General Overview
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.
The Differences
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.
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