Doing business in a globalized economy has continually been faced with the challenges of strong brands, which limits the new entrants in the market to make meaningful progress. In recent, companies have been restructuring their model of operations, to override the rivals in the same field of activity. One of the most affected areas is the organizations that specialize in food products, where significant transitions have happened. Among them is the proliferation of technology, where the retailers can sell online without necessary opening new premises (Hasan et al., 2011, p.60). Such, diversification in the ways of operation is sometimes costly since continued change makes the management to utilize the money to sustain in the market, rather than focusing on improving the quality of the products to attract more customers.
To understand the nature of the market and deal with the forces of the economy, it’s essential to have an insight into competitive intelligence. Amit and Shoemaker 1993, p.42 defines it) as the process of gathering, analyzing and distributing the information regarding the product, customers, suppliers, competitors, and other external environmental factors. The main purpose of this competitive intelligence is to make the management aware, of the possible challenges and opportunities that a business would face in the future. Research conducted by Hoffman (2006, p411) affirmed that most of the multinational companies such as Amazon and others have been able to establish and command the international market, due to the understanding of all stakeholders involved in its operations. Further, he noted that the management of such organizations could plan and project the occurrences which help them to mitigate the risks of being overthrown from the market.The intelligence of the market is paramount in making strategies that are needed to keep the business live and competitive enough to sustain the shakes of the preferred brands.
To understand the topic in-depth, this paper will take a deep analysis of Aballu Artisan Chocolatier. The idea of this company started in the year 1988, from making the Christmas chocolate gifts, where a large pool of customers got interested with the quality of the products that were offered at their doorsteps (Anica and Cucui 2009, p.332). Jo Edwards, who is the CEO and the founder of the brand had extensive knowledge of making chocolates, which resulted inan increased number of clients demanding for them. In the year 2006, he came up with the brand ‘Aballu Artisan Chocolatier’ which specialized in flavors and products such as pizza, chocolates among others. Located in Rossett, Wrexham, the company has continued to grow over time, and according to Directory of Welsh Businesses (2018), the company recorded a return of less than under £250k and was estimated to have about five employees. The information designates that the company is small, and the possibility of growth in a competitive market occupied by the large companies such as Wickedly Welsh Chocolate Company, ChocolateFusion, Choco Dragon among others, requires accurate and workable strategies. As a consequence, competitive intelligence is paramount for Aballu Artisan Chocolatier, to have a clear understanding of the nature of the market they operate in and how they can improve the internal structure to withstand the market dynamics.
Competitive intelligence and its importance for Aballu Artisan Chocolatier
According to Viviers et al. (2005, p.578), he asserted that competitiveintelligence is the systematic and ethical way of gathering and analyzing the external information. These data aim to enhance knowledge regarding the market, which Huster (2005, p.15) classifies it as a subset of knowledge management. Further, he noted that the topic is different from industrial espionage since the information can be gotten from the public, without the need of seeking approval from any authority. Such, the sources that are widely used to extract such information are online and primary sources. To get the right information, the company engages the people, who are in direct contact with the competitors and they include customers, employee, and suppliers, who have an extensive understanding of what the other companies do in the market. Therefore, a startup company can invest in knowledge, and expand slowly. According to Marin and Poulter (2004, p.173), he conducted a meta-analysis of the reasons the new entrants find it hard to survive in a competitive market. One of the reasons he noted was that a considerable number of the latest companies never conducted market research, to cognize the competitors and the demands of the customers. In such a case, they ended up offering products or services, which they had no surety of their consumption trend. The secret of a workable competitive intelligence is knowing where to get the information and at what time, how to obtain the same without altering or tainting the brand of the competitors, and finally how to interpret the data to enhance coherency with the internal strategies of a business (Wanderley 1999, p.197).
Moreover, competitive intelligence is a sequence, that follows a particular pattern; otherwise, an organization might fail to achieve the predestined objectives. As illustrated in the previous paragraph, the entire process begins with defining the needs of the customers and evaluating the financial muzzle of the company. It is followed by gathering the information from the primary sources, and later processing. At this stage, the responses are subjected to logical analysis, where the expert reviews and evaluate the effectiveness of the information collected from the field. The final results are communicated to the relevant groups of people, and it could be the marketing team, finance department, customers among others, with the sole purpose of improving the performance of the company. The figure below illustrates the full cycle of competitive intelligence (Wright and Calof 2006, p.460).
Figure 1: Wright and Calof(2006,p.460)
Importance of Competitive intelligence to Aballu Artisan Chocolatier
According to Rouach and Santi (2001, p.557), confectionery business in Wales is highly competitive, attributed to by the new entrants that are coming up with the most innovative ways of studying the customers. More than before, the companies are resorting to utilizing modern technologies such as Google analytics to understand the trends of the customers. Also, the use of powerful marketing tools keeps their brands high, hence the most aggressive sustains in this market. Aballu Artisan Chocolatier, as a small company that is finding new customers and trying to expand its operations,can leverage competitive intelligence to address the most pressing demands of the economy they operate in. One of the importance of using the tool is discovering new competitors and attract new customers (Strauss and Du Toit 2010, p.312). With an average return of £250k, a way to extend the profit could be to invest in less costly strategies of evaluating what the competitors do better than them. The venture is less expensive because the management could invest in cheaper methods such as online surveys, or deploying the experts in the field to explore the flow of products in the nearby retailers. Furthermore, the feedback from the existing customers serves a good lead in establishing what the consumers require, hence improve the quality of their products based on guided information. According to Tao and Prescott (2000, p.73), the modern customer is more informed and takes steps of understanding how the product was made. He noted that consumers are much concerned about their health rather than the price, which could be a strong selling point for a small company. This among others are some of the information that can only be revealed through conducting an in-depth evaluation of the customers’ feedback.
In the same vein, the company can benefit from the identification of new technologies that would help its business to grow faster. The modern technology is revolutionizing the way things were done sometime before. Due to the opportunities presented in other states, especially the developing worlds, companies are diversifying their operations beyond their origin states (Teo and Choo 2001, p.67). Some of these new countries present vast possibilities of growth, something that Aballu Artisan Chocolatier is lacking. For example, the company does not utilize SEO marketing, which is becoming a huge platform for most of the companies. Also, they require ERP system, that can consolidate the operation of the company, customers’ feedback and suppliers’ information in one database, which essentially helps the management to make strategic decisions (Zha and Chen 2009 p.235). With good competitive intelligence, the company would remain aware of such changes, and implement accordingly. Wright and Calof (2006, p461) noted that the pressure to internally disrupt the systems of a company emanate from the external environment. He continues to affirm that any organization that ignores the market forces lags in terms of development and might be faced off the market.
Furthermore, another importance is that Aballu Artisan Chocolatier can avoid pitfalls. Strong brands remain complacent in identifying the areas in which they can fail because they secure the highest market share (Hoffman 2006, p.410). However, with the changes in the market happening rapidly, losing the customers loyalty is part of the system. The startups such as the company under consideration stand at the best position to learn from the mistakes of their large corporations. That way, ideas flow within the management, which births innovative ways of doing things and consequently product differentiation.
Competitive intelligence segments and their relevance to Aballu Artisan Chocolatier
The information from the internal and external environment of business servethe instrumental role of guiding the management on the best approaches to take in running an organization. Competitive intelligence is a huge topic, that is segmented into different phases. Those that are relevant to Aballu Artisan Chocolatier are marketing information, customer intelligence, competitor intelligence, and technical intelligence. According to Huster (2005, p.15) understanding the particular segments help the business to align its activities with the changes in the economy. Aballu, being a small company that has been in the market for a period of close to thirteen years, its growth is perceived to be slow, since the employees are less than ten. This is evidence that the company has invested less in understanding the dynamics of the market in which it operates. One of the importance of having the real data and facts of the market is that it enables in producing goods, that meets the consumers’needs (Marin and Poulter 2004, p.174). Also, the company could be offering the products with flaws without knowledge, which can be accurately gotten from the customers.
Moreover, the competitors are strong influencers in subduing the progress of the small enterprise such as Aballu Artisan Chocolatier. In the report released by Hasan et al. (2011, p.53) after conducting a study of the performance of the foodindustry, he found out that the large corporationsemploya considerable amount of money in marketing and advertising, which builds the customer loyalty. For a small company to excel in such an environment; therefore, it cannot compete by employing the same strategy. Hoffman (2006, p.411) is of the idea that the only cost-effective option that a small business can do to override the preferred brand is to differentiate the products. New products are created from the knowledge of what the competitors are offering, hence finding a gap to fill.
Since the inception of the company in the year 2006, it has undergone the turmoil of market changes, and the changing trends of consumption. As time progress, the customers are becoming more keen with their health, especially for foods that contain sugar. When the company started, the awareness and proliferated cases of diabetes were not enormous, but the populace of where the company operates are sensitive to this issue. Prospect intelligence would mitigate the chances of being caught unaware by the problems, which could have been addressed early enough through the utilization of the feedback from the customers (Hasan et al. 2011, p.52).Aballu Artisan Chocolatier optimizes on the quality of the products, but the little regard of the external environment has caused the stagnation for quite some time. The phenomenon is witnessed by lack of any other outlet, while the competitors such as Wickedly Welsh Chocolate Company are focusing on global outreach. Again, lack of definite plan to pitch for the market information has been a contributor to their slowed growth. The discussed segments are relevant to this business, as they encompass the external factors that influence the growth of any company, thus the need to invest funds on these areas.
Examine each segment in turn and generate competitive intelligence based on relevant secondary research that supports future opportunities for Aballu Artisan Chocolatier
To understand the position of Aballu Artisan Chocolatier in regards to competition in the market, it is essential to have a deeper analysis of each of the segment that was highlighted in the previous paragraphs. According to Hoffman (2006, p.410), a well-established business can maneuver through a complex market, by making sure that it understands the information of all the key players in the market among them being the customers, suppliers among others. These elements are essential, in establishing some of the areas to improve on to ensure that the operations of the business are not stalled.
One of the segment is marketing intelligence. It entails gathering information concerning the nature of the market and is primarily focused on the external environment (Marin and Poulter 2004, p.173). The main aim of this segment is to analyze the market trends, understanding what the customers require more elaborately. An appropriate method to comprehend the demands of the customers involves reviewing their feedbacks and addressing every issue with the paramount concern. Withal, it is also concerned with the intention of the management to remain aware of the laws regulating the operations in a given land, and the changes in the standards of services. For Aballu, that has established bases in Rossett, Wrexham; it is clear that the management understands the precepts of the land because it remains uninterrupted since itsstart. Based on this segment, the company should opt to understand the changing needs of the customers and diversify their products. Instead of offering chocolates and other snacks, it can incorporate drinks, which would significantly extend the revenue collection base. The research conducted by Huster (2005, p.16) affirmed that the demand for baked foods is increasing, as people value quick snacks since they lack time to cook. However, they are also cautious of their health, hence the need to extract the information from the consumers regarding what they wish.
Competitive intelligence, on the other hand, entails careful analysis of the players in the market, who offer similar products. It is a process that is beyond knowing the brands but involves comprehending their models of operations, with a particular focus on marketing. Information concerning the competitors is a sure lead to establishing the kind of products they use (Anica and Cucui 2009, p.333) and the channels of marketing that they use. The researcher also noted that competitor intelligence assists in knowing the new entrants in the market and key competitors. These are two sets of concern in any market, for they dictate the trends in terms of prices and the amount to inject in countering the proliferated marketing. On the other hand, Amit and Shoemaker (1993, p.42) argue that the information concerning a competitor might not be helpful to a small company, due to lack of enough resources to conduct meaningful analysis. Large companies usually have complex organizational structures, and their financial returns are huge. Hence its interpretation might be difficult for a small business that has not enough experts in finance. Therefore, the management might fail to get the gaps where they can differentiate their operations. Contrary, Tao, and Prescott (2000, p.73)are of the idea that the small enterprises can leverage on already established procedures by large companies, and employ the same to resuscitate their financial strength, and stand in a position to command a particular market share.
Moreover, customer intelligence is another aspect that generates concern for the management of any organization. In this case,Viviers et al. (2005, p.575) noted in his study that customers are the most important asset of any business because they keep the organization running. Further, he extrapolated his ideas by affirming that if the leaders of the organization are not able to understand what the buyers want, they can resort to producing goods that are not acceptable in the market. The modern market has considerably changed compared to the traditional form of doing business. There is much reliance on data, rather than internal strategies that are chiefly designed to fit the standards (Rouach and Santi 2001, p.558). A small company like a case study that is under investigation can leverage on identifying the key areas of concern in regards to the customers’ needs. They might include changing or adding particular ingredients, rebranding, introducing new products among others. The decision arrived at should be based on the opinions of the consumers, who have a real experience of the company’s products. Similarly, another customer intelligence that can be generated from this segment is the budget cycle. Over time, the prices of goods and services changes depending on the prevailing market.Selling higher rates might not attract the customers, especially a small enterprise which has not built enough customer platform (Wanderley 1999, p.199). Large corporations can charge high prices and still maintain their returns, due to the loyalty of the customers. The most important thing is to have a deeper understanding of the market and place the prices of the products in regards to what the customers already know.
Finally, technical intelligence constitutes the experts who perform the tasks that require a particular set of skills such as information technology, financial skills among others (Teo and Choo 2001, p.67). For a business to perform well in a complex market, an amalgamation of all experts is essential, in helping the management to come up with strategies to compete favorably with the rivals. Under this category, the administration of Aballu Artisan Chocolatier could seek to know the type of technologies that the competitors utilize, and try to improve their technical team based on the findings. Likewise, establishing how the marketing is done opens the channels of hastening the popularity of the brand, not only in the local setting but also in the international markets.
Channels the organization could utilize to maintain a regular flow of competitive intelligence in the future.
Generating information concerning the competitors that is useful for a small company requires a procedural approach that is well defined by elucidating the exact information needed. To help in that two major tools are used, which are SWOT analysis and win-loss analysis. For SWOT analysis, it focuses on identifying the strengths, weaknesses, opportunities, and threats of the business. Classified as the external environment, they influence the performance of an organization hence the need to have a glimpse of how they operate. On the other hand, win-loss analysis is defined by Wright and Calof (2006, p.463) as a forensic approach in understanding the market, that aims at deconstructing the way a company markets its products from prospect’s perspective. The table below illustrates the SWOT analysis of Aballu Artisan Chocolatier, which gives an idea of the possible performance in the future and its ability to sustain in the market.
|Strengths Strong growth of the confectionery market, which for the past one year has grown by 5%. It is expected that the market would bloom in the future.Brand positioning is attributed toa high regard for a quality product.Price is kept at the range where every person can be able to afford the products of Aballu Artisan Chocolatier.They are developing good skills by integrating experts in their marketing strategy.||Weaknesses Lack of a mix of products as observed in other companies, which makes the company less competitive in the market.Lack of innovativeness in making chocolate is ahuge area that has not been tapped into — for example, making of designer chocolates which fetches huge returns.The product is not for export which denies the company to enjoy the international market.The manufacturing unit is single and located in one place, as well as lacking modern technology in production.|
|Opportunities Cover other areas where the demand for chocolates and confectionary products are high.Focus on exporting the products to improve profits and learn new ways of doing business.Increase the range of products offered to the consumers and heighten the connection with the customers.||Threats Threats from international brands such as Nestle, Cadbury among others. This makes it hard for the company to find new customers.Lack of well-skilled employees, as compared to the large companies that attract the best workers in the market.Established companies invest huge capital in the advertisement, which scares away Aballu Artisan Chocolatier.|
The three critical optimal approaches to completive intelligence help the management to understand the best option they can adapt to ensure the companies’ activities run in the required manner. The first one is tactical intelligence, which entails differentiating the policies, products and marketing strategies (Huster 2005, p.16). Any business that wishes to progress has to monitor the trends of the competitor, as a way to identify the areas they fail to perform well. Although the process might be costly, the returns of offering unique products or services command the market and may help customers. As the word suggests, tactical intelligence is the use of market psychology, to override the rivals, and requires a combination of both technological and human predictions, until the goals of the company are achieved.
On the other hand, strategic intelligence aims to understand the goals of the competitor, capabilities, the nature of its customers, their partners among other issues in the same line (Hoffman 2006, p.411). Such information is confidential, and getting the same might require the use of high-level interrogation. The data can be obtained from the employees or senior management leaders, who have accurate data about the progress of the company. The final approach is counterintelligence. It involves protecting the confidential information of the company about the technology, hiring strategies and the security (Marin and Poulter 2004, p.176). In case Aballu Artisan Chocolatier, it might fail to give information about its financial performance, because the less return can put off a large company from divulging their secret to excellence.
- One of the most important approaches that the company can choose to adapt to increase its growth is differentiating its products from those of other companies. The confectionery market is flooded, and the competition is rapidly growing. The only way to survive is to lure customers with well-curated products, which can be achieved by intriguing their psychology. For example, the company can change the branding of its products to be more attractive to buyers.
- The company should recruit highly qualified employees, who understand the recent changes in the field of the food industry, and who can anticipate the changes in demand for modern customers.
- Aballu Artisan Chocolatier should consider utilizing the cheaper methods of advertisement such as Facebook, and other social media, to the first implant in the minds of the customers about their brand. The plans are cost-effective and practical.
- The company should consider diversifying the products, to increase the revenue collected per given time. Presently, the Aballu Artisan Chocolatier offers the only confectionary but yet has remained at a lower status for about twelve years. The management should reconsider selling other products such as beverages.
Competitive intelligence is the modern form of understanding what the competitors do, and help the company to come up with workable strategies to remain relevant. In the contemporary market where every company wishes to win the customers’ loyalty, differentiating the products and services becomes optimal. Competitive intelligence is essential for Aballu Artisan Chocolatier because it would help the company to improve its marketing strategies, advanced technology in production and find opportunities to invest in. The four segments that the company can generate useful information from include market intelligence, competitive intelligence, technological intelligence, and customer intelligence. Likewise, the channels of maintaining the flowof competitive intelligence are broadly classified into SWOT analysis and win-loss analysis. Aballu Artisan Chocolatier can leverage on the above to expand its processes.
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