Competitive intelligence (CI) is a critical success factor for for-profit and non-profit, large and small, public and private firms (Pellissier & Nenzhelele 2013a). CI improves product or service quality, quality of decisions and quality of life (Du Toit & Sewdass 2014; Maune 2014). CI gives competitive advantage to firms that operate in a competitive business environment (Barnea 2014). The South African property sector is very competitive, and it continues to thrive despite being negatively affected by the recession (Estate Agency Affairs Board [EAAB] Annual Report 2013/2014). According to the Estate Agency Affairs Board (EAAB) Annual Report (2013/2014), the South African property sector contributes highly to job creation, wealth creation, skills development, poverty reduction and economic growth. It contributes R191.4 billion to the South African economy (EAAB, 2014). The South African property sector remains competitive in spite of South Africa having dropped in ranking on the Global Competitiveness Report (EAAB Annual Report 2013/2014; The Global Competitiveness Report 2014–2015). To survive in a competitive business sector, firms seek tools that offer competitive advantage and help in decision-making (Bartes 2014a). CI is widely accepted as offering competitive advantage and help in decision-making (Weiss & Naylor 2010). Though research about CI practice has been conducted in other sectors in South Africa, no such research has been conducted in the property sector. There is a cry to conduct research on CI practice in all sectors of South Africa (Sewdass 2012). The purpose of this research is to establish the practice of CI in the South African property sector.

Many definitions of CI exist in the literature (Weiss & Naylor 2010). Some scholars define CI as a product and some as a process (Brody 2008). Roitner (2008) concludes that CI is both a product and a process. Most of these definitions differ because of a change of words, the use of synonyms and emphasis (Brody 2008). CI practitioners are so busy that they do not have time to define CI (Fleisher & Wright 2009). The existence of so many definitions in the field of CI creates confusion among scholars and practitioners (Colakoglu 2011). Also, it makes CI to be a practice with unstable borders (Haddadi, Dousset & Berrada 2010). Because of a lack of agreement on the definition of CI, it has been confused with industrial espionage (Colakoglu 2011). However, CI is different from industrial espionage because CI is legal and ethical (Haliso & Aina 2012). Having realised the problem of endless definitions, Pellisier and Nenzhelele (2013a) analysed 50 CI definitions to establish commonality and differences in order to propose a comprehensive and universally acceptable definition. Pellissier and Nenzhelele (2013b) define CI as ’a process or practice that produces and disseminates actionable intelligence by planning, ethically and legally collecting, processing and analysing information from and about the internal and external or competitive environment in order to help decision-makers in decision-making and to provide a competitive advantage to the enterprise’. This definition will be used for the purpose of this study.

Managers are paying more attention to CI and as a result there is a growing desire to fulfil CI needs (Barnea 2014; Lin & Yan-Zhang 2015). The end product of CI must satisfy the needs of decision-makers and trigger new intelligence needs (Bartes 2014a; Pinto 2014). In order to have clear, unambiguous and easy-to-understand intelligence needs, there needs to be two-way communication between the CI unit and the decision-makers (Du Toit & Sewdass 2014; Nasri & Zarai 2013). Formal meetings must be organised for CI practitioners and decision-makers to discuss the intelligence needs (Bartes 2014b). Decision-makers have plenty of intelligence needs and these needs must be differentiated from information needs, prioritised and translated into key intelligence topics (KITs) (Bartes 2014b; Degaut 2015; Nasri 2011; Prescott 1999). KITs are those decision-based, strategic issues about which managers must be regularly informed to set and implement strategy (Herring 1999). CI is aimed at answering KITs (Bartes 2014b). According to Herring (1999), only intelligence needs that are of highest priority and key to the success of the organisation must be fulfilled with the scarce resources (Prescott 1999). KITs are established and clearly defined during the planning phase of the CI process (Bulley, Baku & Allan 2014; Yassine 2014). KITs can come from different levels of management such as strategic, functional and tactical (McGonagle & Vella 2012). Quality CI depends on clearly defined and unambiguous KITs (Bartes 2014b; Nasri 2011).

According to Barnea (2014), KITs must cover world competition, tactical and strategic issues instead of just local competition and tactical issues. To gain competitive advantage from CI, KITs must be clearly defined (Barnea 2014). According to Herring (1999), there are three categories of KITs, namely strategic decisions and actions, topics requiring early warning and profiles, and characteristics and descriptions of the key players. Strategic decision and actions include the development of strategic plans and strategies. Early-warning topics include competitor initiatives, technological surprise and government actions. Descriptions of key players include competitors, customers, suppliers, regulators and potential partners.

CI evolves from economics, marketing, military theory, information science and library and strategic management (Deng & Luo 2010; Juhari & Stephens 2006). Governments of countries rely on intelligence for the protection of their citizens (Deng & Luo 2010). Marketing departments of firms all over the world rely on intelligence for marketing, pricing and promotion of their products or services (Nasri & Zarai 2013). Libraries rely on intelligence for quality sources of information for scholars (Fleisher 2004). Strategists rely on intelligence to anticipate and prepare for future competition (Barrett 2010).

CI has been around for longer than the first time it was officially practised in business and recorded in the literature (Juhari & Stephens 2006). Since its inception, CI has been practised by public, private, for-profit, non-profit, large and small organisations. While CI is a relatively new business discipline, CI is evolving in complexity and importance to keep pace with rapid business development (Heppes & Du Toit 2009). Because of its benefits, more organisations are practising CI either formally or informally (Nenzhelele 2012).

Post-apartheid, South African firms have been exposed to global competition (Pellissier & Nenzhelele 2013b). To survive in the midst of global competition, South African firms are practising CI (Du Toit & Sewdass 2014). This is confirmed by Muller (2006) who points out that CI took root in South Africa in the mid-1990s and early-2000s. CI in South Africa emerged from the business sector (Heppes & Du Toit 2009). Although South African firms have been inward-looking, they are starting to realise the importance of CI from year to year (Adidam, Gajre & Kejriwal 2009). De Pelsmacker et al. (2005) point out that enterprises that formally practise CI are growing in numbers and that CI is especially strong in the banking sector, the information technology sector, the telecommunications sector and the electric supply sector. Although CI practice has been widely reported for large organisations, Nenzhelele (2012) establishes that smaller enterprises in South Africa are also practising CI. Although CI practice has been widely reported in South Africa for for-profit organisations, there is lack of report of CI practice on non-profit organisations (Sewdass & Du Toit 2014).

CI is a process or practice, which follows predetermined phases (Du Toit & Sewdass 2014). CI process has been portrayed as a circle to indicate that it is continuous and that the end product of one phase is the input of the next phase (Calof & Skinner 1998). There are influential factors that play a role during the CI process (Bartes 2014a). The CI process is made up of the following steps, which are depicted in Figure 1 (Pellissier & Nenzhelele 2013a).

The property sector of South Africa is an economic enabler and allows upward economic mobility for future generations (EAAB Annual Report 2013/2014). It contributes to job creation, wealth creation, poverty reduction, skills development and quality of life. It is attractive for investors, facilitates inheritance, creates wealth and alleviates poverty (EAAB Annual Report 2012/2013). According to the EAAB Annual Report (2013/2014), the property sector fulfils the constitutional rights of South Africans. The property sector gives South Africans an opportunity to own a home. Moreover, property ownership enables access to capital, creates income streams and a sense of security.

However, since the 2008/2009 economic meltdown, the property sector has been striving to recover (EAAB Annual Report 2010/2011). Many estate agencies have been shut down because of lack of funds to sustain them. Many estate agencies owned by people from disadvantaged backgrounds struggle to survive under these economic conditions (EAAB Annual Report 2013/2014). The National Credit Act has contributed to the slow growth of the property sector due to strict measures to protect consumers from sinking into debt (EAAB Annual Report 2008/2009).

Despite the stringent economic conditions, principal and non-principal agents, firms and attorneys registered with the EAAB have increased leading to a very competitive property sector (EAAB Annual Report 2010/2011; EAAB Annual Report 2013/2014). To remain competitive, more and more property practitioners are listing property on the internet, making it easily accessible and viewable by consumers. There are many websites in South Africa dedicated to listing properties and reporting of property sector trends. Potential consumers login to these websites searching for properties to buy or to let. These websites also allow individuals to list their properties for sale or to let, making them accessible for buyers, lessees or estate agents.

The South African property sector is regulated and controlled by the EAAB (Estate Agency Affairs Act 112 of 1976). The EAAB was established in 1976 in terms of the Estate Agency Affairs Act 112 of 1976. Since 17 May 2012, the EAAB has been relocated from the Department of Trade and Industry to the Department of Human Settlement (EAAB Annual Report 2013/2014). The core mandate of the EAAB remains the following five key regulatory pillars, namely Registration, Education, Inspections and Investigation, Disciplinary and Claims and its industry supervisory role in terms of the Financial Intelligence Centre Act (EAAB Annual Report 2009/2010). According to the EAAB Annual Report 2013/2014, the EAAB regulates and controls activities of estate agents in the public interest. Moreover, the EAAB ensures that all estate agents that service the public are registered. The report indicates that each registered estate agency is issued with a fidelity fund certificate, which is renewable every year and serves as registration evidence. The fidelity fund certificate also confirms that the estate agency is legally entitled to carry out the activities of an estate agency. The EAAB is also mandated to train and educate estate agents. It does so by introducing improved education and training standards and the setting of practical experience requirements (EAAB Annual Report 2013/2014).

The EAAB has started an alliance with other organisations to fulfil its mandates and protect consumers from unscrupulous estate agencies (EAAB Annual Report 2013/2014). According to the EAAB Annual Report 2013/2014, the EAAB works together with the following organisations: Independent Regulatory Board for Auditors, South Africa Institute of Charted Accountants, National Consumer Commission, Financial Services Board, Banking Association of South Africa, Service Sector Education and Training Authority, Black Conveyancers Association and the Financial Intelligence Centre. The EAAB is also a member of the Association of Real Estate Licence Law Officials (ARELLO) and the international organisation of real estate regulators. As a result, the EAAB is able to contribute to the international real estate sector. Its membership to ARELLO makes the EAAB remain in the forefront of the international property sector. Therefore, the EAAB is aware of best practices and puts the South African property sector in a better position in the world property sector. This makes the South African property sector attractive, competitive, secure and safe for international investors (EAAB Annual Report 2013/2014).

According to the EAAB 2008/2009 Annual Report, estate agents perform the following activities or functions:

The research was quantitative in nature, and a web-based questionnaire was used to collect data from the estate agencies. The questionnaire was validated by a group of academics knowledgeable in the field of CI. A 5-point Likert scale was used to establish the level of agreement to statements about competitiveness and CI awareness. The scales ranged from strongly disagree to strongly agree. Contact details of 3878 estate agencies were sourced from one of South Africa’s most popular property websites. Of these estate agencies, 350 were randomly sampled for the purpose of this research. The names of the estate agencies were arranged in a table in Microsoft Word, printed and cut into pieces, which were placed in a basket for a lottery draw. The contact details of the sampled estate agencies were then sourced from the original database. An e-mail was sent to the sampled estate agencies with the link to the web-based questionnaire. By completing the questionnaire, the property practitioners gave consent that their responses may be used for the purpose of the research. For every e-mail that sent back a delivery failure, a new estate agency was sampled to replace it. A total of 242 responses were received, yielding a response rate of 69.14%. Only 239 questionnaires completed were usable. Reminder e-mails were sent to sampled estate agencies in order to increase the response rate. Data were collected over a period of 1 month. The web-based questionnaire was exported to a spreadsheet for analysis. The internal data reliability was calculated to be 0.9129 (Cronbach’s Alpha).

Despite South Africa dropping in ranking in the Global Competitiveness Report, the property sector of South Africa remains competitive. This is evident in the majority of estate agencies agreeing that competition is too high in the property sector of South Africa. When competition is high, firms tend to seek tools that help them gain a competitive advantage over their rivals. It is not a surprise that the majority of the estate agencies agreed that they practise CI in their firms. Moreover, the majority of these estate agencies have been practising for 6 years or more. Therefore, they are experienced in the practice of CI. A larger number of the estate agencies indicated that they practise CI in order to gain competitive advantage. They also practise CI in order to aid decision-making. The majority of the estate agencies locate their CI in the marketing department. Perhaps this is because of the fact that the majority of the estate agencies are small and cannot afford to have a standalone CI department.

While there are ethical issues in the practice of CI, the majority of estate agencies indicated that they practise CI ethically and legally. That means that they do not buy information from employees of other estate agencies or reconstruct papers found in the bins of their competitors because the property sector of South Africa is guided by law and a code of conduct. It might be because of the education and training programmes offered by the EAAB. It could also be because of the consistent inspection by EAAB, punishment of unethical behaviour, whistle-blowing within the property sector or the ethics hotline.

In the process of practising CI, the majority of the estate agencies collect information about their competitors. Such information includes the pricing of real estate. That means that they know how much different properties cost to sell, to let or develop in different locations. The majority of the estate agencies agreed that they interact with the customers of their competitors. These interactions may help in getting useful information to improve their real estate services. Moreover, the majority of the estate agencies indicated that they collect information about the strengths and weaknesses of their competitors. Information about the weaknesses and strengths of the competitors help in strategic planning.

The majority of the estate agencies indicated that they know who their competitors’ suppliers are. This ensures that they get the same or better deal from the same suppliers. They, therefore, will not be spending more than what their competitors are spending for the same supplies. This ensures that resources are saved and invested in strategic areas of business. The majority of the estate agencies collect information from customers, internet and extranet, newspapers and business associates. The customers of estate agencies include buyers, sellers, owners and lessees. All these customers have needs that must be satisfied by estate agencies. It is no surprise that customers are the main source of information for CI. Collected information is then processed and stored for analyses.

The majority of estate agencies agreed that they analyse the information they collected to produce actionable CI. Estate agencies have realised that the analysis phase is the critical success factor of CI and that without the analysis phase, CI does not exist. The majority of estate agencies use teamwork and brainstorming, SWOT analysis and valuation techniques to analyse the collected information. These analysis techniques are widely used in other business sectors. The actionable CI is then disseminated to decision-makers in different levels of the firm. Actionable CI helps in making quality decisions. The majority of estate agencies use face-to-face meeting, e-mails and presentations to disseminate actionable CI.

Although the majority of estate agencies are small and have a low total annual turnover, they have been in operation for many years and have experience in how to survive in a competitive property sector because estate agencies managers support CI practice. Moreover, most estate agencies are managed by owners/managers who are supportive of CI practice. The majority of estate agencies practise CI in-house instead of outsourcing it. Perhaps this is because they are very small and lack the resources to appoint external contractors. It might be that estate agencies do not trust external firms or individuals. It might be that estate agencies want to ensure ethicality and legality in the practice of CI.

Most of the estate agencies have vested interest in the impact of CI on profit. As a result they measure the performance and impact of CI on profit. This helps them decide whether they should continue to invest in CI. Estate agencies are for-profit organisations and, therefore, invest in projects that contribute to profit. Considering that they have been practising CI for many years maybe they have found it to contribute positively towards profit.

Competition is very high in the South African property sector. To survive in this competitive sector, the majority of the estate agencies are practising CI. Regardless of the wide reporting of ethical concerns in CI practice, estate agencies practise CI ethically and legally. They respect the law and code of ethics in practising CI. They are, therefore, able to differentiate between CI and industrial espionage. Estate agencies in South Africa collect information about their competitors such as weaknesses and strength, pricing of real estate, suppliers of competitors and competitors’ customers. Customers are their main source of information for CI. Collected information is stored in internal and external hard drives for further analysis. Considering that the analysis phase is the critical success factor of CI, estate agencies analyse collected information to produce actionable CI. Teamwork and brainstorming, SWOT analysis and valuation techniques are widely used by the estate agencies to analyse collected information. Estate agencies disseminate actionable intelligence through face-to-face meetings, e-mails and presentation. Like firms in other sectors, the majority of estate agencies do not outsource CI practice but prefer to do it in-house. Because estate agencies are for-profit firms, they measure the performance of CI and its contribution to profit. Estate agencies continue to see the value of CI and they have been practising CI to a greater extent for over 6 years.

To remain competitive in a highly competitive property sector, estate agencies in South Africa should continue practising CI. Estate agencies should continue to practise CI ethically and legally as this ensures that CI is respected as a profession. The EAAB and other educational institutions should offer educational programmes in CI. Because they are the main source of information for CI, estate agencies should build good relationships with their customers. Estate agencies should continuously measure the performance of CI to determine its contribution to profit.

Future research should be conducted to determine why estate agencies locate the CI in the marketing/sales department. Furthermore, research must be conducted to determine factors that influence estate agencies to practise CI ethically and legally. Research must be conducted to determine why estate agencies do not outsource CI practice. Further research must be conducted to determine how estate agencies measure the performance of CI. Further research must be conducted to determine tools, techniques and software used by firms in the property sector to practice CI.