The Role of Intelligence in Strategy Formulation
Strategic management is that ideas and injunctions that enable the organization achieve its
objective or long-term target to perform a better performance. The purpose of strategic
management is to seek the opportunities for better future of the organization. Generally, good
strategic management practices can improve the organization performance and achieve the
organization target objectives. The strategies on an organization are made by the management
itself to ensure the successful of the organization. The strategic management process consists of
three stages which are strategy formulation, strategy implementation and strategy evaluation.
Strategy formulation want to ensure that the organization achieve the objectives that they
have been made. Strategy formulation includes the decision on what business to conduct, how to
allocate the resources, and whether want the business join or enter to international market. Besides,
strategy formulation phase includes developing a vision and mission, identifying an organization
external opportunities and threats, determining internal strength and weaknesses, establishing
long-term objectives, generating alternative strategies, and choosing the best alternative strategy
to be pursue. It also includes various issues in strategic management includes deciding what new
business to enter, what business to abandon, how to allocate resources without hostile takeovers,
whether to expand operations or diversify, whether to merge or form a joint venture, whether to
enter international markets and how to avoid a hostile takeover.
The Role of Intelligence in Strategy Formulation
Good intelligence is not necessarily going to make a great strategy while successful strategies
are derived from good intelligence concerning a company’s total business environment including
the competition. There is some intelligence role in strategy formulation. Among them are:
1. Describing the Competitive Environment – Intelligence analysis must to
carry out their responsibilities, so that the company can compete with the challenging
environment over time. Besides that, intelligence should also determine the causes of the
company’s competitive environment, including competitors, customers, products, the
structure of the industry in which they all perform, and the type of competition, such as
price performance, and technology.
2. Forecasting the Future Competitive Environment – Intelligence
department can provide predictions of future business for the company, especially in the
competitive environment in which the company is likely to find itself. Business intelligence
estimate is the most appropriate intelligence products to reflect the competitive
environment in the future, as being one entirely different from the business environment
that it competes in today.
3. Identifying and Compensating for Exposed Weaknesses – Company’s
own weaknesses and vulnerabilities can be identify and assess by using intelligence
department. Usually when a company is about to launch a new strategy or enter a market
or business that it has never participated in before, this ability is particularly valuable
because the competition is likely to have assessed the newcomers strengths and weaknesses
and will exploit those weaknesses that are truly vulnerabilities. Before entering the new
business arena, companies must be aware of his own weaknesses before the occurrence of
a competition. This is to ensure that the company is always ready to take corrective action
or formulate new strategies so that the company is not affected.
Using Intelligence to Implement and Adjust Strategy to the Changing Competitive
Environment
After the new strategy have been designed and tested, then it goes through two distinct phases
of implementation. Initial implementation of the first phase is when competitors began to detect
and respond to the strategy’s salient features. While the second phase is developing a more
complete and appropriate set of actions to counter your strategy. The intelligence that you gather
during both distinct phases of implementation are critical to the long-term viability of your new
strategy because comprehensiveness, timeliness, objectivity and analysis are required in these two
phase. Few US companies are capable of managing such effective business intelligence operations
and thus formulating the appropriate ongoing business plans necessary to continually adjust their
strategy to the changing competitive environment.
