Competitive Intelligence


Competitive Intelligence What Everyone Needs to Know

Competitive Intelligence Quick Assesment • How many of you have gotten a CI request before? • What did they ask for (just broad view…no company names)? • Follow-up questions? • What did they do with the information you provided? • How long did it take? • What was the outcome of that situation? • What is your general reaction when you hear “COMPETITIVE INTELLIGENCE”?

Recent Requests • Size of Market ($) for flatbreads? • Size of Texas Market (number of units / year) for replacement catalytic converters?

What Everyone Needs To Know • What is Competitive Intelligence and what ISN’T it? • Isn’t that underhanded. Maybe even illegal? • Why do companies need it? What is it for? • Where does Intelligence come from? • What makes “good intelligence”? • It’s not really about competitors.

What is Competitive Intelligence? • Competitive Intelligence: A systematic and ethical program for gathering, analyzing, and managing external information that can affect your company's plans, decisions, and operations. [SCIP.ORG] • Competitive Intelligence is Information that has been analyzed to the point where you can make a decision. [FULD.COM]

Modern Competition (Hollywood)

Popular Views • Industrial Spy – Illegal or at least Shady practices – See what the competitor is planning

• Simple research – All you need is Google / Bing / … – Skilled researchers

CI Ethics and Law • Industrial Espionage Act of 1996 – Makes it illegal to steal Trade Secrets – Primarily targeted at foreign governments, but this isn’t explicit in the law

• If CI is unethical or illegal, then hiring CI people or engaging in CI activities would expose company to civil or criminal liability. • Would the CEO be pleased to read about this activity in the WS Journal or NY Times?

SCIP Code of Ethics for CI Professionals • To continually strive to increase the recognition and respect of the profession. • To comply with all applicable laws, domestic and international. • To accurately disclose all relevant information, including one's identity and organization, prior to all interviews. • To avoid conflicts of interest in fulfilling one's duties. • To provide honest and realistic recommendations and conclusions in the execution of one's duties. • To promote this code of ethics within one's company, with third-party contractors and within the entire profession. • To faithfully adhere to and abide by one's company policies, objectives and guidelines.

Unethical / Illegal CI • 1998-2001 P&G targeted Unilever (hair care products) • 2001 Schwan’s targeted Kraft (frozen pizza) • 2001 Oracle targeted Microsoft (antitrust evidence) • All resulted in legal actions and damaged corporate reputation.

Why Do Companies Need CI? • All business actions entail risk of some sort. • Businesses which base their decisions on analytics have better earnings. • An external (impartial) view can help overcome biases. • CI can – Shed light on marketplace, customers, competitors, suppliers, technology, regs & laws – Provide early warning about changes in the market – Provide insight on motivations and activities of key players – Help protect a company’s own information

• KEY: What will the company DO with the information? • ACTIONABLE

Why Do Companies Need CI

What do you need to know? • You’re a natural gas exploration and drilling company. Are you interested in competitors? Or the latest research (or lawsuits) on the impact of “FRACKING”? • You’re a pharma company with a new painkiller. Are you more interested in the potential competitors? Or regulatory concerns over heart and liver complications of NSAIDs?

The Intelligence Cycle PLANNING & DIRECTION







I need Competitor X’s price list, customer list and tax filings.

I need Competitor X’s price list, customer list and tax filings.

I also need their CEO’s 4th grade report card, her mother’s maiden name and the book report she wrote on “The Lion, The Witch and the Wardrobe” in the 5th grade.

I have an important decision that I need to make.

There are some things I need to understand about Competitor X to help me make those decisions.

Where Does Good CI Come From? • People (HUMINT) – Even after disclosure, significant % of people still interested in talking. PRIMARY INTELLIGENCE – – – –

Asking questions of those who know Trade shows and professional conferences Personal contacts Surveillance

• Published Sources (OSINT) – SECONDARY INTELLIGENCE – – – –

Books, magazines, radio, TV Government agencies Industrial reporting Direct observation

• CREATIVE SOURCES • 3rd Party – Can be either Primary OR Secondary – Paying a subscription or research service – Hiring an investigator

Where Does Good CI Come From • 80% of what you need to know, someone in your company already knows • Whenever money changes hands, information changes hands • Many of your employees CAME from competitors • Need an ongoing program not just one-off – One-off requests with little analysis or follow up are referred to in the industry as STICK-FETCHING.

• Need a comprehensive shopping list / needs analysis • CI is a jig-saw puzzle discipline

The complete picture can only be understood when you have enough of the pieces. Our depth perception is related to triangulation. Additional perspective is needed. We perceive threats when things change. Slow changes are difficult to perceive. One bit of information alone isn’t very helpful.

Evaluating Intel • • • • • • •

Is it true? (confirmation?) Is it current? What impact? What does it prove? Does it fit the picture? What does it mean? Does it provoke more questions?






What Kind of Analysis • • • • • • • • • •

SWOT – Strengths/ Weaknesses/ Opportunities/ Threats Win/Loss – Tracks Wins/Losses in sales bids for factors Five Forces – Competitive / Cost factors Four Corners – Motivation Analysis Financial Profiling – Checking resources/Financial motives Game Theory Decision Maker Profiling War Games – Red Team / Blue Team Patent Analysis LOTS of different models

• WHAT DOES IT MEAN? • WHAT? So What? What now?

Kinds of Intel • • • • • • •

EVERY AREA OF A Human Resources COMPANY THAT Tech Intel Mergers / Acquisitions MAKES OR AFFECTS Financial Intelligence Decision Maker Profiling STRATEGIC Counter-Intel/Security DECISION MAKING Early Warning

Parting Thought • CI is a primary need for all companies. Those who don’t have a dedicated function still do CI, but they do a “seat of the pants” limited version. • CI Skills are useful beyond work duties: – Evaluating your personal investment program – Researching target companies to get a job


Mark Johnson [email protected] Principal Vector Group Services 3800 Acacia Trail The Colony, TX 75056


Competitive Intelligence

Competitive Intelligence What Everyone Needs to Know Competitive Intelligence Quick Assesment • How many of you have gotten a CI request before? • W...

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