail:

StrengthsA firms strengths are its resources and capabilities that can be used as a basis for

developing a competitive advantage. Examples of such strengths include:

Patents

Strong brand names

Good reputation among customers

Cost advantages from proprietary know-how

Exclusive access to high grade natural resources

Favourable access to distribution networks

Figure II.6 Strength questions

WeaknessesThe absence of certain strengths may be viewed as a weakness. For example, each of

the following may be considered weaknesses:

Lack of patent protection

A weak brand name

Poor reputation among customers


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High cost structure

Lack ofaccess to the best natural resources

Lack of access to key distribution channels

In some cases, a weakness may be the flip side of a strength. Take the case in which

a firm has a large amount of manufacturing capacity. While this capacity may be

considered a strength that competitors do not share, it also may be considered a

weakness if the large investment in manufacturing capacity prevents the firm from

reacting quickly to changes in the strategic environment.

Figure II.7 Weakness questions

OpportunitiesThe external environmental analysis may reveal certain new opportunities for profit

and growth. Some examples of such opportunities include:

An unfulfilled customer need

Arrival of new technologies

Loosening of regulations

Removal of international trade barriers


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Figure II.8 Opportunity questions

ThreatsChanges in the external environmental also may present threats to the firm. Some

examples of such threats include :

Emergence of substitute products

New regulations

Increased trade barriers

Figure II.7 Threats questions

http://www.theaitgroup.com , Advanced Integrated Technologies Group, Inc, 2005


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II.2.4 TOWS matrix

TOWS matrix is in use advanced tools to develop four types

of options strategies: SO, WO, ST and WT. The key to successful use of the

TOWS matrix is to bring together the key internaland external factors to form a strategy.

The power of the TOWS matrix format is in the way it not only gives a review,

but also helps you create and summarise strategies to improve the market. Oftentimes

SWOT are put in the appendix of a report or on the shelf and do not drive action, but the

TOWs approach integrates the SWOT into the whole strategy process to help create a

plan.

Figure II.8. TOWS Matrix

SO strategies are strategies that are made by using the company's internal strengths to

take advantage of external opportunities.

WO strategies are strategies that are made to remedy deficiencies in the internal and

external use of the opportunity. WO also showed existing opportunities within the reply

can be achieved by the company if managed to fix internal weaknesses.

ST strategy is made to anticipate external threats by using an internal power possessed.


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WT strategies are possible, especially if the company is facing vulnerability factors and

threats who can not be dealt with using existing strengths and opportunities. Significantly,

the form of implementation of the WT strategy is merger, bankruptcy, restructuring, or

liquidation.

II.2.2 Porters Five Force

SWOT analysis is an analysis carried out prior

to designing strategic business plan. One of the tools used to create them

is SWOT Analysis Porter Five Forces analysis, which gives an idea of how to

position our business in an industry.Porter's Five Forces Analysis provides a powerful illustration of how the level of

competition from an industry, be it from the side of the supply chain (suppliers and

customers) and market (new entrants

and substitutes). Fourth of forces (push) it contributes to the

competitive rivalry or competition in the industry

Understanding the nature of each of these forces gives organizations the necessary

insights to enable them to formulate the appropriatestrategies to be successful in their

market. 8

Porters Model is considered an important part of planning tool set. When we clear

about where the power lies, you can take advantage of your strengths and can improve the

weaknesses and can compete efficiently and effectively.

These five competitive forces identified by the Michael Porter are:

1. Competitive Rivalry2. Threats of New Entrants3. Threats of Susbstitutes4. Power of Buyer5. Power Supplier
http://www.coursework4you.co.uk/essays-and-dissertations/general-business/corporate-strategy-theoretical-aspects/corporatestrategytheoreticalaspects.phphttp://www.coursework4you.co.uk/essays-and-dissertations/general-business/corporate-strategy-theoretical-aspects/corporatestrategytheoreticalaspects.php


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8 Thurlby B (1998), Competitive forces are also subject to change, London, 2008

Figure II.9. Porters Five Force diagram

1. Competitive RivalryRivals are competitors within an industry. Rivalry in the industry can be weak, with

few competitors that dont compete very aggressively. Or it can be intense, with

many competitors fighting in a cut-throat environment.

Factors affecting the intensity of rivalry are:

Number of firmsmore firms will lead to increased competition. Fixed costs with high fixed costs as a percentage of total cost, companies

must sell more products to cover those costs, increasing market competition.

Product differentiation Products that are relatively the same will competebased on price. Brand identification can reduce rivalry.

2. Threats of New EntrantsOne of the defining characteristics of competitive advantage is the industrys

barrier to entry. Industries with high barriers to entry are usually too expensive for

new firms to enter. Industries with low barriers to entry, are relatively cheap for new

firms to enter.


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The threat of new entrants rises as the barrier to entry is reduced in a

marketplace. As more firms enter a market, you will see rivalry increase, and

profitability will fall (theoretically) to the point where there is no incentive for new

firms to enter the industry. Here are some common barriers to entry:

Patents patented technology can be a huge barrier preventing other firmsfrom joining the market.

High cost of entry the more it will cost to get started in an industry, thehigher the barrier to entry.

Brand loyalty when brand loyalty is strong within an industry, it can bedifficult and expensive to enter the market with a new product.

3. Threats of SusbstitutesThis is probably the most overlooked, and therefore most damaging, element of

strategic decision making. Its imperative that business owners (us) not only look at

what the companys direct competitors are doing,but what other types of products

people could buy instead.

When switching costs (the costs a customer incurs to switch to a new product)

are low the threat of substitutes is high. As is the case when dealing with new

entrants, companies may aggressively price their products to keep people from

switching. When the threat of substitutes is high, profit margins will tend to be low.

4. Power of BuyerThere are two types of buyer power. The first is related to the customers price

sensitivity. If each brand of a product is similar to all the others, then the buyer will

base the purchase decision mainly on price. This will increase the competitive

rivalry, resulting in lower prices, and lower profitability.

The other type of buyer power relates to negotiating power. Larger buyers tend to

have more leverage with the firm, and can negotiate lower prices. When there are

many small buyers of a product, all other things remaining equal, the company

supplying the product will have higher prices and higher margins. Conversely, if a

company sells to a few large buyers, those buyers will have significant leverage to

negotiate better pricing.

Some factors affecting buyer power are:


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Size of buyerlarger buyers will have more power over suppliers. Number of buyerswhen there are a small number of buyers, they will

tend to have more power over suppliers. The Department of Defense is

an example of a single buyer with a lot of power over suppliers.

Purchase quantity When a customer purchases a large quantity of asuppliers output, it will exercise more power over the supplier.

5. Power SupplierBuyer power looks at the relative power a companys customers has over it.

When multiple suppliers are producing a commoditized product, the company will

make its purchase decision based mainly on price, which tends to lower costs. On the

other hand, if a single supplier is producing something the company has to have, the

company will have little leverage to negotiate a better price.

Size plays a factor here as well. If the company is much larger than its

suppliers, and purchases in large quantities, then the supplier will have very little

power to negotiate.

A few factors that determine supplier power include:

Supplier concentration The fewer the number of suppliers for a givenproduct, the more power they will have over the company.

Switching costssuppliers become more powerful as the cost to changeto another supplier increases.

Uniqueness of productsuppliers that produce products specifically fora company will have more power than commodity suppliers.

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(Competitive Intellegence on Flexi Manado ) (Bab 2)