The first fundamental category of business intelligence is profit. All business activity is driven by profit. No aspect of the business is considered indifferent in its overall success or failure. A company that profits will attract investors, which will translate into new capital and new business opportunities. It is that simple; without profit, a company ceases to exist.
However, profit is not the only motivator of business activity. Many companies derive revenue from either their customers or the general public. For example, a manufacturer that produces shoes may have a retail outlet located in an area that lacks demand for its product. However, the manufacturer’s production capacity will allow it to sell the shoes at a profit since it is backed up by demand in the surrounding area.
Another aspect of the fundamental category of business intelligence is market penetration.
Penetration is defined as the percentage of the population that can be reached by a firm’s product or service. Obviously, this is a complex function of geography, demographics, advertising budget, etc. However, business owners can use penetration studies to determine whether their particular market is under-served. A firm could also use penetration studies to predict which segments of the market it should enter in order to maximize its profits.
Businesses must also take into consideration their competitors. There is no way that a business can survive if it does not even know what its competition does, if it cannot figure out what its competitors do, or if it cannot prevent its competitors from entering the market. Analysis of competitors is a fundamental part of business. This category includes all aspects of business activity, including: pricing, marketing, distribution, research and development, and operations.
The final category, government support, includes various programs that are provided by the federal government for the economic well-being of businesses. Examples include: grants, loans, subsidies, and research and development programs. This category is also essential because it helps ensure that a business has the resources it needs in order to succeed. Examples of programs in this category include: job training, small business loans, infrastructure development, research and development, and business grants. While government support is necessary, companies may ignore this category at their own peril.
Each one of these four core areas is important to a business. In order to understand which of them is the most important, you need to understand not only how each one relates to your company but also how each one affects the other categories. Fundamental intelligence analysis is the foundation on which all of these categories are based. If you wish to succeed as a business, you need to invest in this sort of analysis to make sure that you are making the right decisions.