Role of Competitive Intelligence in Effective Decision Making

1
Role of Competitive Intelligence in Effective
Decision Making

• How to Gather, Analyze, and Use
• Information to Achieve Excellence!

2
Agenda

• Four levels of competition
• Competitive intelligence
• What competitive intelligence can do for
  companies
• Why companies need competitive intelligence
• Why companies dont use competitive intelligence
• The intelligence cycle

3
Four levels of Competition

• Brand Competition companies offering a similar
  product and services to the same customers at
  similar prices.
• Industry Competition companies in the same
  product or class of products. E.g., Honda
• Form Competition companies manufacturing
  products that supply the same service. E.g.,
  Honda
• Generic Competition companies that compete for
  the same consumer dollars.

4
Noble Thoughts

• What enables the wise sovereign and the good
  general to strike and conquer, and achieve things
  beyond the reach of the ordinary men, is
• Knowledge is

5
Competitive Intelligence

• Competitive intelligence is a systematic program
  for gathering and analyzing information about
  your competitors activities and general business
  trends to further your own companys goals.
• The cornerstone of successful companies is
  knowledge!

6
What Competitive Intelligence Can Do for
Companies

• Anticipate changes in the marketplace
• Failure of American automakers in the 1970s.
• Anticipate actions of competitors
• Verizon versus Metrophone Cellular phone systems
• Kodak versus Fuji
• Discover new or potential competitors
• Access Intel Analysts -- Top 10 interesting
  companies
• Learn from the successes and failures of others
• Wal-Mart is indebted to Sears and JCPenneys

7
Why Companies Need Competitive Intelligence Now
More Than Ever

• The pace of business is increasingly rapid
• Information overload
• Increased global competition from new competitors
• Existing competition is becoming more aggressive
• Political changes affect us quickly and forcefully

8
Why Companies Dont Use Competitive Intelligence

• Nothing goes on in this industry that I dont
  already know about
• Nothing goes on outside this company or outside
  this country thats worth watching.
• Competitive intelligence is spying. Its
  unethical.
• American CEOs are financial in nature and not
  technical in nature.
• Competitive intelligence is a cost center, not a
  profit center. Its too expensive to implement a
  program.

9
Quantifying the Benefits of C I

• Effects of C I are
• C I leads to
• increased quality
• better strategic planning
• greater knowledge of markets
• early warning signs
• better capitalization of opportunities

10
The Intelligence Cycle

• Planning and Direction
• What intelligence does the company require?
• Collection
• Creative collectors can usually find most
  anything they need legally and ethically.
• Analysis
• Most difficult part -- weigh information, look
  for patterns, and come up with different
  scenarios.
• Dissemination
• Recommend and defend actions based on logical
  arguments.

11
Collection

• Types of Information
• Primary sources Annual reports, Government
  documents, Speeches, Live TV and Radio
  interviews, Company financial reports, Personal
  observations
• Secondary sources Newspapers, Magazines, Books,
  Taped and edited TV and radio programs, Analysts
  reports
• Easy versus Difficult
• Coors vs. Anheuser Busch
• Japanese Paper plant in Georgia

12
Analysis

• Analysis is the process of taking
  information--often seemingly unconnected
  information--and turning it into intelligence.

13
Summary of Analytical Methods

• Strategic Analytical Techniques
• BCG growth/share portfolio matrix
• GE Business screen matrix
• Industry analysis
• SWOT analysis
• Value chain analysis
• Environmental Analysis
• Scenario analysis
• Stakeholder analysis
• Macroenvironmental analysis

• Competitive and Customer Analysis
• Blind-spot analysis
• Competitor profile analysis
• Customer segmentation analysis
• Management profiling
• Evolutionary Analysis
• Experience curve analysis
• Growth vector analysis
• Patent analysis
• S-Curve analysis

14
SWOT MATRIX of Competitor A
Internal Factors Strengths (S) Weaknesses
(W) 1. Best technology 1. No management
depth External Factors 2. Skilled workforce 2.
Spotty distribution Opportunities (O) SO
Implications WO Implications 1. Demographics
favor 1-1 Keep technology 2-1 Must satisfy
growing product consumption current
market segment to 2. Failing of other 2-2
Might hire skilled remain competitive
Competitor B workers from B Threats
(T) ST Implications WT Implications 1. Possible
regulation 1-1 Might have to share 1-1 Management
may not technology to avoid be
able to thwart regulation
regulation 2. Growing of 2-2 Keep current 2-2 C
may take market Competitor C workforce
satisfied share away
15
Name of the game

• If a little knowledge is dangerous, where is the
  man who has so much to be out of danger.
• - Thomas Huxley
• It is pardonable to be defeated, but never to be
  surprised !
• - Frederick the Great
• If you can anticipate the competitions next
  moves, you can outthink and outperform them.
• - Ava Youngblood