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Strategic and Tactical Competitive Intelligence for Sales and Marketing

  • ID: 42812
  • Report
  • May 1999
  • 83 pages
  • American Productivity & Quality Center, APQC
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High-level executives need and request specific strategically focused information from the competitive intelligence (CI) function. At the same time, professionals in functional units such as sales and marketing need and request tactical information to assist in business development and customer problem solving. So how do CI groups provide both effectively? As the use of competitive intelligence increases within organizations, tailoring CI products to a user’s needs becomes more important. To be effective, CI must be analyzed, interpreted, and communicated with the decision-making purposes of the end user in mind. For this to occur, CI practitioners must understand the differences in specific CI needs, organizational goals, and the nature of decisions that result from their firms’ organizational hierarchies.

This study sought to uncover what companies are doing to
maximize the effectiveness of competitive intelligence provided to sales and marketing personnel, including:
- understanding effective CI organizational structures;
- gathering, sharing, and facilitating the flow of CI knowledge across the
organization and between hierarchical levels;
- coordinating strategic and tactical CI needs, intelligence, and knowledge; and
- measuring CI results as they apply to the firm and the sales and marketing functions.

It is important to understand the differences between strategic and tactical CI. Strategic intelligence is future-oriented and allows an organization to make informed decisions concerning future conditions in the marketplace and/or industry. It also helps decision makers discern the future direction of the organization. Ultimately, over time, strategic intelligence facilitates significant organizational learning. Tactical intelligence is present-oriented. This level of intelligence provides organizational decision makers with the information necessary to monitor changes in the company’s current environment and proactively helps them search for new opportunities. Tactical intelligence is real time in nature and provides analysis of immediate competitive conditions.

To maximize the potential benefit of CI, the strategic and tactical levels must be coordinated. Hierarchically based goals and differentiated performance objectives can produce inconsistent CI needs and activities. However, a congruence between each of the hierarchical levels and the CI process itself must be established and maintained for the organization to realize the maximum benefit from the CI process and achieve competitive advantage in the marketplace. This congruence does not necessarily occur based on the mere existence and use of a CI process. To achieve this congruence, the CI process needs specific structural and motivational mechanisms to facilitate collaboration and unity of effort. This report explores a variety of mechanisms to see how they align with goals, activities, and outcomes.

Effective CI organizations maintain strong links with the sales and marketing
functions not only to provide CI to those functions but also to gather intelligence. The sales function of an organization often provides a rich pool of information because it is a primary interface with the firm’s competitive market (e.g., customers, competitors, suppliers, and distributors). This interface allows for the continuous collection of “human” competitive information. The continuous use of CI from primary sources provides an organization with dynamic stocks of knowledge as opposed to more filtered, static public and secondary sources. A practitioner’s ability to access these professionals can increase the richness of intelligence provided to the rest of the organization. CI practitioners can also act as a clearinghouse for information exchange with these functions.

The development and use of an effective CI process in the sales and marketing
functions leads to the enhanced development of decision-making capabilities. This increases the speed and quality of decision making and the accuracy of strategic and tactical decisions. As the marketplace becomes increasingly complex, an organization’s proximity to its customers and its ability to detect, interpret, and respond to competitive conditions (e.g., competitive moves, customer needs, and marketplace dynamics) will lead to a sustainable competitive advantage.

STUDY SCOPE

The study scope is summarized below. During the study, these key areas were
addressed in the quantitative and qualitative data collection tools.
Organizational Structure
- Defining the formal structural and operational links among the sales and marketing functions, the competitive intelligence unit, and the CI users
- Handling and prioritizing requests for CI
- Integrating CI into the company’s store of knowledge
CI Knowledge in Sales and Marketing
- Gathering competitive information from the sales and marketing functions
- Sharing CI with the sales and marketing functions

- Leveraging competitive knowledge within an organization
- Facilitating the flow of CI throughout the organization
- Selecting technology that supports sales and marketing CI needs
Strategic vs. Tactical CI
- Delineating the differences between strategic and tactical intelligence
- Designing a CI process to coordinate strategic and tactical intelligence
- Managing a CI process within the sales function of organizations to facilitate the coordination of business strategies and tactics
Measuring Results
- Monitoring CI sales and marketing performance
- Determining the impact of CI in sales
- Identifying techniques of coordinating strategic and tactical decisions

KEY FINDINGS

Following are the key findings of this study, which will be explored in detail
throughout the remainder of the report.

1. Best-practice companies have organized formal and quasi-formal (informal)
processes that facilitate the coordination of strategic and tactical intelligence in the sales and marketing functions.

2. The “TAP IN” process, created during this study, shows that the coordination of strategic and tactical intelligence in the sales and marketing functions is facilitated through sophisticated coordinating mechanisms such as teams, CI human resource allocation, the planning process, interaction, and networks.

2a. Teams: Organizational processes are enabled and managed by teams and
information technology.
2b. Allocation: CI human resources are explicitly designated to strategic and tactical activities through job design.
2c. Planning: CI input is embedded in the strategic planning process.
2d. Interaction: The primary and preferred method of communication is dialogue.
2e. Networks: The establishment and use of internal and external networks is expected and reinforced.

3. CI products and services are created and used to encourage a two-way flow between the CI team and the sales and marketing functions. This two-way flow facilitates the coordination of strategic and tactical intelligence.

4. Identifying and understanding the impact of various external conditions is important to creating effective CI processes that enable the coordination of strategic and tactical intelligence in the sales and marketing functions.

5. Establishing effective coordination in the sales and marketing functions involves focusing on key process improvement areas.
5a. Measuring Outcomes: Key outcome measures must be designed to evaluate the
quality and effectiveness of CI content and CI processes. Key quantitative and
qualitative measures should be well defined and used to foster continuous
improvement of the CI process.
5b. Sales Function and Marketing Function Linkage: Developing tight communication and other operational linkages between the sales and marketing functions based on the firm’s scope of activities in the industry value chain can lead to a coordination advantage.
5c. Coordination Across the Strategic and Tactical Hierarchy Within the Sales and Marketing Functions: The effective two-way flow of information, objectives, and issues across levels within the hierarchy leads to unity of purpose.

METHODOLOGY

Benchmarking is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help another organization improve performance. Companies participating in benchmarking activities report breakthrough improvements by directly and indirectly improving cost control, quality, cycle time, and profits. The staff used its benchmarking model, as described below, to conduct this consortium benchmarking study. Sponsors directed the scope, selected partner companies to site visit, and financially supported the study.

Phase 1: Planning
Phase 2: Collecting
Phase 3: Analyzing and Reporting
Phase 4: Adapting
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- Sponsor and Partner Companies

A listing of the sponsor companies in this study, as well as the best-practice (“partner”) companies that were benchmarked for their innovation and advancement in the use of strategic and tactical competitive intelligence for their sales and marketing functions.

- Executive Summary

A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.

- Introduction

An overview of the organizational structure and the scope of competitive intelligence activities at the partner companies, as well as the relationship between the sales and marketing functions.

- Key Findings

An in-depth look at the 13 key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the partner companies.

- Partner Company Profiles

Background information on the partner companies, as well as their innovative competitive intelligence practices.
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