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Alessandro Comai (2007) Mission not Impossible - Competitive Intelligence


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Alessandro Comai (2007) Mission not Impossible - Competitive Intelligence

  1. 1. N ot I m p o o n s sib si Mi s Define Your CI Unit Position By Alessandro Comai, University of Pompeu Fabra, Spain le! Actionable competitive intelligence supplies the key • Do they produce marketing or technology intelligence?intelligence and information that provides knowledge • Is the unit positioned at the corporate or departmentabout the external environment and improves the quality of level?senior managers’ decisions. Creating a valuable competitive • How are external and internal sources exploited?intelligence function that meets the various needs of internal • Is the company using any future-oriented models whenclients requires its developer to consider the multiple facets analyzing the environment?of competitive intelligence. Leveraging resources, identifyingkey intelligence priorities, exploiting information sources, Knowing the answers to these questions makes it possiblecreating a culture of gathering and sharing information, to understand which aspects are more suitable for a specificbuilding ethical processes, and applying information all play key roles in any competitive intelligence In addition, all good competitive intelligence programsfunction. have mission statements that are developed and implemented The organization of competitive intelligence programs based on the individual culture and needs of the specificdiffer among firms. In fact, each program reflects the various organization. Mission statements help ensure that thefactors that make it unique. For instance, the company’s competitive intelligence function meets the requirements ofdegree of its globalization, age, size, and culture all influence all its internal clients. These statements drive a strategy forthe development and the resources it invests in CI. But all advancing the competitive intelligence function. This articlecompetitive intelligence programs have similar choices in describes a framework for constructing an effective missioncommon: statement based on six key dimensions.Volume 10 • Number 1 • January-February 2007 SCIP 2007 19
  2. 2. mission not impossible!MISSION STATEMENT BASICS Mission statements represent a clearly defined Dievolutionary strategy for how to develop and advance the mecompetitive intelligence function in an organization (Comai ss n e roc sio :P n62005). Several individuals have developed definitions for the ion1 :Oconcept of competitive intelligence mission statements. For ens Dim bje ctexample, Simon wrote: Dimension 5: Time Span Dime nsion “The mission is a statement of business and 2: Typ e purpose—the fundamental reason for the unit’s e op Di Sc me existence. It is the specific duties or services that a unit 3: on nsi imposes on itself, often reflecting the core values of si on en im 4 managers in an organization.” (1997, p91). : Lo D cat ion Pollard also saw the importance of a mission statement.“The benefit of competitor intelligence can only bemaximized with the right competitor intelligence strategy,which might be summarized in a mission statement.” Itshould include “what intelligence should be produced and for Figure 1: The Six Dimensionswhom, from what sources, and what process” (Pollard, 1999,p 30). There is a fundamental difference between vision andmission. For De Wit and Meyer, In order that an effective Corporate Intelligence Unit is established it is essential that senior [t]he mission outlines the fundamental principles management defines what it is and what it involves guiding strategic choices; a strategic vision outlines the (2001, p91). desired future at which the company hopes to arrive. In other words, vision provides a business aim, while mission provides business principles (2004, p593). THE SIX DIMENSIONS An effective competitive intelligence mission statement Understanding and applying both concepts helps guide incorporates elements that answer the following four keyan individual competitive intelligence function to a world- questions:class level. • What is driving our ideas? • Why does the competitive intelligence function exist?MISSION STATEMENT MODEL • What is the fundamental importance of the function? Competitive intelligence mission statements should • Where does the function operate?be developed according to the needs of the individualorganization. For example, MetLife believes the competitive Under this perspective, thinking strategically about whointelligence function should “provide the right information, and what the competitive intelligence function serves leads toto the right people, at the right time, to make the right an effective mission statement that can be formed around sixdecision” (APQC, 1999, p 80). dimensions (see Figure 1): The model discussed in this article presents a generaloverview of the potential of competitive intelligence as well as 1. Process. Is the CI function systematic, an ad hoc–basedthe “meta objectives” that an organization may adopt to guide project, or a mix between the two?the function. McKenney said, “Clearly stating your objectives 2. Type. How is the CI function managed in theis key for any successful implementation” (2005, p12). organization? A mission statement defines the aims of the competitive 3. Scope. At which level of the organization is the CIintelligence function and its future achievements. It also function’s focus located?represents a guideline for allocating resources and capabilities. 4. Location. Which department is involved in CI?To develop an effective mission statement, create a steering 5. Time span. How future-oriented is the CI function?committee and involve senior managers in the project at an 6. Object. What kind of key actors does the organizationearly stage. According to Trim: follow?20 SCIP 2007 Competitive Intelligence Magazine
  3. 3. mission not impossible!1. PrOCESS Centralized competitive intelligence functions typically The process dimension describes the degree of the have a single person to set priorities, assign resources,competitive intelligence function’s formalization within and make decisions such as purchasing and organization. The more systematic the function, the Decentralized organizations assign intelligence responsibilitiesmore formalized it will be. Process is often related to the close to the division decision makers. More than one personfrequency of defining needs and collecting, analyzing, and often sets priorities, assigns resources, and makes decisions.distributing intelligence to decision makers. Fahey and In diffused or hybrid structures, some activities areKing (1977) defined three types of competitive intelligence centralized and others are decentralized. For instance,processes: collection activities and analysis of information regarding technology or markets can be managed by the departments. • Irregular, involving ad hoc studies In contrast, the management of the access to the intelligence • Regular, including periodically updating studies intranet or web is centrally developed. • Continuous Generally speaking, competitive intelligence activities 3. SCOPEcan be performed from three primary approaches: An organization has three main decision-making levels: the tactical or operational level, the business unit level, • Spot. Intelligence is required and supplied on an and the corporate planning level (Fleisher and Bensoussan, irregular basis. Typically no staff is dedicated to the 2002). Each level generally has a specific group of decision competitive intelligence function. makers, and each often requires a different type of • Project. Competitive intelligence activities are performed competitive intelligence. Whether a CI group provides any upon specific corporate or decision-maker request and one or a combination of these decision supporters is heavily must be achieved within a fixed period of time. CI is influenced by where the unit resides in the organization and often supervised by specialized staff. where the CI champion is. • Systematic. Competitive intelligence involves ongoing For instance, a telecommunications company placed scanning of the environment, information analysis, and a new competitive intelligence function at the corporate distribution of intelligence throughout the organization. level where the CI champion was located, while a rubber It generally includes a variety of intelligence products, tire company leveraged tactical intelligence from the sales each of which can have a specific time frame (Prescott department. Other CI functions have been managed by the and Williams, 2003). marketing group. A tactical orientation focuses on achieving a short-term Several studies have treated this issue as a major factor bottom-line impact. Thus, tactical competitive intelligencefor distinguishing formal versus informal scanning or is valuable for line-level personnel, such as brand managers,intelligence processes. Ghoshal’s study revealed that a formal who can better understand the product, markets, orscanning activity has the systematic process of gathering and competitors.distributing information as well as having a formal structure Business unit–level competitive intelligence primarilyand personnel dedicated to the scanning behavior (Ghoshal, benefits intermediate management positions in the company,1985). Other authors suggest the need for a formal system. such as business unit directors. Competitive intelligenceFor instance, Hirschhorn from MetLife considers it very programs can typically help midlevel managers by analyzingimportant to “have a formal process and to ensure that that the entire business portfolio, or by providing deep-diveprocess is documented” (Hirschhorn, 2004). analyses of company products, corporate capabilities, or potential new markets.2. TyPE Practitioners widely advocate the importance of Companies today have many organizational models, supporting the strategic perspective for competitiveand the competitive intelligence function must adapt its intelligence. This perspective provides the CI function withoperations to the current structure in use. Generally speaking, the long-term view about the business. It also allows thethere are three commonly adopted major classifications for function to anticipate key trends, detect opportunities andthe competitive intelligence function: threats in the sector, and plan a warning system. Specific companies primarily allocate competitive intelligence • Centralized (APQC, 2000, p 77; McGonagle and Vella, resources to the strategic decision-making process. 2003, p 31–32), Strategic-level intelligence is particularly valuable to • Decentralized (McGonagle and Vella, 2003, p 31–32) senior managers and it contributes to more effective decision • Diffused or hybrid (Fuld, 1995, p 420–422) making. One example of strategic intelligence is the analysisVolume 10 • Number 1 • January-February 2007 SCIP 2007 21
  4. 4. mission not impossible!of non-market forces, such as governments, interest groups, • The players or actors (also defined as stakeholders),activists, or the general public, as potential variables to be including current and potential rivals, suppliers, clients,managed at the corporate level. customers, associations, governments, lobbyists, and others. • The factors or key trends that characterize the broader4. LOCATION environment (Comai 2006). Location relates to the area of competitive intelligencespecialization, or the primary support role of the function. Some competitive intelligence functions are focusedThere are several options for locating the CI function on competitor intelligence, which involves the collection,within the organization. Fuld (1988) identified up to 16 analysis, and dissemination of intelligence on today’sdepartments that work with different types of information opponents. It is often the primary deliverable of the CIand therefore are potential consumers (and contributors) of function in cases in which it takes top priority.intelligence. The three most common locations are reviewed Other organizations, however, have their competitivebelow. intelligence functions monitor other actors, including Marketing intelligence can supply intelligence on consumers and other stakeholders (such as suppliers orcompetitive sales, advertising, market share, or competitor regulators), or scan the general landscape. Freeman suggestedstrategy. A recent SCIP survey showed that marketing or this monitoring could include “any group or individualmarket research is one of the most frequent locations for the who can affect or is affected by the achievement of thecompetitive intelligence unit (CI Foundation, 2006). organization’s objectives” (Freeman, 1984). Technical intelligence refers to the dominant use of On the other hand, key trends are other sources ofscience in business where technology is applied in the information about the broader environment. Analyzing trendsproduction process or the product. Technical intelligence of a particular business as well as the whole industry helps totypically includes the analysis of patents and other anticipate changes of actors, products, technology, or laws thattechnological, engineering, or scientific sources. Technical may have a significant impact on the company activity.competitive intelligence focuses on identifying technologicaltrends, opportunities, and threats, mostly for research anddevelopment departments. SIMILArITIES AND DIFFErENCES Financial intelligence is most common in organizations These six dimensions show several options for definingthat are bottom-line oriented or companies that are a competitive intelligence function, and a myriad of possiblesignificantly affected by a few largely financial transactions. CI configurations. They also point to significant differencesExamples of companies that make heavy use of this type of in the way an organization can structure and operate itsintelligence are those involved in the financial industry. These competitive intelligence operations.organizations often require a specialized type of analysisoriented around financial information.5. TIME SPAN Di m The time span characteristic refers to the length of time ss en e roc sioin which information used by the competitive intelligence Mission 2 :P n n1 6: iounit remains valuable. Short-term information such as ens O Dim bjemarket share and competitor prices supports an immediate ctneed, but does little to prepare for the future. Conversely, Mission 1long-term or future-oriented competitive intelligence Dimension 5: Time Spanis prospective and anticipates the coming environment. Dime nsionBetween those extremes, medium-term information assists 2: Typ e e op Dimwith decisions that will affect the next quarter or next year. Sc 3: ens n sio ion en m 4: L6. OBjECT Di oc at This dimension involves the competitive intelligence ionresearch topics. Two main groups of topics are associatedwith the company’s environment: Figure 2: Dimensions and Missions22 SCIP 2007 Competitive Intelligence Magazine
  5. 5. mission not impossible! Despite these differences, there are similarities in some Competitive Intelligence Foundation (2006). State of the art:dimensions across industries. For instance, pharmaceutical Competitive intelligence. SCIP, Alexandria, VA.companies typically spend significant resources on technical De Wit, Bob and Meyer, Ron (2004). Strategy. process,intelligence, while defense and aerospace companies tend content, context. 3rd edition. Thomson Learning,to be strategic and oriented toward up-front intelligence. A conducted by Comai, Wheeler, and Prescott (2005) Fahey, Liam and King, W. R. (1977). Environmental scanningshowed that world-class competitive intelligence functions for corporate planning. Business Horizons 20(4): 61–71.tend to have some common objectives that are independent Fleisher, Craig S. and Bensoussan, Babette (2002). Strategicto the industry. and competitive analysis: Methods and techniques for An organization can effectively define where to invest the analyzing business competition. Pearson Education,resources to develop its competitive intelligence function if Prentice knows the differences and similarities between the various Freeman, R.Edward (1984). Strategic management: Aways to focus its competitive intelligence function. It also stakeholder approach. Pitman, Boston.assists in defining CI priorities within the company and the Fuld, Leonard (1988). Monitoring the competition. John Wileydifferent dimensions that can be developed during that time. & Sons, New York. Based on the six dimensions, the mission statement Fuld, Leonard (1995). The new competitor intelligence:crystallizes the option that an organization has chosen for its The complete resource for finding, analyzing, and usingcompetitive intelligence function. It allows the organization information about your competitors. John Wiley & Sons,to not only communicate the focus for the current situation, New York.but also determine the future of the CI function. Figure 2 Ghoshal, Sumantra (1985). ‘Environmental scanning: Anshows how a mission can evolve by using the six dimensions individual and organizational level analysis.’ two different periods of time. dissertation, M.I.T. (Sloan School of Management), Cambridge, MA. Hirschhorn, B. (2004). Building a CI Process that drivesAPPLyING THE SIX DIMENSIONS business success. Paper presented at SCIP04 conference, When starting or revamping a competitive intelligence Boston.function, involved parties should consider these six McGonagle, John J. and Vella, Carolyn M. (2003). Thedimensions and how they apply to their particular manager’s guide to competitive intelligence. Praeger,environment. Constructing the function around these Westport, CT.dimensions will help to define the most effective competitive McKenney, Peter (2005). ‘CI in action: Key steps to buildingintelligence function within the organization. an internal CI function.’ Competitive Intelligence Considering the six dimensions will also provide Magazine 8(6): 10–13.a framework for developing an effective competitive Pollard, Andrew (1999). Competitor intelligence. Financialintelligence mission statement. Establishing and following Time Management, London.a mission statement ensures that the CI function meets the Prescott, John and Williams, R. (2003). ‘User-drivenneeds of internal clients and provides actionable intelligence CI: Crafting the value proposition crafting the valueto the organization’s decision-making process. proposition.’ SCIP annual meeting presentation, Anaheim, CA. Simon, Neil J. (1997). Steps to establish (or improve) a CIrEFErENCES unit. Competitive Intelligence review 8(1): 90–92.APQC (American Productivity and Quality Center) (1999). Trim, P. (2001). ‘A framework for establishing and Strategic and tactical competitive intelligence for sales and implementing corporate intelligence.’ Strategic Change marketing. American Productivity and Quality Center, 10(6): 349–357. Houston, TX.APQC (2000). Managing developing a successful competitive program. APQC, Houston, TX.Aguilar, Francis J. (1967). Scanning the business environment. Collier-Macmillan Canada, Toronto. Alessandro Comai is a Ph.D. candidate at ESADE andComai, Alessandro., Wheeler, R., and Prescott, John (2005). associate professor at the University of Pompeu Fabra (Spain). ‘Establishing a world-class CI capability.’ Paper presented He is currently the director of PUZZLE the Spanish CI at the SCIP05 conference, Chicago, IL. magazine ( and he owns a consultingComai, Alessandro. and Tena Millán, J. (2006). Mapping company specialized in CI. You can contact him at: alessandro. and anticipating the competitive landscape. EMECOM Ediciones, Barcelona, Spain.Volume 10 • Number 1 • January-February 2007 SCIP 2007 23