By Chris West (auth.)
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Accountancy is far more of an art than a science and even the competitors themselves will employ different conventions when accounting for their performance, depending on what they are trying to prove. There are of course some facts that cannot be easily distorted and that are worth having. Legitimate targets can include the prices paid by competitors for their raw materials or their energy, wage levels, other (non-wage) costs of employment, manning levels, production efficiencies, selling and marketing costs and outsourcing costs, all of which can provide important insight into subsidiary or divisional profitability, but no amount of analysis will provide some of the key items, such as depreciation charges, that would permit the construction of an accurate P&L.
2 This was accompanied by a short flirtation with marketing warfare which focused on beating the competition by adopting military tactics. Although marketing warfare was great fun it was rarely practical. Many of the analogies were stretched far too much to be really useful. Nevertheless, business school courses and external training programmes have led to greater awareness of the elements of competitive strategies and have heightened the need for intelligence on which they can be based. They are also increasing the supply of analysts that can use the data.
When existing or new competitors have launched an initiative that appears to be successful . When competitors appear to be using superior technologies, achieving higher levels of productivity or performing better financially Companies that use competitive intelligence only as a source of inspiration tend to be followers rather than leaders, content with the fact that they will be second to market with innovations and lagging in the performance race, but they are nevertheless benefiting from the knowledge gained by their competitors and leveraging their own skills and resources.