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Competitive intelligence is the procedure whereby an organization or a business venture monitors the competitive environment. The process is systematic and mainly ethical in terms of gathering, managing and analyzing the data that can affect an organization’s operations, decisions and plans. It is thus vital for any organization wishing to obtain a competitive advantage to ensure that they hire the best companies that offer the services of market competitive intelligence. Competitive Intelligence is a necessity in any industry, and so much so, in a highly competitive hotel industry in Miami. Miami is said to be the birthplace of boutique hotels, and The Regency is one such. It is vital to have a full-time Revenue Manager with access to online tools. This paper is a Competitive Intelligence Solution that is being offered to Regency Hotel, Miami.
Introduction and Background
As in any and every industry, Competitive Intelligence is a key factor for the hospitality industry also. A good revenue manager would help the hotel to sell its rooms at the right price. An essential tool for the revenue manager to function effectively and do justice to the job role is Competitive Intelligence (CI.) The revenue manager needs to have a set of tools that give a smart analysis of the competitive landscape; historical and future looking data And, this is where sophisticated software comes in and assists the revenue manager in the job.
Regency Hotel, Miami, is an elegant and a casual, full-service boutique hotel situated close to the Miami International airport. Regency Hotel is in proximity to many Miami attractions like the Port of Miami, Coral Gables, South Beach, and Miami Beach among many other attractions. The differentiating factor of the Regency Hotel is that it offers personalized service, and attention to detail, attractive to all classes of travellers from the business executive to the casual traveller. Staffs are multi-lingual and available 24 hours a day to serve the ever discerning guest.
Miami’s hotel industry is very competitive, and the competitiveness continues to further increase, and there are a number of international brands also coming in. Miami is considered to be the birthplace of boutique hotels that laid importance on Art Deco architecture. Several brands from Asia and Latin America have come-in and the process of coming into Miami as a destination for international travellers. Other than international brands coming in, Miami is also experiencing accelerated growth with the revival of unique niche products and revived submarkets.
Statement of the Problem
There is a definite need for a competitive intelligence resource at the Hotel. The necessity for a revenue manager is fuelled by the fact that Miami is already an international global destination for both business and leisure travellers. The competition is already over heated. In this overheated market, there is now an influx of international brands from Asian origin. Some of them were already operational like the Mandarin Oriental in Brickell and the Setai in South Beach and several Latin American brands like Argentina’s Genoa Hotels, Fen Hotels, and Chile’s Atton Hotels are on their way in. To maintain growth, or in the least maintain the current market share, it is imperative that Hotel Regency Miami has full-fledged CI processes in place.
Product/service to purchase or create
In accordance to the in-depth analysis that was carried out on Regency Hotel, it is clear that the current problem that the hotel is facing require a well articulated and strategized solution that has the capacity of increasing the value of its operations. The most appropriate solution for Regency Hotel to adopt is outsourcing competitive intelligence services from a reputable provider such as Fuld and Company. It has been established that Fuld is one of the most effective service provider in relation to competitive and market intelligence, go-to-market strategy, and corporate strategic planning; with its services directed in a wide range of operative industries (Fuld and Company).
Competitive Intelligence is possibly one of the hottest trends that are currently evolving, and that is prompting the emergence of an increasing focus on the aspect of strategic marketing. Competitive intelligence essentially encompasses people, technology, and processes, which convert data in useful insights that might be helpful in effectively driving effective business decision making.
The main purpose of competitive intelligence program is to gather accurate and reliable information. The ground of the organization is to review the organizations operations and know about competitors and their operations, so competitive intelligence Audit is to be conducted. CI audit helps in knowing the organizations CI needs. Steps to conduct competitive intelligence:
Determining CI Research objectives
Depending upon the information obtained from research gaps in the information are filled, and necessary corrections are made.
Evaluation of existing CI data collection strategies
Once the information gaps and research objectives are determined the strategies for collecting data need to be refined.
Determine the CI data collection strategies
Evaluation of the existing data collection gives the points where development is needed.
Setup access and integration systems
CI plan needs to be designed in a manner which permits the proper access of the information and ensure consistent security processes.
Establish analysis and reporting processes
Data need to be analyzed and reported.
It requires in depth knowledge about the business cycles.
The famous and structured method of conducting competitive intelligence is SWOT analysis. It is used to organize the information and in decision making. SWOT stands for: Strengths: characteristics of the business unit at an advantage over others. Weaknesses: characteristics of the business at a disadvantage relative to others. Opportunities: Elements of the project that exploit to its advantage. Threats: Elements of the environment that cause a problem to the business.
Porter’s five forces of analysis is a frame work of analysis for business strategy and industrial strategy of development. The five forces are: 1. Threat of new entrants 2. Threat of substitute products or services 3. Bargaining power of customers 4. Bargaining power of suppliers 5. Intensity of competitive rivalry.
Boston consulting Group Analysis, popularly known as the BCG matrix is also called as growth-share matrix. It is used as an analytical tool in brand marketing, strategic management and portfolio analysis. The chart consists of Cash cows, Dogs, Question marks, Stars.
Structure conduct and performance Model - The performance of the organization depends upon the structured activities and the execution of the designed plan.
Competitive intelligence essentially involves the 4 Cs.
- “Collecting the information (with the first stage - deciding what to collect)
- Converting information into intelligence (with three steps: CIA -Collate and catalogue it, Integrate it with other pieces of information and Analyse and interpret it)
- Communicating the intelligence.
- Countering any adverse competitor actions - i.e. using the intelligence.”
Besides, the first step is to search for the secondary information sources. The secondary information source is the information that is already collected for other purpose. They help in providing information to the primary research stage. The different resources for CI are internet resource, information from books. Regular changing section on business humor is another resource. Many organizations fail as they miss obvious which is a blind spot, this blind spot can be illustrated by humor. Blog resource is published when something catches the attention which helps the competitive intelligence and management practices. Newsletter is published occasionally which gives up to Date information about the organization activities. Customer experience management technology takes market research to the front lines. Second screen behavior and advertising. Product and service update. Internet is one of the main resources for the competitive intelligence.
Schedule and Budget
In many business unit’s budget, scope, and schedule are more closely related. Any changes made to one of the constraint will affect the other three constraints and even influence the quality of the project. These three constraints are known as “Iron Triangle”. The quality of the projects outcome depends upon the way of delivery of the three constraints.
Schedule constraint refers to amount of time available to complete business. Budget constraint refers to amount of cost or budget amount available for the business. Scope refers to what to be done to produce the best results. Completion of the tasks depends upon number of factors such as number of people working on the project, experience, skills etc. Time plays a crucial role which is uncontrollable. Budget is essential for both project manager and organization. Budget ensures that project is developed or implemented on the certain cost. These constraints compete with each other; tight budget causes increase in schedule and reduced scope. The main idea of the project management is to provide tools and techniques which enable the managers to organize their work. Destruction in the iron triangle results in the following drawbacks:
- The project need to be cancelled without proper plan
- Late delivery and over budget
- Poor quality deliverance
- Under delivery
Depending upon the situation the iron triangle need to be made normal by varying elements such as the scope, schedule, resource, as well as other factors.
The better way to reduce the schedule is to reduce the critical path. To reduce the critical path the following are need to be considered:
1. Reduce the task duration
2. Fast track the schedule.
3. Crash the schedule: Add resources to fasten the task, and
4. Remove tasks that consume more time.
Optimizing the Budget
In many projects budget consists of resource costs: 1. cut the project scope so that very few tasks need resources 2. Ensure that rates and overtime are appropriate 3. Verify that all the resources fit the job 4. Replace the expensive resource with less expensive resource. In order to carry out Competitive intelligence audit project need to be managed properly for better results and successful outcome. A project undergoes six stages during its life cycle. They are:
1. Project definition: Defining the factors and objectives of the project
2. Project initiation: Planning before the project initiates
3. Planning: How the project needs to be executed. In this step iron triangle is required
4. Execution: Processing the work
5. Monitoring and controlling of project: Taking necessary measures so that the project runs smoothly
6. Resources needed to complete the project.
Development of Solutions
In determining the contents of the management reports, predominantly, the following are to be considered: comprehensiveness, exception reporting, and materiality. “Information and communication technology (ICT) enables the collection, analysis, and evaluation of data and the transfer of information from one point to another. Information flows in warehouses and supply chains are as fundamental as the physical flows of goods and materials. Such information flows occur not only internally in companies, but also between external supplies, contractors and customers (Emett, 2005).”
Adopting the Competitive Intelligence process that had been created by McGonagle and Vella (2012) is an imperative idea that incorporates five different phases within its operational and strategic positions of the hotel. It is evident that each of the phases is connected to the other by a constructive feedback loop that is believed to be efficient when it comes to service delivery. Some of the key phases that will be followed by the outsourced company will consist of the idea of determining the competitive intelligence needs, ensuring that the relevant raw data is collected appropriately, and evaluating and analyzing the collected raw data (Pellissier & Nenzhelele, 2013). The finished intelligence will then be communicated through the legalized and effective approaches and, finally, an appropriate action being undertaken for the objective of implementing the right decision for achievement of the desired success.
Many companies today are in the process of becoming internetworked global enterprises. Businesses are venturing into global markets for their products and services, using global production facilities to manufacture or assemble products, raising money in global capital markets and forming alliances with global partners. Moreover, they are also competing with global competitors from all over the globe.
Implementing these strategic changes would be nearly impossible without the Internet, intranets and other telecommunication networks, which form the central nervous system of today’s global companies. Global companies operate in a competitive environment in which internetworked computer systems make possible the creation of a virtual global market that can instantly and economically process business transactions. This has, in turn, led to an improvement both in the quality and productivity of goods and services.
AQUTE Intelligence. (2013). Competitive Intelligence Case Studies. Retrieved from AQUTE Intelligence: http://www.aqute.com/competitive-intelligence-case-studies
AWARE. (2014). The Basic Principles of Competitive Intelligence. Retrieved from AWARE: http://www.marketing-intelligence.co.uk/resources/competitor-analysis.htm
Bose, R. (2008). Competitive Intelligence Process and Tools for Intelligence Analysis. Industrial Management & Data Systems, 108(4), 510-528.
Emett, S. (2005). Excellence in Warehouse Management. West Sussex, England: John Wiley & Sons.
The Regency Hotel. (2014). Regency Hotel Miami - Regency Hotel. Retrieved from Regency Hotel Miami: http://www.regencyhotelmiami.com