Marketing Management Competitive Intelligence

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Marketing Management Competitive Intelligence

• Paul Dishman, Ph.D.
• Department of Business Management
• Marriott School of Management
• Brigham Young University
• Lecture 6

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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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How do you get to be clever?

• 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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What is Competitive Intelligence?
Competitive Intelligence is a systematic
ethical program for gathering and analyzing
information about your competitors
activities and general business trends to further
your own companys goals.
Larry Kahaner, 1996
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Definitions

• Business Intelligence (BI)
• Intelligence created by information from all
  external and internal elements of the business
  environment
• Competitive Intelligence (CI)
• Intelligence created by information which
  provides competitive advantage
• Competitive Analysis (CA)
• Analytical processes to develop competitive
  intelligence for strategic decisions

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Essence of CI

• CI is the multi-disciplinary business function of
  legally gathering available information about
  competitors
• Systematic, ethical research approach to
  knowledge acquisition
• Industrial, company, individual research
• 80 of information is available, albeit hard to
  find
• Collection techniques and analysis techniques

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Applications of CI

• Systematic environmental scanning or specific
  research including market, industry, competitor
  analysis for
• Product, market changes
• Actions of competitors
• Industry trends (and lessons)
• Acquisition targets
• New technologies, processes, products
• Environmental changes
• Benchmarking

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Where does CI fit in the Firm?

• Business Intelligence
• Company Intelligence
• Competitors
• Customers
• Suppliers
• Business Relationships
• Market Intelligence
• Technical Intelligence
• Intelligence on Individuals
• Environmental Intelligence

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Company Orientation
Customer-centered
NO
YES
Product Orientation
Customer Orientation
NO
Competition- centered
Competitor Orientation
Market Orientation
YES
Narver Slater, 1990 Kim Mauborgne, 1997
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Company Orientation
Customer-centered
NO
YES
Product Orientation
Customer Orientation
Market Research
NO
Competition- centered
Competitor Orientation
Market Orientation
YES
Narver Slater, 1990 Kim Mauborgne, 1997
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Company Orientation
Customer-centered
NO
YES
Product Orientation
Customer Orientation
Market Research
NO
Competition- centered
Competitive Intelligence
Competitor Orientation
Market Orientation
YES
Narver Slater, 1990 Kim Mauborgne, 1997
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Where does CI fit in the Firm?
Competitive Intelligence
Environmental Research - legal/political -
competitive - demographic - etc.
Competitor Intelligence
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Business Intelligence Model
Legal Illegal
Competitive Industrial Intelligence Espionage Cou
nter- other Illegal intelligence Acts
Intelligence Acquisition Intelligence Protection
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What is the CI Function and Process?
KNOWLEDGE
Compile
Analyze
DATA
INFORMATION
COLLECT
Communicate
DECISION
RESULTS
Apply
Act
INTELLIGENCE
Decision maker
Wilson and Powell, 1994.
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Roles within the CI Model
SystemBuilders
Protectors
Integrators
Decision-makers
KnowledgeBuilders
Secondary
Analysts
Primary
Researchers
DataBuilders
Prescott, 1994
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The State of CI in Industry

• 11 of Fortune 500 have CI divisions
• 80 less than 5 years old
• PG, Cisco, Motorola, Shell, ATT, Lucent, Dow,
  Kodak, 3M, Quest
• Baldridge Award Winners 7 of last 10
• 13 universities in US including
• Wharton, UCLA, U. Pitt., Drexel, AGSIM, Indiana,
  Rutgers, Mercryhurst, Idaho State, BYU

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Who is in CI?
Type
Work in
Doing
Ad Hoc requests (50) to
Practitioners
A corporation
tracking (50)
76.8
Vendors or
Strategy applications of
Independent consultants or
Consultants
developed CI on project
consulting practice
17.5
subscription basis seminars
Teaching research methods.
Academics
A university or college
Authoring books in CI
2.1
business. Project consulting.
Students
A university or college
Full-time studies.
3.6
Based on the membership of the Society of
Competitive Intelligence Professionals
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Intelligence Cycle
Planning and Direction
Collection
Analysis
Dissemination
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Planning and Direction

• What is the problem?
• 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
• Now and later
• Easy vs. difficult
• Public vs. private

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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
• Any Others? Usergroups? Listening posts?

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Sources of CI (by extent of use)
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Analysis Techniques

• SWOT
• Competitive Analysis Models
• Comparative Relationships
• Financial Modeling
• Patent Genealogy
• War Gaming (Peace Gaming)

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Analysis

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

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Dissemination

• What is the decision to be made?
• Accuracy, reliability, validity
• Best form of dissemination and usage?
• Push vs. Pull communication
• Strategic and tactical

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CI Checklist

• 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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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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Case Toshiba

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

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No James (or Jaimie) Bond

• UTSA defines trade secret as
• not generally known, valuable because of its
  secrecy, gives a competitive advantage
• No Company Confidential anything
• Marketing Plans, Schematics, Rolodex, business
  cards
• Do not spy
• All pertinent state and federal laws apply (UTSA)
• Economic Espionage Act of 1996
• 500K, 10 years, 5M

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• 7,000 members - 2,000 Attendees at Annual
  Conference
• 157 Information vendors
• Company alums Business Intel people
• Seattle, WA March, 2001
• www.scip.org

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SCIP Overview

• Educational seminars academic conferences
• Refereed journal of competitive business
  strategies (Competitive Intelligence Review), a
  quarterly magazine of CI issues (Competitive
  Intelligence Magazine) a monthly Actionable
  Intelligence newsletter a Membership Directory
• Supports the research publication of materials
  on competitive business strategy.
• 50 world-wide chapters, affiliates

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• Competitive Intelligence Review
• Recent articles
• Application of Statistical Process Control to
  Competitor Benchmarks
• Technology Mapping, Business Strategy, and
  Market Opportunities
• Competitive Intelligence Through Neural
  Networks
• Simulation to Analyze and Develop Competitive
  Strategies
• Disinformation in Corporate Communications

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For more info
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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 Planning
• 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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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
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Closing

• Questions