American Airlines

American Airlines

All firms engaged in activities as a tactical entity will, in some form or another, attempt to get a handle on expected demand for their products within a certain future time period such as a week, month, quarter or year. This is a tactical environment and, aside from any earth shattering new developments or shocks to the existing environment, forecasts for expected demand/maximum-likelihood share of market may be made with a fair degree of accuracy with little variance. There are several key points that are important to this process, such as: activities of competitors, market projections for the industry by industry insiders/analysts, and a great deal of historical data.

Competitive intelligence is a parameter which attempts to add subjective background to the environment in which demand forecasting is carried out. Information comes from a variety of sources such as secondary information gathered from written sources, direct observation, and from competitors themselves through press releases, industry gatherings and trade journals. This information provides some indication of what the competition plans to do as far as pricing, new products, promotions and distribution/sales. This data has a dual purpose since it may also be used within model based contingency planning when management scrutinizes competition in an effort to uncover developing threats and opportunities. Experienced tactical managers have the valuable ability to incorporate this type of information, which is not easily quantifiable, as a complement to the numerical aspects of demand forecasting. However, this is not to say that there is no information system requirement for this input into the demand forecasting process simply because it is difficult to assimilate into an objective, quantifiable form. On the contrary, a database should be set up in the context of an expert system to contain information gathered on competitors. It must be readily accessible,