Philip S' Nitse, Ph'D'

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Competitive Intelligence MKTG 475/575 MGT
475/575

• Philip S. Nitse, Ph.D.
• Professor
• Department of Marketing

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How smart can we be?
In a competitive world whose companies have
access to the same data, who will excel at
turning data into information and then analyzing
the information quickly and intelligently enough
to generate superior knowledge? -Max
Hopper, former Chair American Airlines
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How do you really compete?

• Scale is not all positive in this business.
• Cleverness is the positive in this business.
• - Bill Gates, 1993

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Benefits from CI

• Systematic market, industry, competitor analysis
  for understanding and anticipating
• Product, market changes
• Actions of competitors, large and small
• Industry trends (and lessons)
• Acquisition targets
• New technologies, processes, products
• Environmental changes
• Benchmarking

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How do you get to be competitive?

• Out-think and out-perform the competition
• Proactive, offensive actions
• reduce decision uncertainty
• spot new threats
• monitor competitive initiatives
• exploit competitive vulnerabilities

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This CI Class

• Research and Investigation
• Intensive Reading
• Group Projects
• Analysis
• Time 10 hours per week
• You will need to draw upon all your business
  knowledge marketing, management, finance,
  accounting, information
• Professional Preparation course

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Definitions

• Business Intelligence (BI)
• Considers the potential effects of and
  opportunities created by all external elements of
  the business environment
• Competitive Intelligence (CI)
• focuses primarily on current and potential
  competitor-created forces
• Competitive Analysis (CA)
• Analytical process of developing competitive
  information

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Essence of CI

• CI is legally gathering available information
• not James Bond, more like Sherlock Holmes meets
  Bob Woodward
• Systematic, ethical research approach to
  knowledge acquisition
• Virtually everything you need to know is
  available, albeit hard to find
• Collection techniques, analysis mentality,
  decision makers

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The State of the Art

• 12 of Fortune 500 have CI divisions
• 80 less than 10 years old
• Companies dont compete- people compete
• Motorola, NutraSweet, ATT
• Lund, Mercryhurst, U. Pitt., Boston, ISU
• TQM/100 67 wins vs. 18 average- CI
• Baldridge Award Winners 7 of last 10

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• 10,000 members - 4,000 Attendees to Annual
  Conference
• 57 Information vendors
• Company alums Business Intel people
• Membership is highly recommended
• Student dues only 50

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Intelligence Cycle
Planning and Direction
Collection
Analysis
Dissemination
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Planning and Direction

• Clear understanding of user needs, including time
• Collection and analysis plan
• Keep user informed

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Collection

• Types of Information
• Primary Sources
• Annual and financial reports, govt docs,
  speeches, live interviews, observations
• Secondary Sources
• Publications, books, analysts reports, taped
  interviews

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Collection -Public Domain

• Federal
• 10-K, 10-Q, SEC, FOIA, reports
• State
• Articles of Incorporation, UCC
• Media
• Clipping service, local, classified ads
• Trade Associations

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Collection -databases

• Investext
• ABI/Inform
• Dow Jones News Retrieval
• Datatimes
• Newsnet
• Profound

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Collection - Internet

• WWW Home pages
• Business News Groups
• clari.nb.business, clari.biz.mergers
• listserv_at_pucc.princeton.edu
• Usergroups
• Listening posts

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Collection - Humint

• Customers
• Sales personnel
• Trade Shows
• Observation
• Soft Information

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Assessment Questions

• What are we collecting now?
• What are we doing with what we are collecting?
• What should we be doing with it?
• How can we better disseminate this knowledge?

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Analysis - SWOT

• Products
• Finance
• Technology
• People, Organization(s)
• Strategic Alliances
• Manufacturing
• Marketing and Advertising
• Reputation

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Analysis - Techniques

• Patents
• Inventors and Genealogy
• Licensing
• All countries
• War-Gaming

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Dissemination

• Responsive to the problem at hand
• Accuracy, reliability, validity
• Best form of dissemination and usage?
• Push vs. Pull
• Strategic and tactical

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Toshiba

• 1982 - Existing product 16K DRAM
• Market wanted 64K -gt 256K
• 1985 - 1MB with 2x competitive yield
• 1987 - 4MB
• Today - WOW
• How could competitors have known?

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CI Process

• Start with specific projects
• Establish gains from CI
• Instill mentality, cooperation
• Train everyone!
• Reward finders and users
• Establish feeding process

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Summary

• Systematically leverage what is already known
  within the firm We are already doing...
• Very little investment to gain great rewards
• Opportunity to gain short-term good business
• Opportunity to gain long term competitive
  advantage
• Necessary resource for Strategic Marketing
• Provide an involvement-feedback loop for
  sales-marketing-production-engineering
• Enhances the learning of the entire organization
• Creates a sense of constant competition

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Begin class projects

• Group formulation
• Decide on company to investigate
• publicly held
• in dynamic industry
• in competitive economic environment
• you are attempting to predict their strategic
  intent