Andrew Apcar Greene and Drs. Michael J. Swenson and Paul Dishman, Marriott School of Management
Competitive intelligence is a systematic and ethical program for gathering and analyzing information about your competitor’s activities and general business trends to further your own company’s goals1. When practiced responsibly it’s legal and ethical, although some companies have been known to participate in disreputable activities such as: stealing information, wiretapping phones, and burglarizing offices, among other activities – entering the more shadier realms of industrial espionage.
Most companies don’t participate in such illegal activities because virtually all needed information is available, though sometimes purposely hidden or hard to find. Competitive Intelligence (CI) professionals gather information through general resourcefulness and by employing the latest technology and methods, including satellite photoreconnaissance, combing government databases, examining patent trends, attending tradeshows, benchmarking, filing Freedom of Information Act requests, back-engineering, studying competitors’ websites, reviewing industry reports, studying employment needs, simply speaking with customers and competitors, and even hiring psychiatrists to analyze a competitor’s decision makers.
Competitive intelligence is relatively new and as yet undeveloped among the majority of U.S. Companies. Less than 7 percent of large American companies have their own full-blown competitive intelligence divisions and most of these are relatively new – eighty percent are less than 5 years old. Competitive intelligence can be very beneficial and leads to increased quality, better strategic planning, and a greater knowledge of markets. However, putting a dollar figure on those facets is difficult, if not impossible in many cases.
An ethical company-wide competitive intelligence system must fit a company’s unique culture and structure. Ideally, competitive intelligence is best thought of as a process that is used to make decisions from the largest strategic decision to the smallest tactical move. It’s a process that permeates an entire company. Leonard Fuld, who runs CI consultancy Fuld & Co., recommends that companies meet a series of perquisites before attempting to roll out a comprehensive CI system. First, they should have an intelligence process that has been working effectively for at least two years and has secured a regular line item in the company budget. Second, they should have procedures for gathering “human source” information, such as shared intranet where sales people routinely enter reports for the field. Third, they should have developed a defined set of intelligence reports and resources that employees know how to use and routinely rely on. Finally, companies should have trained analysts that can make sense of the data that’s uncovered.2 Undertaking a CI system is hardly ever a one-person show, the company as a whole, with all its employees on board, is a powerful intelligence team.
I worked the summer of 2000 as a competitive intelligence analyst with a large technology company in an emerging division. I was asked to paint a picture of the market in which this division competed and then illustrate where this division was exactly within that market as broken down by services offered. I decided that the primary judging criteria for the latter was price and time to implement the software application. I was able to glean a great deal of information from press releases and industry reports, nonetheless, there was a considerable amount of information missing for some key competitors. With an expectation to be thorough and complete, I sometimes faced ethical and legal dilemmas as I gathered the needed information.
I spent this summer in Dallas at Efficient Networks in a similar role and was asked to perform an audit of their competitive intelligence practices. I found that Efficient Networks’ 4 major business divisions largely operated autonomously and were already conducting ad hoc competitive intelligence (CI) activities, but in a decentralized manner. To reap the most benefits from these activities and increase company competitiveness and general communicative effectiveness, Efficient Networks needed a systematic program for gathering, analyzing and disseminating information about competitors’ activities and general business trends. Many employees had expressed a need for access to intelligence documents and a centralized information site, especially for field sales executives. I proposed such as system as found in the document in the Appendix titled, “Competitive Intelligence System (Scope Document).” Cost, functionality and ease-of-use were to respectively serve as the primary guidelines for this undertaking, with an emphasis on optimizing existing resources. Also, while at Efficient Networks, I lead sales initiative in Latin America to capitalize on 3Com’s withdrawal from the consumer broadband access market. In a press release dated June 7th of this year 3Com announced it will, “discontinue its line of cable and digital subscriber line (DSL) modems.” Efficient Networks had a line of products that could fill this vacancy among other interesting products and services. From 3Com’s corporate website I was able to glean all of 3Com’s Latin American distributors and began systematically contacting them regarding 3Com’s withdrawal and our desire to conduct business with them – I was able to generate significant sales relationships through this. Such undertakings as these ethically met Efficient Networks’ needs, complied with all applicable laws, and proved profitable.
I learned a great deal through this project and know it will prove an asset to me in my future endeavors. I recognize firsthand the value of business and market intelligence; however, I don’t wish to pursue a profession in the field of Competitive Intelligence. I continue to work independently in this area and appreciate the wages it earns me; nevertheless, I hope to land a position in sales with a successful technology company and plan to bolster and magnify my sales efforts with sound intelligence gathering.
Appendix Competitive Intelligence System (Scope Document)
Purpose: Efficient Networks’ major divisions are already conducting ad hoc competitive intelligence (CI) activities, but in a decentralized manner. To reap the most benefits from these activities and increase company competitiveness and general communicative effectiveness, Efficient Networks needs a systematic program for gathering, analyzing and disseminating information about competitors’ activities and general business trends.
Objective: Have an Efficient Networks Competitive Intelligence System thoroughly defined by July 6th to begin roll out on July 9th and a tentative completion date set for August 31st.
Scope: Many employees have expressed a need for access to intelligence documents and a centralized information site, especially for field Ses. A systematic program for gathering, analyzing and disseminating information about ceompetitors’ activities and general business trends is proposed. Cost, functionality and ease-of-use would respectively serve as the primary guidelines for this undertaking, with an emphasis on optimizing existing resources.
This competitive Intelligence (CI) system will be accessed from the intranet and will be found on the main index bar on the left portion of the intranet screens. The first page will serve as an index to the site, will have a highly targeted news stream (in development with a third party vendor), and provide easy access to important reference material like product info and “How to Sell Against the Competition” and “Product Competitive Review” documents. Accessible from the main page will be a search functionality (that will use software for which we already have licenses) to search existing stores of information throughout the company. There will also be a corresponding posting functionality that everyone can use so information databases are continually updated. (Special attention will be given to accommodate existing divisional operating practices.) Other resources will include an area dedicated to helpful resources and another to competitor and product information. (Through the same third party application, this CI intranet system can have access to Thompson’s Financial Information, patent and SEC information, and more.) It is further proposed that there be organized a type of “rumor mill” functionality, with information from such an area to be followed up on by someone acting in an analyst capacity.
This system will make existing information more accessible, cut down on individual research time and redundant researching, and will otherwise address company needs for better management of product, market and competitive information. This proposed CI system doesn’t, however, eliminate the need for intelligent analysis and presentation of information for practical application. Furthermore, this undertaking will not immediately function as the all-inclusive Competitive Intelligence Solution; however, it will serve as a first step towards a system that will over time evolve to address Efficient Networks’ information management needs.
It is proposed that management of this system be handled by a multi-divisional committee of Efficient Networks employees who are already working in this capacity within their respective divisions. The system will largely function on it’s own, however, strategic and directional management would be conducted by said committee on a regular basis.
Deliverable: A mockup of this system has been developed in a separate PowerPoint Presentation included with this Scope Document entitled, “Efficient Networks, Inc. Competitive Intelligence System.”
References
- Kahaner, Larry. Competitive Intelligence. Touchstone. NY, NY, 1996
- Brekke, Dan. “What You Don’t Know Can Hurt You.” Smart Business for the New Economy. Pgs 64-76. March 2001.