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Marketing Management Competitive Intelligence

Marketing Management Competitive Intelligence. Paul Dishman , Ph.D. Department of Business Management Marriott School of Management Brigham Young University Lecture 6. How do you really compete?. “Scale is not all positive in this business. Cleverness is the positive in this business.”

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Marketing Management Competitive Intelligence

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  1. Marketing ManagementCompetitive Intelligence Paul Dishman, Ph.D. Department of Business Management Marriott School of Management Brigham Young University Lecture 6

  2. How do you really compete? “Scale is not all positive in this business. Cleverness is the positive in this business.” - Bill Gates, 1993

  3. 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

  4. 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 company’s goals.” Larry Kahaner, 1996

  5. 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 competitiveadvantage • Competitive Analysis (CA): • Analytical processes to develop competitive intelligence for strategic decisions

  6. 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

  7. 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

  8. 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

  9. Company Orientation Customer-centered NO YES Product Orientation Customer Orientation NO Competition- centered Competitor Orientation Market Orientation YES Narver & Slater, 1990 Kim & Mauborgne, 1997

  10. 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

  11. 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

  12. Operations Research - production - audits - benchmarking - etc. Technical Research - R&D - IP - competitors - etc. Company Research - suppliers - customers - competitors - relationships Market Research - products - customers - competitors - etc. Where does CI fit in the Firm? Competitive Intelligence Environmental Research - legal/political - competitive - demographic - etc. Competitor Intelligence

  13. Business Intelligence Model Legal Illegal Competitive Industrial Intelligence Espionage Counter- other Illegal intelligence Acts Intelligence Acquisition Intelligence Protection

  14. What is the CI Function and Process? Compile Analyze KNOWLEDGE DATA INFORMATION COLLECT Communicate DECISION RESULTS Apply Act INTELLIGENCE Decision maker Wilson and Powell, 1994.

  15. Roles within the CI Model SystemBuilders Protectors Integrators Decision-makers KnowledgeBuilders Secondary Analysts Primary Researchers DataBuilders Prescott, 1994

  16. The State of CI in Industry • 11% of Fortune 500 have CI divisions • 80% less than 5 years old • P&G, Cisco, Motorola, Shell, AT&T, 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

  17. 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

  18. Intelligence Cycle Planning and Direction Collection Analysis Dissemination

  19. Planning and Direction • “What is the problem?” • Clear understanding of user needs, including time • Collection and analysis plan • Keep user informed

  20. Collection • Types of Information • Primary Sources • Annual and financial reports, Gov’t docs, speeches, live interviews, observations • Secondary Sources • Publications, books, analysts’ reports, taped interviews • Now and later • Easy vs. difficult • Public vs. private

  21. Collection - Public Domain • Federal • 10-K, 10-Q, SEC, FOIA, reports • State • Articles of Incorporation, UCC • Media • Clipping service, local, classified ads • Trade Associations

  22. Collection - databases • Investext • ABI/Inform • Dow Jones News Retrieval • Datatimes • Newsnet • Profound

  23. Collection - Internet • WWW Home pages • Business News Groups • clari.nb.business, clari.biz.mergers • listserv@pucc.princeton.edu • Any Others? Usergroups? Listening posts?

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

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

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

  27. 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?

  28. CI Process • Start with specific projects • Establish gains from CI • Instill mentality, cooperation • Train everyone! • Reward finders and users • Establish feeding process

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

  30. 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

  31. 7,000 members - 2,000 Attendees at Annual Conference • 157 Information vendors • “Company” alums + Business Intel people • Seattle, WA March, 2001 • www.scip.org

  32. 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

  33. 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”

  34. For more info…

  35. 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

  36. 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

  37. Closing • Questions

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