Australian Journal of Business and Management Research New South Wales Research Centre Australia (NSWRCA) Vol.05 No.08 | 2018 ISSN: 1839 - 0846 11 THE EFFECT OF COMPETITIVE INTELLIGENCE ON MARKETING CAPABILITIES AND ORGANIZATIONAL PERFORMANCE Hamid Tahmasebifard, Seyed Fazael Vaghari Souran, Mahdieh Mirzaagha and Mohammad Mahdi Pouyan * ABSTRACT The marketing and strategic management literature is well-documented regarding the drivers of competitive intelligence (CI) and how they are gathered, its organization, and dissemination through the organization. However, the impact of CI upon the development of other organizational capabilities including marketing capabilities and the performance of organizations has been neglected and very scarce through the literature. Accordingly, this study seeks to investigate the impact of CI categories including market intelligence, competitor intelligence and technological intelligence on marketing capabilities (i.e. market-sensing capability and customer-linking capability), as well as the organizational performance. To this end, structured questionnaire was applied and a survey of 225 persons involved in sales and marketing affairs of insurance companies in Iran was administrated. Results showed that CI categories have direct and significant effect on marketing capabilities and the organization’s performance. Keywords: Competitive intelligence, Marketing capability, Organizational performance, Market intelligence JEL Classification: G14, L25 I. INTRODUCTION Nowadays, firms are seeking to cultivate their ability to respond promptly and appropriately to changes of various environmental factors along with heightened competition in the business environment (Tahmasebifard, Zangoueinezhad, and Jafari, 2017). Economic, social, political, and industrial environment have recently undergone numerous and rapid changes. Inevitably, those organizations which do not adapt with these growing changes will fade away soon or late. To handle ever-increasing factors regarding businesses, CI (CI) was introduced in early 1980s as a new approach to gain competitive advantage (Fleicher, 2004; Nasri, 2011). CI is not merely marketing research (Bose, 2008) or scanning business environment. It is, in fact, the process of knowing the nature of competition. Therefore, collecting information around all aspects of competitive environment and applying the obtained information in short-term and long-term plans of the company enables that organization to take the lead in competition and be one step ahead of others (Jourdan, Z., Rainer, R.K. and Marshal, T.E, 2008; Wright, S., Pickton, D.W. and Callow, J., 2002). CI is the main instrument for gathering information for marketing activities, adapting with the market (Patton and Mckenna, 2005) and maintaining competitve advantage (Strauss and Du Toit, 2010). Despite the fact that literature on the drivers of CI its organization and dissemination within the organization, there is scant research on outputs of CI which empirically show that whether these activities have any effects on the organization’s performance or not (Adidam, P. T., Banerjee, M. and Shukla, P., 2012). Moreover, limited studies which investigated the consequences and outcomes of competitive advantage have mainly focused on organizational performance and the impact of CI on other organizational capabilities is very scarce. Further, most of the researches on CI are descriptive and anecdotal case studies reflecting the activities of specific organization that limited the generalizability and reliability of such studies’ result (Saayman et al., 2008; Yap et al., 2014). Also, the effects of CI’s sub-categories on different aspects of the organization’s performance is neglected through the literature that could provide new insights for determining emphasis domains in gathering information. Specifically, in current economic situation that companies are condemned to act efficiently and effectively, the result of this investigation could be a great contribution for companies. In an attempt to fill aforementioned gaps, present study seeks to answer these questions. Whether CI activities affect the organizational performance or not? Does CI lay impact on other marketing capabilities of the organizations? If so, how is this impact and how does CI’s sub-categories contribute to the organizational performance? * The author(s) is, respectively, faculty members in Department of Business Management, Islamic Azad University, Central Tehran Branch, Tehran, Iran Corresponding author e-mail: Ham.tahmasebifard.mng@iauctb.ac.ir