Thursday, March 12, 2009

From Business Intelligence to Scenario Building

Martelli, Antonio. "FROM BUSINESS INTELLIGENCE TO SCENARIO BUILDING. (Cover story)." Futures Research Quarterly 23, no. 4 (Winter2007 2007): 5-22. Academic Search Complete, EBSCOhost (accessed March 12, 2009).

Summary:
Antonio Martelli’s article, From Business Intelligence to Scenario Building, starts off stating that, “Business intelligence and scenario building and planning are both fundamental tools of strategic analysis.” He asserts that these two tools have a mutual relationship; in order to create a scenario, you must have information – something that stems from intelligence. In return, scenarios and information assist in the planning process. He continues on by defining and discussing the purpose of intelligence and uses a comparison of military intelligence to business strategy.

Martelli posits that SWOT analysis is used as a good starting point for putting intelligence into the competitive strategy context. Furthermore, intelligence can be used to examine both the internal (SW) and external (OT) framework of the SWOT analysis. He mentions that although there is some overlap between the SW and OT, the two as a whole are quite different.

In this article, Martelli foregoes discussion on the internal framework and focuses primarily on the external framework due to its difficulty to obtain.
Within the external framework of SWOT analysis, opportunities can tend to be somewhat nebulous. They can arrive in the form of changes in the industry structure that causes a potential for competitive advantage or from changes within the intra-industry structure of value systems that potentially increase global advantage. These opportunities involve the competitive position or the corporate position of the company respectively.

Since Threats tend to be more specific, Martelli states that it is important for businesses to use an early warning system to clearly identify potential threats before to develop. Since early warning recognition relies on indications, indication lists can be used in examining what threats exist in the present and help to formulate possible future threats.

Although Martelli does not explicitly state the pros and cons of SWOT analysis, it is apparent to the reader that Martelli is a big proponent for using SWOT analysis. More obvious is Martelli’s assertion that the intelligence process should be applied when examining the internal and external framework of a company. The benefit of conducting SWOT analysis primarily lies in the clarification of the business environment, while the detriment of the process is ensuring that the intelligence collected is truly accurate. Inaccuracies will ultimately flaw any strategic plan.

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