Pros and Cons Gathering and Assimilating Competitive Intelligence

Its cheap.

If a company or department does not have a budget for competitive intelligence then the easiest way to get information on our competitors is to do the research our self, or have a staff member get it and also leveraging the resources that have available and, in some cases, that may be only option.

Its fast usually. Browsing a competitors website and reading through their quarterly reports does not take long. With a little practice and perseverance you can put together a very high level snapshot of a competitor in less than a day. Thats pretty fast. One pitfall to avoid here is what we call the rabbit trail. It is very easy to get so caught up in following every little twist and turn. every subtle hint of information, that before you know it you look up at the clock and realize you have just spent an entire day Googling a competitor and all you have to show for it is 120 bookmarks and a lot of disconnected bits of data. This is not intelligence and is seldom helpful for planning strategy.

Its better than nothingusually.

Knowing a little about the competition is better than nothing at all. Trying to run a business without knowing the competition is just plain dumb. If nothing else, this overview will help to identify the knowledge gaps, facilitating more efficient follow-on research.

Limited Information. What happens when we cant find the information you want through Google? What if the competitor does not publish their price list? What if their quarterly report does not say when they plan to open the new plant or how big it will be?

Its unethical. People often tell me how they just called their competitor and pretended to be a customer. To some this might just sound resourceful or shrewd, but by claiming to be someone that are not for the purpose of gathering information, which is the fact is putting our self and our company at risk of being sued, or worse, prosecuted. So what does this mean? It means that a company conducting competitive intelligence internally should limit itself to secondary research.

Lack of expertise.

It is one thing to spend a day Googling of competition and building a nice little PowerPoint deck for your boss that provides an overview of your competition, but how useful is that? Believe it or not, there are big, multinational companies that make game-changing strategic decisions based on little more than the PowerPoint overview that have just described. Competitive Intelligence is limited by the expertise of the individual doing the research and the means that they have to gather the information.

Using Porters Five-Force Model, explain competitiveness for a local fast food restaurant.

From the Porters Competitive Model, we can see that: 1) The threat of new competitors The first KFC restaurant was opened in 1973 at Jalan Tunku Abdul Rahman. Today there are more than 390 KFC Restaurants nationwide and still counting. Mc Donalds can be considered as a new threat for KFC. Since the first Mc Donalds restaurant has been opened in 1982 at Jalan Bukit Bintang, Kuala Lumpur, Mc Donalds has been one of the biggest KFCs rival in Malaysia. Mc Donalds does not only sell burgers but Mc Donalds also has been developing Ayam Goreng McD to compete with KFCs fried chicken. In fact these days, Mc Donald's has far more developed than KFC. We can see that through the products that Mc Donald's has produced compared to KFC. Recently Mc Donald's has created more products. Creatively, they do create new ones and in the mean times they maintain and improve their current products. And Mc Donald's use the current popular movies and give free toys based on the characters of the movie and people can get that when they buy the "Happy Meal". KFC too, do gives toys. But somehow they don't connect the toys with the most current popular movie on the cinema. And they updated the new toys less frequently compared to Mc Donald's. This sum up that Mc Donald's is the new competitors for KFC.

2) The bargaining power of supplier After some research through the internet, we found out that KFC was having some issues with their raw chicken supplier in somewhere around 2004. The supplier had done something horrible while slaughtering the chickens and forcing KFC to terminate the supplying from the accused supplier and find another supplier for raw chickens. This shows that the bargaining power for KFC is high since they can get another supplier than the supplier that they used to have business with. We also found out that KFC used to be under Pepsi.co. And they have some kind of contracts in order for KFC to not to have any business with other carbonated drinks company such as coca-cola and so on. And in the mean time too, Pepsi do supplies products to KFC's main competitors. All of this is slowing down KFC's bargaining power of supplier.

3) The bargaining power of customers (buyers) The bargaining power of customers is high considering that they have lots of choices to be made. As mentioned above, the existent of other fast food restaurants do increase the bargaining power of customers. Customers can go to any fast foods restaurant that offered more affordable prices especially for students like us. As we mentioned above, Mc Donald's has been developing products such as "Ayam Goreng McD" to compete with KFC. Some of us might think that KFC's chicken is far more good compared to Mc D's but some might not. And KFC to has been developing products that can compete with McD's product. This shows how healthy the competition between these companies are going on and how it will increase the bargaining power of customers.

4) The threat of substitute products and services As we all already know, the main product for KFC is obviously the fried chicken. Fried chicken is the earliest recipes that been developed in 1930 by Colonel Harland Sanders. And recently in Malaysia, new products have been developed rapidly by the KFC owner in Malaysia. In example, the Kentucky Nuggets is the substitute product developed by KFC Malaysia and can be considered as the substitute product that has been a threat to the fried chicken.

5) The rivalry among existing firms in the industry A&W is the first fast food from the United States that has set foots in Malaysia. Though A&W is not a famous fast food in Malaysia, it also can be considered as one of KFC biggest existing rival in Malaysia. The very first A&W is opened in Batu Road, Kuala Lumpur which is now known as Jalan Tunku Abdul Rahman. KFC and A&W has been competing since the opening of KFC first outlet in Malaysia and has as the consequences of that, A&W had a declining business era from 1997-2000.

External Factor Evaluation (E.F.E) Matrix