Contemporary Business and Competitive Intelligence

While “business intelligence,” a term first coined by H. P. Luhn in 1958, once connoted a repository for a business’ strategic information, the term today refers to a process designed to help ensure a business remains ahead of its competitors. In essence, contemporary business intelligence is highly intertwined with the principles of corporate strategy and marketing: businesses must perceive changes in their environment and then formulate a plan for action based on these events. Firms operating in today's global economy participate in a highly dynamic environment that both influences and constrains their activities. As such, to ensure survival and future profitability, firms must continually perceive their external environment and formulate educated business decisions based on quantifiable data. This chapter describes these principles of contemporary business intelligence, along with selected sample applications of the techniques. It discusses the tenets of contemporary business intelligence and corporate strategy, along with unique methods of analysis that may assist in formulating more educated decisions. It further considers the applications of contemporary business intelligence to Private Equity (PE) and presents selective elements of competitive intelligence that may benefit PE fund managers in selecting and overseeing portfolio companies.