Competitive Intelligence Based Decision Making Model as a Global

Market Competitive Strategy (MEA 2015) in Educational Institutions

Eka Prihatin and Nani Hartini

Universitas Pendidikan Indonesia, Jl. Setiabudhi No. 229 Bandung, Indonesia

{ekaprihatin, nani_harniti}@upi.edu

Keywords: Competitive intelligence, decision making, AEC.

Abstract: AEC 2015 generates borderless world paradigm - the world without time, place and territorial boundaries,

that creates highly competitive conditions both at national and international level. Such condition places the

accuracy and speed in decision-making as fundamental factors for institutions to show their competitive

strategy in securing place on the international competition board. This study used descriptive method with the

quantitative approach and involved chairman and secretary of department, lecturers as well as registered

students from UPI’s Faculty of Educational Sciences as its respondents. This study was aimed at developing

a model of decision making that can be used in this era of globalization of educational sector. The study came

up with a decision-making model that was based on the particular condition and situation, as well as the urgent

priorities. It also found that this model received fairly good satisfaction level from educators and learners. It

was concluded that the accuracy and speed in making decision would affect the growth and development of

educational institutions as well as be a competitive advantage among the globalization market participants.

1 INTRODUCTION

The ASEAN Economic Community (AEC) is a

driving force that influences all aspects of life

especially education, where AEC with its free market

policy will settle the direction and vision of every

educational institution. Each educational institution

aims to provide outputs / graduates in accordance

with the demands of the labor market as the graduate

users, this is also seen as a liberalization of trading in

goods, services, investments, skilled labor and capital

flows, whereby in order to support the speed of

skilled manpower, ASEAN which is structured in a

mutual recognition arrangement (MRA), which aims

to create mechanisms of procedure and accreditation

to gain equality by recognizing the differences

between countries in education, training, experience

and licensing requirements for global competing

professionals.

Indonesia itself has a fundamental problem to

become a solid contender in the ASEAN Economic

Community (AEC) 2015 of which is the low level of

productivity because our industry is controlled by

less skilled workers and the increasing number of

unemployed labor as a result of incompatibility

between graduate competences with the demands of

the labor market. While in order to produce educated

workforce, it needs accuracy and speed in decision-

making process, which depends on the ability of

education leaders to sort the information into

intelligence so as to create competitive strategy that

has competitive advantage in dealing with AEC

2015. Accuracy and speed in making decisions will

affect the growth and development of educational

institutions and become a competitive advantage in

dealing with the free markets.

2 LITERATUR REVIEW

The competitive intelligence strategy is a tool

instrument in improving competitive advantage

which is able to differentiate educational services

from an educational institution to the other ones.

Competitive strategy will bring the educational

institutions to the stage of educational customers'

demand because the services are in accordance with

the demands and needs of theirs, stakeholders and the

labor market. The goal of all implementations is the

quality assurance of education as a driving force to

the growth and development of educational

institutions to survive.

Prihatin, E. and Hartini, N.

Competitive Intelligence Based Decision Making Model as a Global Market Competitive Strategy (MEA 2015) in Educational Institutions.

In Proceedings of the 1st International Conference on Educational Sciences (ICES 2017) - Volume 2, pages 63-68

ISBN: 978-989-758-314-8

Competitive Intelligence for educational

institutions will assist in: (1) Anticipating changes in

the labor market; (2) Anticipating the activities of

competitors; (3) Finding new or potential

competitors; (4) Learning from the successes and

failures of other educational institutions; (5) Improve

the number and quality of acquisition targets; (6)

Learning about technology, educational products,

and new processes that affect the performance of

educational institutions; (7) Learning about political,

legislative, or regulatory changes that will affect the

administration of educational institutions; (8)

Entering educational institutions that have new

advantages; (9) Looking at the performance of

educational institutions with an open mind and (10)

Assisting in applying advanced management tools

(Bulley, Baku, and Allan, 2014).

Based on the above concept, the purpose of this

research is to create competitive strategy in decision-

making quality through Competitive Intelligence

model as competitive advantage from educational

institutions that are oriented to global challenge.

Competitive Intelligence is information (based on

facts of numbers, statistics etc.) that have been

filtered, distilled and analyzed, so that intelligence

becomes something that can be followed up by

educational leaders to make quick and precise

decisions. Competitive intelligence is a very

important tool of an organization strategic planning

and management process. The formal exploration

process of the marketing strategy paradigm has been

linked with the environmental scanning interactive as

a basis for gathering and processing the information

and the information processing theory paradigm

(Dishman and Calof, 2008).

3 RESEARCH METHODS

This research is a descriptive study with a quantitative

approach to see how far the influence of decision-

making model is used to provide satisfaction to the

education customers and the development research

employs the research and development (R and D)

type. This research is the first year research script that

aims to develop a model of decision making in

encountering the free market in the world of

education.

This research was conducted at 3 departments in

Education Faculty of Indonesia University of

Education. The respondents were (1) the Chairman

and Secretary of the Department; (2) Educators that

are taken by 3 persons randomly selected in each

department; (3) 50 students from each department

that were selected using prototype sampling.

The causal relationship between these variables is

assessed through the following stages: (1) the

development of research instruments for each

variable followed by a test to test the validity and

reliability of the instruments used for the collection of

research data; (2) data collection conducted by

disseminating the instruments to a predetermined

number of samples, the department chairman and

secretary get a questionnaire about their routine

decision-making stage, while educators and learners

are given a questionnaire about satisfaction as an

education customer; and (3) data analysis which is the

data processing using a statistical technique. The

statistical technique used in this research is Rank-

Spearman Method.

There are two 2 main variables, which are X and

Y. X is competitive intelligence-based decision

making model, that includes X1 (identification of

problem), X2 (internal and external analysis), X3

(Alternative decisions), X4 (decision making).

While, Y variable is free market (AEC 2015) that

consists of (Y1) Anticipating changes in the labor

market; (Y2) Anticipating the activities of

competitors; (Y3) Finding new or potential

competitors; (Y4) Learning from the successes and

failures of other educational institutions; (Y5)

Improve the number and quality of acquisition

targets; (Y6) Learning about technology, educational

products, and new processes that affect the

performance of educational institutions; (Y7)

Learning about political, legislative, or regulatory

changes that will affect the administration of

educational institutions; (Y8) Entering educational

institutions that have new advantages; (Y9) Looking

at the performance of educational institutions with an

open mind and (Y10) Assisting in applying advanced

management tools

4 RESULTS AND DISCUSSION

All decisions made by the Chairman and Secretary of

the Department we based on the most urgent

situations, conditions and priorities. The most

essential point is a win-win solution for the

department and for the customers. The main priorities

are related to the problems that exist in the

department. The programs proposed in the

department's APAB (Annual Plan of Activities and

Budget) are consistent with the guidelines of the

institution and almost remain similar for each year, in

the sense of not having a superior strategy to change

the leadership process in accordance with global

ICES 2017 - 1st International Conference on Educational Sciences

demands. The most interesting is how they prepare to

meet AEC by conducting international seminars and

study visits abroad.

Table 1: Rank-Spearman method.

Rank-

Spearman

10%

3,5%

10,5%

10%

5,6%

5,5%

10%

6,1%

10%

15,7%

10%

20%

16,3%

10%

6,3%

10%

11,7%

18%

10%

15%

10%

15%

12,8%

Y10

15%

10%

15%

4.1 Education Customer Satisfaction

It revolves around how the customer's feelings are

related to decisions taken by the department chairman

and secretary. 97% educators reacted that the program

is always the same every year, the difference is only

in the place or location visited. Likewise with the

program to be done, about 65% suggested that each

program is distributed to all educators, but the

implementation is still held by the department, so the

value of responsibility is reduced. 80% educator

subjects mentioned that there is no good cooperation

between lecturers in the implementation of duties and

responsibilities (except in lectures) so that almost all

programs are not running according to plan. 67%

argued that in reality there was an intergroup gap so

the value of trust was reduced.

Learner subjects responded to 54% leadership

satisfaction, assuming that departments rarely

socialize the policies at the institution and feel

disappointed not knowing important information. For

example in relation to institutional programs on

activities that are global, scholarship

s, government-funded research as well as career

guidance. Institutional programs such as student

exchanges, abroad Community Service Program,

career guidance for those who are willing to work and

who continue to study in post-graduate and others.

Overall the level of student satisfaction is at a fairly

good range.

4.2 Discussion

Routine decision-making, basically results in

something that can be predicted as long as the

program is implemented and only provides a minimal

value of the benefits, thus the satisfaction also ranks

in the minimal range. The decision-making process

will have a major impact on the success and

usefulness of the program, so it takes intelligence to

determine the right program in accordance with the

demands of global change. The capability to predict

the success of a decision depends largely on whether

the decision solves a problem or an innovative leap

forward to the upcoming changes, the importance of

translating existing data into precise predictions will

lead to higher level decision making resulting in the

processes that are out of the box and worth to be

applied to encounter the fast pace of global changes

which are industry and work demands.

4.3 Competitive Intelligence Based

Decision-Making Model

In facing this free market, educational institutions

must begin to be wary of the presence of other

countries' invasion to market their educational

services along with the great institutions in their

countries, this will be a new threat and challenge for

our world of education. By presupposing generally

that whatever products come from outside, our

society sees that it is better and better quality,

moreover it is supported by the famous name of their

institution, it will certainly be a reference in

determining which educational service is most

appropriate for their children.

Competitive intelligent is data that has been

filtered and distilled so that becomes a powerful data

that will be a recommendation in decision making.

The default rule of making the decision is 90% data

and 10% intuition, so the data is a most valuable item

that will determine the quality of decisions taken. In

the process of making decisions by using competitive

intelligences there are several phases, among them

are,

Competitive Intelligence Based Decision Making Model as a Global Market Competitive Strategy (MEA 2015) in Educational Institutions

Figure 1: Competitive intelligence based decision making model.

The planning phase which is the most essential

step in the competitive intelligence process. An

effective intelligence process does not only gather as

much information but focuses on issues that are

important to the organization. (Daft et al., 1988;

Gilad, 1989; Herring, 1998; Montgomery and

Weinberg, 1979; Porter, 1980 in Prihatin, 2009). This

phase provides the necessary direction for

competitive intelligence efforts to ensure that

operations focus on collecting and analyzing key data

relevant to specific intelligence needs aimed at

specifically identifying the intelligence needs of an

institution. The Key intelligence Topics (KITs) are

assigned to one of three functional categories:

strategic decisions and actions, including the

development of strategic plans; early warning topics,

including competitors' initiatives, technological

shocks and government action; and description of

key players in certain markets including competitors,

customers, suppliers, regulators, and potential

partners.

During the collection phase, information is

collected from various sources both primary and

secondary sources by utilizing various available

techniques. Primary sources mentioned include

government agencies, employees, suppliers,

customers, conferences. While some common

secondary sources include magazines, TV, radio,

analyst reports. The choice of information resources

directly relate to the type of information itself, which

usually focuses on factors such as ease of access, ease

of source processing, cost, availability, quantity and

quality of information which will likely impact on

options. Bulley et al., 2014, identifies that 80% of the

information needed to make intelligence actually

exist within the company (Rouach: 2001).

In the analysis phase, the information collected

during this collection phase is transformed into

actionable intelligence where strategic and tactical

decisions are made (Kahaner, 1997, Calof and Miller,

1997, Herring, 1998, in Prihatin, 2009). This is where

the meaning attaches to the volume of information

and is put into the context of sufficiency. Decision

makers need for effective decision making. One of the

analytical tools that can be used to analyze

information, includes PEST (political / legal,

economical, socio-cultural, and technological

analysis), Porter's Five Forces Model, SWOT

analysis (Strength, Weakness, Opportunity and

Threats) and competitor profiling.

Planning phase

Collection phase

Analysis phase

Communication phase

IDENTIFIKTION

OF PROBLEMS

MASALAH

INTERNAL AND

EXTERNAL

ENVIRONMENTA

L ANALYSIS

COMPETITIVE

INTELLIGENCE

ALTERNATIVE DECISIONS

DECISION MAKING

Procedure and structure

phase

Organizational awareness and

culture phase

ICES 2017 - 1st International Conference on Educational Sciences

The next phase is communication, the results of

the intelligence process (or individual projects) need

to be communicated to people with the authority and

responsibility to act on the findings. Often,

communication findings are in the form of a report,

dashboard, or meeting (Bose, 2008). The

communication phase also includes evaluation of

competitive intelligence processes, assessment of

effectiveness in the decision-making process. The

decision maker is the person responsible for the

evaluation of competitive intelligence programs.

Feedback from decision makers is also important in

the development and improvement of future

competitive intelligence plans, as well as review and

reassessment of organizational strategies (Fleisher

2001 in Prihatin, 2009).

In the procedure and structure phase, the success

of the competitive intelligence process requires both

formal and informal policies, procedures and

infrastructure that enable employees to contribute

effectively to the competitive system of intelligence

(Saayman et al., 2008). Without the support of

management, the competitive intelegent will not

appear as the priority in the initiatives exist within the

larger organization. The aforementioned formal

structure is by involving leaders to guide and direct

the collection, analysis and dissemination of

intelligence within the organization.

The next phase is organizational awareness and

culture, in order to take advantage of competitive

intelligence efforts, it is needed for organizational

awareness (Saayman et al., 2008) and cultural

competition. Awareness of the importance of

competitive intelligence needs to be made on the

organization. Without the proper awareness and

attitudes that support information sharing, it is

difficult to develop intelligence within an

organization. Competitive intelligence is an ability to

understand, analyze, and assess the internal and

external environments associated with customers,

competitors, markets, industries and to utilize the

knowledge gained to discover new and remaining

competitive opportunities. High awareness of a

company's competitive environment tends to be one

of the foundations for organizational learning theory

(Garvin, 1993; Sinkula, 1994; Slater and Narver,

1995 in Prihatin, 2009).

Subsequently entering on the phase of quality of

intelligence provided, the value of intelligence,

generated through a competitive intelligence process,

can be measured in one or more of the following

features, including: 1) Accuracy; 2) Clarity; 3)

Usability; 4) Depth; 5) Relevance; 6)

Responsiveness; 7) Timing and 8)

Comprehensiveness (Eppler, 2007).

5 CONCLUSION

In order to deal with AEC 2015, educational

institutions are required to produce educated workers,

therefore it requires accuracy and speed in the

decision making process, which depends on the

ability of educational leaders in sorting information

into intelligence so as to create competitive strategy

that has a competitive advantage in encountering

AEC 2015. The accuracy and speed in decision

making will affect the growth and development of

educational institutions as well as a competitive

advantage in encountering free markets.

In an educational institution, the department is the

ace of institutional strength so that the relationship is

very close between the activities in the department

with the higher level of institutional excellence, so

that every decision of each department and study

program becomes the determinant of institutional

development. The decision making model in the

department has a choice based tendency over the

activities that the institution has established so that its

development level can be predicted, as well as the

level of customers' satisfaction has also been

established. The decision-making model which is

based on competitive intelligent will be one of the

alternatives in creating competitive strategy that

becomes the quantum development of the institution.

The results of the distillation of the data becomes

the foothold in the decision making of the strategic

excellence of each institution that usually revolves

around how to build customer relationship

management, create trust and confidence, forming

competitive advantage centers, the determination of

ICT applications in accordance with technology

changes, professionalism and foster cooperation,

partnership, and networking.

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ICES 2017 - 1st International Conference on Educational Sciences