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Michael Porter* describes competitive advantage as follows: “Competitive advantage grows out of value a firm is able to create for its buyers that exceeds the firm's cost of creating it. Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price.”

Online conversations are happening in every part of the world.

Barbara Ohlsson is a business analyst at PBT.<b style='mso-bidi-font-weight:normal'></b>

I would like to describe “competitive edge” as the internal strengths within an organisation, which - if identified and leveraged correctly - could lead to an organisation's competitive advantage within the industry in which it operates. So how does an organisation gain competitive advantage by using business intelligence (BI) and customer data in its strategic mix?

Which strategic decisions and plans have market-leading organisations implemented in order to gain greater market share?

The answer is simple: it lies within the data.

Immense benefits are reaped by customers when organisations adopt the approach of analysing enterprise-wide data, deducing relationships within the data and applying BI. An example as outlined below could be used to illustrate this thinking: transactional data is gathered for Miss Smith over time.

Miss Smith's spend frequency and product or brand preference could be analysed using trend analysis. This information provides the organisation with the ability to predict what Miss Smith would likely be purchasing in the future, leading to tailor-made campaigns, rewards and discounts that would be applicable specifically to meet her purchase preferences. Finally, Miss Smith receives a voucher that she could and wouldwant to use.

The impact of this targeted, individualistic approach to marketing ultimately leads to the perceived “personal relationship” between customer A and the organisation, leading to loyalty and long-term customer retention - certainly providing a definite competitive advantage.

In light of the above, sentiment analysis is a method (within the process of BI) of automatically locating and analysing digital content in real-time from across multiple channels such as Web sites, e-mails, forms and surveys in an attempt to hone in on customer sentiment buried within textual data.

The last year has seen a rise in the uptake and infiltration of social networks, blogs, micro-blogs and forums among businesses. In fact, a global survey revealed that 52% of businesses globally, and in particular, 55% of businesses in South Africa, are using Web sites such as Twitter to engage, connect with and inform existing customers.

Online conversations are happening in every part of the world and the ability to capture them is critical to harness the potential of consumer awareness and brand power for a business to ensure an advantage is obtained over competitors, particularly in a constantly changing business environment.

The business world today is fast-paced; business climates change rapidly and the world is moving towards establishing customer-centric organisations that improve their relationships with their customers. In order for strategic marketing leaders to make the relevant choices for the business, they require access to key business factors and performance metrics.

By applying advanced analytics, sentiment and competitive analysis to an already rich organisational data store, strategists have access to key measures required and achieved for each phase within the customer life cycle - namely, reach, acquisition, retention and loyalty, while achieving valuable insight into the external environment in which the organisation operates.

Ultimately, this means the organisation is able to build its relationship with Miss Smith and improve the likelihood that she will adopt new product offerings by the organisation.

BI methodologies and tools such as extraction, transformation and loading tools, front-end reporting tools and advanced analytics packages all provide the framework that allows all data-generating and data-gathering points in the company - regardless of their location or types of data they store - to communicate, share, and evolve into an integrated information factory that drives competitive advantage.

Organisations striving towards successful competitive advantage are similar to thoroughbred horses in a world-class horse-racing event - the organisation being the beast, BI being the trainer and the data scientist being the jockey - all key players in ensuring an organisation runs effectively and efficiently.

* Michael Porter, Competitive Advantage, 1985, p.3