As the world business becomes more competitive, companies are forced to adopt the new technologies that can help in improving the quality of their products. Competitive Intelligence is important in business as it provides very strategic ideas on how a company can improve its success. The company’s Competitive Intelligence gives it a very strategic vision that calls for the implementation of the changes in the business processes, the organizational and managerial systems, and the products (Bloom, 1997). For any positive change to be realized in a company, CI must be the requirement. The implementation of such changes calls for very effective Information Systems (Fleisher, 2003).
Competitive intelligence is used by various organizations as a tool for comparison with other organizations (Dratler, 1989). At the same time, it helps in identifying the opportunities and risks in the markets. It also tests the organizational plans against the market response (Gilad, 2001). This helps in the making of proper informed decisions. Once a firm has realized how the industry changes and what their competitors do, it can evaluate its strengths, weakness, and make proper adjustments (Sharp, 2000). In this work, I have discussed the effective use of CI in Japanese and U.S business organizations, how effectively they’ve identified the strategic problems, opportunities, and how they implement the changes.
According to the Competitive Intelligence Foundation, 2008; the economy of Japan is currently faced with a very competitive global environment. See the graphs in the appendix. This has propagated the recognition and use of Competitive Intelligence as the most essential means of improving the competitive nature of Japan in the global market and in formulating new strategies that are competitive in nature.
From various research findings, U.S companies effectively provide Information System support for change in businesses while the Japanese counterpart is currently very effective in Competitive Intelligence activities (Kahaner, 1996). The exponential increase in business competition has compelled the US managers to realize the importance of innovation in business, unlike the Japanese managers whose driving force is innovation (Mansfield, 1988).
After World War II, the Japanese economy was very much devastated. However, the hardworking culture of the Japanese and the great technology employed in the Japanese manufacturing industry has made the economy to grow to a level of the World’s second (Burrell, 1989). This hardworking culture is lacking in USA. Nevertheless, the US culture highly promotes the Information System support for businesses while that of Japan promotes information gathering. The culture of information gathering has propelled the use of CI and has directly contributed to the vast innovations and developments in the Japanese technology (Moritani, 1982).
The American business culture is focused on strategic intelligence. The American firms look at the long-term issues that affect their competitiveness over a given duration of time (Skyrme, 1989). This generally depends on the nature of a given industry and the rate at which the industry changes. The main question that most American firms ask is “which risks and opportunities are facing us?” (Gilad, 2001). On the other hand, the Japanese firms ask “what must we do so as to remain at the top?” (Gilad, 2008). This brings the difference in CI use in the two countries. Japan concentrates on the future plans with an assumption that the market remains unchanged. U.S, on the other hand, considers the past trends, the current, and the emerging threats (McCraw, 1988). This gives it a stable ground for planning into the future. As the America focuses on Strategic intelligence, Japan focuses on Tactical Intelligence (Blenkhorn and Fleisher, 2005). Tactical intelligence is designed majorly for short-term decisions. Japanese firms have spent a lot of time and effort on their old competitors without evaluating the existence of new ones like China. This has posed the greatest threat to the Japanese economy and its position as the world’s second is being overtaken (Gilad, 2008).
According to Competitive Intelligence Foundation, 2006; American companies rely mostly on the internet as the main source of information. This has made it easier for them to gather information on their competitors. However, there is much more than just the internet. The information from the internet bears a great risk of misleading the users. Japanese firms gather their information from primary research which includes conferences, trade shows, networking with experts in the industries, and the information from the customers (Guimaraes, Sato, and Kitanaka, 1999).
Competitive Intelligence is of national interest in United States and the government has established research firms e.g. Fuld & Company Inc. Such firms give proper advice to the American manufacturing industry on the nature of the market and the competition level (Fleisher, 2003). This has given the US companies an advantage over their Japanese counterparts.
The American history gives its companies a very good approach towards competitive intelligence. Many countries believe that CI is about spying on the competitor; they have associated it with the military and political intelligence that was used during the cold war (Comai and Tena, 2007). Many still believe that CI uses unethical means to collect information related to the competitors (Prescott, 1999). However, this is not true in America and in the current business environment. CI is meant to provide a link between the business decisions, strategies, and the information. This is what both Japan and USA are implementing and is the reason why they are the market leaders (Prestowitz, 1988). In both countries, there is high level of awareness on Competitive Intelligence. However, in Prestowitz book, Trading Places: How We Allowed Japan to Take the Lead, the use of CI is great in Japan as a result of the Japanese government and the information gathering culture. In both Japan and USA, there is a well established Society of Competitive Intelligence Professionals (SCIP) which is committed in development, improvement, and encouragement of the techniques, methods, and ethical principles of individuals and organizations. According to SCIP, competitive intelligence combines both the legal and ethical analysis of information. SCIP has promoted the level of awareness in America and Japan.
1. Blenkhorn, D. and Fleisher, C.S. (2003). “Teaching CI to three diverse groups: Undergraduates, MBAs, and Executives”, Competitive Intelligence Magazine, 6(4), 17-20.
2. Blenkhorn, D. and Fleisher, C.S. (2005). Competitive Intelligence and Global Business. Westport, CT: Praeger
3. Bloom, J.L. (1997). “Japan as a Model for a National Approach,” pp.49-95 in W.B. Ashton and R.A. Klavans. [eds.] Keeping Abreast of Science and Technology: Technical Intelligence for Business. Columbus, OH: Battelle Press.
4. Burrell, G. (1989). “Japan vs. USA: A Comparison of Corporate Environments and Characteristics,” Human Systems Management 8(2): 167-183.
5. Comai, A and Tena, J (2007). “Early Warning Systems for your Competitive Landscape”, Competitive Intelligence Magazine, 10(3), May-June.
6. Competitive Intelligence Foundation (2006). Competitive Intelligence Ethics: Navigating the Gray Zone. Fehringer D. and Hohhof, B.[Eds], Alexandria, VA: Competitive Intelligence Foundation
7. Dollinger, M. (1988). “Confucian Ethics and Japanese Management Practices,” Journal of Business Ethics 7(8): 575-584.
8. Dratler, J. Jr. (1989). “Trade Secrets in the United States and Japan: A Comparison and Prognosis,” Yale Journal of International Law 14(1): 68-117.
9. Fleisher, C.S. (2003). "Competitive Intelligence Education: Competencies, Sources and Trends," Information Management Journal, March/April, 56-62.
10. Fleisher, Craig S. and Babette E (2007). Business and Competitive Analysis: Effective Application of New and Classic Methods, FT Press
11. Fuld, Leonard M (1985) Competitor Intelligence: How to Get It, How to Use It. NY: Wiley
12. Gilad, B (2001). “Industry Risk Management: CI's Next Step”, Competitive Intelligence Magazine, 4 (3), May-June.
13. Gilad, B (2003) Early Warning. NY: American Management Association.
14. Gilad, B (2006). “Early Warning Revisited”, Competitive Intelligence Magazine, 9(2), March-April.
15. Gilad, B (2008). “The Future of Competitive Intelligence: Contest for the Profession's Soul”, Competitive Intelligence Magazine, 11(5), 22
16. Gilad, B and Jan, H (2001). “CI Certification - Do We Need It?” Competitive Intelligence Magazine, 4(2), 28-31.
17. Guimaraes, T., Sato, O, and H. Kitanaka. (1999). "Comparing U.S. and Japanese Companies on Competitive Intelligence, IS Support, and Business Change," Journal of Global Information Management 7(3): 41-49.
18. Hansen, J.H. (1996). Japanese Intelligence: The Competitive Edge. Washington, DC: NIBC Press
19. Harper, S. (1988). “Now that the Dust has Settled: Learning from Japanese Management,” Business Horizons 31(4): 43-51.
20. Hasegawa, K. (1986). Japanese-style Management: An Insider’s Analysis. Tokyo, Japan: Kodansha International.
21. Herring, J.P. (1989). “The Government Role in Japanese Competitive Intelligence,” The Competitive Intelligencer 3(4): 2, 12-13.
22. Kahaner, L. (1996). Competitive Intelligence: From Black Ops to Boardrooms – How Businesses Gather, Analyze, and Use Information to Succeed in the Global Marketplace. New York, NY: Simon & Schuster.
23. Kalil, T. A. (1993). “Japan: US Government Information on Japanese Technology: Where to Find It,” Competitive Intelligence Review 3(3,4): 82-84.
24. Kobayashi, N. (1988). “Strategic Alliances with Japanese Firms,” Long Range Planning 21(2): 29-34.
25. Kotler, M. (1988). “Beyond the Language Barrier: Access to Japan,” Competitive Intelligencer 2(4): 3.
26. Mansfield, E. (1988). “Industrial R&D in Japan and in the U.S.” American Economic Review 78(2): 223-228.
27. McCraw, T. (1988). America vs. Japan: A Comparative Study. Cambridge, MA: Harvard Business.
28. Moritani, M. (1982). Japanese Technology: Getting the Best for the Least. Tokyo, Japan: Simul Press.
29. Nagarajan, N.J. (1992). "The Role of Cost Information in Competitive Strategy: A Comparison of U.S. and Japanese Approaches," Competitive Intelligence Review 2(3): 20-22.
30. Owen, J. (1990). "Competitive Intelligence Gathering in Japan: Lessons From the Japanese," Competitive Intelligence Review 1(1): 26.
31. Prescott, J. (1999). "Debunking the Academic Abstinence Myth of Competitive Intelligence," Competitive Intelligence Magazine, 2(4).
32. Prestowitz, C. (1988). Trading Places: How We Allowed Japan to Take the Lead. New York, NY: Basic Books.
33. Ryans, A. (1988). “Strategic Market Entry Factors and Market Share Achievement of Japan,” Journal of International Business Studies 19(3): 389-409.
34. Sharp, S. (2000). “Truth or Consequences: 10 Myths that Cripple Competitive Intelligence”, Competitive Intelligence Magazine, 3(1), 37-40.
35. Shibota, S. (1988). “A Human Face: The Secret of Japanese Market Success,” Tokyo Business Today (May): 24-25.
36. Sigurdson, J. (1988). “Japan’s Pursuit of Knowledge: Reversing the Flow of Information,” in J. Annerstedt and A. Jamison. [eds.] From Research Policy to Social Intelligence. New York, NY: MacMillan.
37. Sigurdson, J. (1993). “The Abundance of Japanese Scientific and Technological Information and the Lack of Intelligence: The Case of the LCD Industry in the U.S.,” pp.121-128 in J.E. Prescott and P.T. Gibbons [eds.] Global Perspectives on Competitive Intelligence. Alexandria, VA: Society of Competitive Intelligence Professionals.
38. Skyrme, D.J. (1989). "The Planning and Marketing of the Market Intelligence Function," Marketing Intelligence and Planning, 7(1/2), 5-10.
39. Stein, M.H. (1993). “What U.S. Corporations Should Do to Enhance Their Competitiveness with Japan,” pp.385-388 in J.E. Prescott and P.T. Gibbons [eds.] Global Perspectives on Competitive Intelligence. Alexandria, VA: Society of Competitive Intelligence Professionals.
40. Sugawara, T. (1998). "Capturing the Market with Strategic Information Tools: How Japanese Companies are Winning Market Share," Competitive Intelligence Review 9(2): 40-45.
41. Tashiro, H. (1997). "The Japanese Investigative Industry: Toward the Year 2000,” Competitive Intelligence Review 8(2): 58-62.