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  • C.I. is a permanent and iterative process, following the steps shown. So, the first thing to establish is the information required AND what it will be used for……the process of gathering, storage , and analysis of the available information is focussed on supplying the answers needed to facilitate decisions and then action. During the cycle, feedback is crucial to fine tune the intelligence process, i.e. defining the info required is needed not only in the initial stage but must be reviewed continually taking into account the information gathered and the new representation of the world it provides. One of the challenges is to transform the mass of data into information, then knowledge and then intelligence. It only becomes intelligence when you can perform an action.
  • The risk of making critical decisions based on an incomplete understanding of the competitive environment is higher, because the insights are based on information that reflects only one perspective (e.g., Sales Department using their own ‘silo’ of information within SFA software or Purchasing and Distribution managers using information only from their SCM software, etc.). And, The entire company is denied the valuable insight that comes from having a comprehensive, multi-dimensional picture of their competitive environment (e.g., drawing key information from the Sales perspective, research gathered by Marketing, data compiled by Finance, analysis contributed by the Competitive Intelligence unit, insights from Customer Service and so on results in a more textured and thorough picture of the competitive environment). Deliberately managing information for Competitive Affairs moves an organization to the preferred upper right quadrant, as illustrated below. Figure 4.
  • Using information across departments creates a more textured, complete picture Systems with greater potential for company-wide use, such as Knowledge Management (KM) or Business Intelligence (BI), attempt to coordinate information across the functional silos; however, as addressed earlier in this paper, such systems are often so broad in scope that their purpose can be difficult to understand or the output is valued and used only by a select group of analysts or top executives. Business professionals are asking for specific Competitive Affairs tools.
  • In summary, the bottom line is clear: Increase Marketing effectiveness. Increase Sales revenue while reducing cost of sales. Ensure a ‘first to market’ position for new technologies. Prevent theft of the company’s intellectual property. Focus time and resources on strategies that take advantage of real opportunities in the market. Capture the full value of the company’s information assets (use and reuse it in many forms to its fullest). Create a history of ‘knowledge’ in the company about the competitive environment that won’t disappear if one or more key employees leave the company. Evidence of Competitive Affairs activities is everywhere. Traditional Market researchers are now seeing the need to paint a conceptual map relative to competitors, and then apply that information in very specific, tactical ways.

7steps Presentation 2010 7steps Presentation 2010 Presentation Transcript

  • steps to effective Competitive Intelligence
  • Competition
    • “Competition has always been central to the agenda of companies…..indeed, competition has become one of the enduring themes of our time”
    • -Michael Porter, Harvard Professor, on why competitive strategy is still so widely read.
  • What is Competitive Intelligence?
    • 2 nd oldest profession:
    • Bible, Numbers 13: 17,
    • “ Moses sent 12 men to spy out the land of Canaan (to) see what the land is, and whether the people who dwell in it are strong or weak, whether there are few or many…..and whether the cities they dwell in are camps or strongholds”
  • What is it?
    • SCIP definition:
    • “ a systematic and ethical programme for gathering, analysing and managing external information that can affect your companies plans, decisions and operations”
  • What is Competitive Intelligence?
    • information about other businesses that may have a significant impact on your business
    • direct competitors that you encounter on a daily basis
    • indirect competitors who offer a substitute product
  • The 2 Cs’ AIM Strategic Management Limited ©2010 Most organisations readily “track” internal metrics (business Intelligence) and their customers
  • The 3 Cs’ AIM Strategic Management Limited ©2010 But miss the opportunity to track their competitive environment
  • How is it Different from B.I. & K.M.? AIM Strategic Management Limited ©2010 Business Intelligence Knowledge Management Competitive Intelligence Internal Focus Internal focus External focus Key operational data Store of ALL data sources Strategic and tactical Typically ‘dash board’ updates for senior execs All staff Used by all levels of staff Used to benchmark/improve internal processes Can be so generic that people struggle to use Wide range of info for tactical and strategic use
  • Why is Competitive Intelligence important?
    • evaluate your performance
    • identify (& exploit) competitors weaknesses
    • address competitor strengths
    • support decision making
    • risk management
    • innovate
    • identify new customers and segments
    • keep business planning focussed
  • Why is it important?
    • “ If you know your enemy and yourself; you will win every battle.
    • If you know yourself, but not your enemy; for every battle won you will suffer a loss.
    • But if you are ignorant of your enemy, and yourself;
    • You are a fool and certain to be defeated in every battle.”
  • Intangible benefits
    • reduce complacency and improve discipline
    • foster a culture of change
    • respect that competitors have satisfied customers and reasons for it
    • recognition that your business must continually improve
  • The C.I. Cycle
  • What you need to know
    • who are your competitors?
    • what do they offer?
    • what is their pricing policy?
    • who are their customers?
    • how do they promote themselves?
    AIM Strategic Management Limited ©2010
  • What you need to know
    • who are their suppliers?
    • how financially secure are they?
    • what kind of organisation are they?
    • what are their strengths and weaknesses?
    • what is their strategy?
    AIM Strategic Management Limited ©2010
  • What you need to know
    • economic trends
    • industry trends
    • legislation
    • media
    • M & A Activity
    AIM Strategic Management Limited ©2010
  • Ethics (http:// www.kiplinger.com )
    • a CI program must be subject to two types of rules - those based on law ……………
    • Economic Espionage Act 1996 (USA) – Guidance
    • ……………… .and those based on ethics
    • ethics are more of a personal perspective and interpretation
    • CI practitioners should not misrepresent themselves
    • do not hire a third party to do what you will not
    • do not ask for information that you know to be proprietary or otherwise restricted
    AIM Strategic Management Limited ©2010
  • Ethics (http://www.kiplinger.com)
    • what about hiring people from your competitors? This is almost always legal and also very common
    • leveraging the knowledge of employees hired from competitors is a CI "best practice“
    • has to be done under a strong legal and ethical framework
    • avoid knowingly asking a new hire from a competitor a question that would cause him/her to reveal confidential information
    AIM Strategic Management Limited ©2010
  • Storage
    • Collection of data is often fragmented, information is often captured (and not shared) in specialised silos…..this leads to two problems:
    • risk of making critical decisions based on incomplete information
    • the entire company is denied the insight that comes from having a comprehensive, multi dimensional picture of their competitive environment
  • Storing and Sharing AIM Strategic Management Limited ©2010
  • What you should do!
    • decide what information you need about your competitors, don’t try and do everything!
    • it takes too long and you spend more time analysing than actioning
    • decide where you will get the information from
  • What you should do!
    • Work out where you will get the information from, there are Three main sources:
    • what competitors say about themselves
    • what others say about them
    • research to meet your specific needs
    AIM Strategic Management Limited ©2009
  • Sources – What competitors say about themselves
    • sales literature
    • advertisements
    • mail shots
    • press releases
    • exhibitions
    • web sites
    • company accounts
    AIM Strategic Management Limited ©2010
  • Sources – What others say about your competitors
    • customers
    • directories
    • internet search (Google news - blogs)
    • market research companies (e.g. Keynote reports)
    AIM Strategic Management Limited ©2009
  • Sources- Research for your specific needs
    • your organisation
    • market research agencies
    • specialist C.I. consultant
    AIM Strategic Management Limited ©2009
  • Sources -
    • www.exhibitions.co.uk
    • www.marketresearch.com (50,000 publications)
    • www.alexa.com
    • www.britishservices.co.uk/associations.htm
    • www.keynote.co.uk
    • www.mintel.co.uk
    • www.ft.com (archive search)
    • www.companieshouse.co.uk
  • R.O.I. from Competitive Intelligence
    • increase revenue by making more sales
    • increase revenue on a per sales basis
    • reduce cost and increase efficiency of research
    • reduce customer attrition
  • Ignoring Competitive Affairs hurts the bottom line
    • inattention to C.I. in the sales process leads to price cutting
    • effective R&D efforts require diligence in trying to develop an understanding of the R&D activities of competitors
    • legal departments responsible for protection of an organisations intellectual property
  • C.I. is the next logical step in productivity
    • In summary, the bottom line is clear;
    • increase marketing effectiveness
    • increase sales revenue while reducing the cost of sales
    • ensure a ‘first to market position’ for new technologies, prevent theft of the companies I.P.
    • focus time and resources on strategies that provide best advantage
    • create a history of knowledge in the company
  • Read more?
    • CETISME (2002) Economic Intelligence. A guide for beginners and practitioners. Commission of the European Communities
    • D. Burkhart (2003) Competitive Intelligence – Acquiring and using corporate intelligence and counter intelligence: Prentice Hall
    • Porter M.E. (1980) Competitive Strategy: Techniques for analysing industries and competitors: Free Press
    • Flesiher C.S. & Bensoussan, B.E. (2002) Strategic and Competitive Analysis: Methods and techniques for analysing business competition. Prentice Hall