COMPANIES adapting to a strong competitive environment are likely to outsource the analysis of competitor activities.
Competitive intelligence outsourcing, as it is also called, enables companies to base their decisions on knowledge of other players in their market.
"Although, so far, only a few Slovak firms make their decisions based on a systematic monitoring and perfect knowledge of their environment, the situation is gradually changing," said Pavol Kopec, director of consulting company MARKETIN Consulting & Services.
According to Kopec, "with the date of Slovakia's accession to the European Union nearing, the number of such companies is increasing. At the same time, an interest in the analysis and research of competitors is growing [among businesses]."
Competitive intelligence outsourcing is mostly used by firms acting in sectors going through dynamic changes and by companies working with "virtual teams".
"Often there are companies with many subsidiaries that use a flexible communication network of conference talks, internet, or other technologies," explained Kopec.
Firms also find outsourcing to be an appropriate solution in periods marked by layoffs, when they cannot afford to hire a new employee to analyse the competitive environment. In other cases, a company intends to create such a working position but it wants to test its effectiveness first using an external expert.
Companies use such analysis to learn their actual position in the market and catch any signals of likely positive or negative changes. That information helps them plan their further development, adopt strategies, and prepare for competitors' decisions.
Competitive intelligence is based on ongoing research and analysis of competitive strengths in an industry. Thanks to regular reporting, a company's management can get a clear picture of the market situation and likely future developments.
It is a company's decision whether or not to outsource the analysis of the competitive environment services. On one hand, specialised external agencies can be more flexible, have a professional team, and the company that uses their services can take advantage of the newest methods of collecting and analysing information.
On the other hand, an internal employee has better contacts with the company's management and can better detect key internal company problems or trends in a certain industry.
"Many managers, even in Slovakia, have begun to realise that managing a firm only by intuition is not enough. One of the basic conditions [of success] is a perfect knowledge of the competitive environment," said Kopec.
20. Oct 2003 at 0:00 | Marta Ďurianová