Competitive Intelligence: Harvesting Information to Compete and Market Intelligently by ci1234

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									compete Intelligently
strategies for competitive advantage
                                                              The companies that
                                                              practice CI will win
                                                              the marketplace

                                                              They will be more
                                                              flexible to changing
                                                              market conditions,
                                                              able to leverage
                                                              the knowledge they
                                                              gain into successful
                                                              strategies and
                                                              operating tactics.

                                                              Ultimately, they
                                                              will be the
                                                              companies that
                                                              gain competitive

Competitive Intelligence:
Harvesting Information to compete and market intelligently.
By: Susan Brod
No matter what your industry, your business environment                                What is CI and why is it important?
changes daily.       New competitors, new products, new
technologies and the global economy affect your decisions
and the direction in which you lead your business.
                                                                                       CI    is the use of public sources to locate and develop an
In today‘s business and economic environment and going                                 information database that can be mined for information to be
forward, it will be even more crucial        for business                              analyzed and used to develop actionable strategies for your
professionals   to  practice  competing   and   marketing                              business. The CI you develop will have a positive impact on
intelligently—and that requires developing an ongoing                                  your business strategy, tactics and operations.
Competitive Intelligence (CI) gathering function for your
company.                                                                               What is the purpose of CI?
Whether you are developing viable corporate strategies,
creating new products and services, entering new markets,
considering a merger or acquisition, or charting a course of
                                                                                       Intelligence is both a process and a product: an analytical
                                                                                       process that transforms gathered competitor and market
action to improve profits, having timely, relevant information
                                                                                       information into actionable knowledge about competitors‘
is critical to effective decision making and the strategic
                                                                                       capabilities, intentions, performance and position as well as
planning process.
                                                                                       the final product of that process.1

The companies that practice CI will win the marketplace
                                                                                       Here is an example of how CI worked for one company:
battle.    They will be more flexible to changing market
conditions, able to leverage the knowledge they gain into
successful strategies and operating tactics. Ultimately, they                             ABC     Inc.  had    been    selling  electronic
will be the companies that gain competitive advantage.                                    components to OEMs (Original Equipment
                                                                                          Manufacturers)     who      manufactured    gas
                                                                                          furnaces.    The company was experiencing
Through the development and implementation of a CI
                                                                                          increasing competition and price erosion.
program, your company can obtain early warning on
                                                                                          Additionally, its largest customer had just
competitive threats and emerging opportunities. That means
                                                                                          purchased a company that manufactured the
you will be able to develop proactive strategies that capitalize
                                                                                          same product as ABC‘s, thus integrating this
on your competitors‘ weaknesses and your company‘s
                                                                                          product into their operations with no need to
                                                                                          purchase parts from ABC. ABC was faced with
                                                                                          losing 40% of its business.
CI takes time and financial resources. It should involve
senior management, department managers, sales and
                                                                                          ABC then initiated a CI program. The company
marketing, customer service, financial, human resources and
                                                                                          conducted market research and analyzed it in a
manufacturing personnel. Large companies have internal CI
                                                                                          SWOT* Analysis Session with a cross-functional
departments and large budgets. However, even the smallest
                                                                                          team. It looked at both its core competencies
company can establish an effective CI program by utilizing
                                                                                          and the external environment, then analyzed
the Internet and its vast free resources or retaining the
                                                                                          the competitive information it had gathered.
services of competitive intelligence professionals.

Companies may elect to outsource all or part of their CI                               *Strengths/Weaknesses/Opportunities/Threats
programs.     Outsourcing can be as simple as ordering
prepared market research reports from industry association                             The     organization   determined    that    several  social,
sites and market research companies for as little as $50 or as                         environmental and legal trends could positively impact its
costly as subscribing to ongoing research services like                                ability to enter two new markets.      First, there was the
Forrester Research for annual six-figure fees.            Market                       ―cocooning‖ of America, whereby people were staying home
research companies use the most advanced tools to automate                             more and wanted luxuries like gas fireplaces. Second, there
sourcing of required information and to transmit gathered                              were environmental laws that necessitated using gas
information to their clients. Trained market researchers and                           fireplaces where burning wood was banned. Additionally, the
industry experts can assist and facilitate your search efforts.                        proliferation of fast food restaurants using gas stoves
You might also consider using a consultant‘s services to either                        presented another new market opportunity.
help in the development or implementation of an internal CI
program or to conduct a program for you (the Internet is a                             The product of the CI project was the development of a
good place to seek outsourced assistance).             A major                         proactive marketing and sales strategy designed to enter and
advantage of using an independent consultant is to gain                                penetrate these new markets.         This resulted in less
objectivity and to avoid tunnel vision or personal agendas.                            dependence on one customer and an !8% growth in the
                                                                                       company‘s sales in the first 12 months of the new sales
By having an ongoing CI program in place, you will be able to                          effort.
be more flexible in responding to market changes and, by
developing strategies that result in competitive advantage,
ultimately become more profitable.

Competitive Intelligence: Harvesting information to compete and market intelligently                                         ©compete Intelligently 2009
Figure 1: Competitive Intelligence is Value-Added

                         Competitive Intelligence                                      What are the components of a CI research
                               Strategic Planning                                      To compete intelligently, it is necessary to start out with
                                                                                       good old-fashioned market research—the                process     of
                                                                                       collecting, analyzing and reporting information.

                                                                                                       Figure 2: The Research Process

CI is a value-added concept that layers over the top of
strategic planning, and market research. The research
objectives of a CI project will often involve issues such as:
                                                                                 1. Define the    2. Develop the
                                                                                                                     3. Harvest the
                                                                               Research Project   Research Plan -                       4. Analyze the
•    The manufacturing capabilities of the competitor.                         & Audit In-house    Methodology
                                                                                                                     Information -
•    Analysis of alliances and/or joint ventures entered into                        Data
     by competitors.
•    The competition‘s future plans and strategies for
     specific markets or product lines.
•    The state of the economy.
•    Market trends and sizes
•    Reasons behind changes in the corporate or business
     unit strategy, et cetera.2

Reva Basch, a market research professional, called by Wired                            1. Define the Project and Audit In-house Data
Magazine ―the ultimate intelligence agent‖, describes CI in
―Research Online for Dummies.‖ 3                                                       Think carefully about the information you need to gather.
                                                                                       Answering the following questions will help you target your
      ―A Competitive Intelligence project is broader and                               research:
      deeper than just investigating competitors and
      products (and just performing market research).                                  •   How much information do you already have (about
                                                                                           competitors, technology, your market, your customers,
      It is broader because you have to look at your                                       etc.)?
      company in the context of your marketplace—other                                 •   What more do you need to know?
      companies, consumers and outside events and
      conditions such as lawsuits or regulatory changes
                                                                                       •   When do you need to know it?
      that could affect profitability and strategic                                    •   Why do you need to know it?
      direction.                                                                       •   What will you do with the intelligence once you have it?
                                                                                       •   What will it cost to get it?
      It is deeper because you go beyond the general                                   •   What will it cost (in lost opportunity) to not get it?
      background data and hunt for news—new plant
      construction, partnerships, management changes,                                  The purpose of a CI project is to gather accurate and reliable
      patent and trademark applications, and so on—that                                information. The groundwork for the project is laid out
      may signal what your competition is up to.                                       through an internal CI audit. This is primarily a review of
                                                                                       your organization‘s operations to determine what is actually
      Competitive Intelligence projects are analytical.                                known about your competitors and their operations.4
      They can be likened to detective work because you
      have to piece together the facts, opinions and                                   As a starting point, most organizations have some knowledge
      analyses that you find, trying to discern meaningful                             of their competitors and their own CI needs. If these needs
      patterns and drawing conclusions based on the                                    are not clearly defined, however, the organization may not be
      evidence you find.‖                                                              able to deploy its resources effectively. The CI audit helps to
                                                                                       pinpoint them.

                                                                                       CI requires not only information about your competitors—
                                                                                       their sales channels, marketing strategies and messages,
                                                                                       products and pricing, strategic alliances, intellectual

Competitive Intelligence: Harvesting information to compete and market intelligently                                            ©compete Intelligently 2009
property—but also information about your business‘s external                           transactions,       manufacturing         warranties      and
environment.    This includes industry trends, legal and                               telecommunications records.          The data from these
regulatory  trends,   technology   developments,    political                          transactions provide profiles of key trends that impact
developments and economic conditions.                                                  multiple areas of a business, such as complementary
                                                                                       products, sources of profits, consumer demographics and
The amount of data needed and the methodology for                                      purchasing behavior. This data, gathered over time, is stored
gathering it will help you determine the budget required to                            in databases that are referred to as data warehouses.
accomplish the project objectives. At the very outset, commit
to the resources necessary to get the project done—in
                                                                                       A database or warehouse for a small company can be a
manpower and time required as well as budget dollars.
                                                                                       customer list or sales-by-customer history. It can be as
                                                                                       simple as an Excel spreadsheet or as sophisticated as an
Research data can be defined in two forms: Secondary and                               Oracle software system.
                                                                                       While operational data deals with daily activities (i.e., orders
                                                                                       entered tied to manufacturing and shipping functions), the
                 Figure 3: Types of Research Data                                      warehouse data is historical in nature and is used to obtain
                                                                                       perspective on business trends (i.e., sales by geography, by
                                                                                       product, buying patterns, etc.) The insights gathered from
                                                  PRIMARY                              the analysis of this historical data are then used in the
          SECONDARY                               RESEARCH
                                                                                       decision-making process.
           RESEARCH      Written Sources          Research is   Personal
                          (books, trade                         Interviews             Industry surveys indicate that more than 80% of Fortune 500
                           publications,                                               companies view data mining as a critical factor for business
                         directories, etc.)                                            success. Most of these companies collect and refine massive
                                                                                       quantities of data in data warehouses.6 The data can be
                                                                                       manipulated and used in a variety of ways:
                        Databases                               Surveys
                                                                                       •   Customer Prospecting and Segmentation
                                                                                           Data mining can help companies analyze their
                                                                                           customer base and segment their markets.
                                                                                           This helps identify those customers that are
                                                                                           more likely to respond to marketing efforts and
                        The Internet                            Focus Groups               will provide better profits.

                                                                                       •   Customer Relationship Management

                                                                                           Data mining finds patterns of product usage and
                                                                                           helps companies analyze consumer behavior. It
                                                                                           helps to identify what causes customer attrition
Secondary Research                                                                         and improves customer retention.

                                                                                       Data mining improves an organization‘s effectiveness,
Secondary   data is information gathered from published                                efficiency and value by enhancing the knowledge it
sources such as trade publications, books, government                                  already possesses. It has a variety of applications
agencies, websites, market research reports, business                                  in many industries:
information companies, newsletters, industry or subject
newsgroups, blogs, trade shows and trade associations.                                 •   Retail - In the retail sector data mining can help
                                                                                           identify profit patterns, complementary product
All secondary research data is in the public domain.                                       sales, shelf space and market basket analysis.
                                                                                           It can help identify products that are traffic
It is also information gathered from within the organization.                              builders.
Internal company information can come from MIS systems
and customer databases. Utilizing this type of information is                          •   Consumer Packaged Goods companies use data
called data mining.                                                                        mining in much the same way as retail
                                                                                           companies. A manufacturer‘s products can be
According to a Gartner Group report, ―Data mining (extracting                              analyzed across many store chains so that
information from databases) and artificial intelligence (the                               market share and demographics can be
creation of computer systems that can mimic the decision-                                  analyzed and the factors influencing the
making power of human beings) are at the top of the five key                               effectiveness of advertising can be identified
technology areas that have clearly made an impact across a                                 and measured.
wide range of industries‖ 5 over the past several years.
                                                                                       •   Manufacturing Quality and Warranty Programs
Since the mid-70‘s, computers have been used to capture                                    use data mining to help identify process
large amounts of data from business transactions such as                                   variations within manufacturing and assembly
banking, website ―browsing‖, credit card records, sale                                     operations. Data mining can help improve

Competitive Intelligence: Harvesting information to compete and market intelligently                                           ©compete Intelligently 2009
                                                                                                     The Internet can be the greatest
    product quality by identifying the factors that                                                  tool devised for the CI sleuth
    cause problems, thus increasing customer                                                         since the opening of the first
    satisfaction by reducing complaints and
                                                                                                     public library.

                                                                                                     However, and it’s a big HOWEVER,
•   In the Business-to-Business Sector data mining                                                   although information is overly
    helps determine customer order cycles, sales
                                                                                                     abundant on the Internet, and
    results, employee turnover and product
    acceptance. Mining and analyzing data enables                                                    continuously being created and
    companies to identify best practices, analyze                                                    revised, it ranges from good to bad
    marketing campaign results and develop                                                           to just plain wrong.
    strategies that capitalize on the business‘s core
    competencies and market opportunities.

About The Internet                                                                     they do so within Wikipedia‘s editing policies and to an
The Internet can be the greatest tool devised for                   the CI
                                                                                       appropriate standard. Substandard or disputed information is
                                                                                       subject to removal. Users need not worry about accidentally
sleuth since the opening of the first public library.
                                                                                       damaging Wikipedia when adding or improving information,
                                                                                       as other editors are always around to advise or correct
However, and it‘s a big HOWEVER, although information is
overly abundant on the Internet, and continuously being                                obvious errors, and Wikipedia‘s software is carefully designed
created and revised, it ranges from good to very bad to just                           to allow easy reversal of editorial mistakes.‖ 9
plain wrong.      Therefore, you should always question the
reliability of the information. While information on the Web
                                                                                       Wikipedia‘s information page admits that ―because Wikipedia
exists in a wide variety of formats (facts, opinions, stories,
                                                                                       is an ongoing work to which, in principle, anybody can
interpretations, statistics), it is written for varying agendas—
                                                                                       contribute, it differs from a paper-based reference source in
to inform, to persuade, to sell, to present a viewpoint—
                                                                                       important ways. In particular, older articles tend to be more
therefore, it is up to the researcher to interpret the
                                                                                       comprehensive and balanced, while newer articles more
information and separate the wheat from the chaff.
                                                                                       frequently contain significant misinformation, ‗unencyclopedic‘
                                                                                       content, or vandalism. Users need to be aware of this to
A good example of Internet information is Wikipedia—―the                               obtain valid information and avoid misinformation that has
free encyclopedia that anyone can edit.‖8.                                             been recently added and not yet removed. However, unlike a
                                                                                       paper reference source, Wikipedia is continually updated, with
Started in 2001 Wikipedia (pronounced wi : kipi : dia) is a                            the creation or updating of articles on topical events within
multilingual, Web-based, free content encyclopedia project.                            seconds, minutes, or hours, rather than months or years for
                                                                                       printed encyclopedias.‖10
The name ―Wikipedia‖ is a blend of the words wiki (a type of
collaborative Web site) and encyclopedia.
                                                                                       How then can a researcher be certain that they are gathering
                                                                                       accurate facts and not fiction or opinion? If you‘re not sure
Wikipedia‘s articles provide links to guide the user to related
                                                                                       the information you‘ve found is reliable, you might want to
pages with additional information. Wikipedia currently has
                                                                                       look at:
3,004,305 articles in English (plus more than 13,000,000
articles in 260 other languages.
                                                                                       •   Accountability—who is responsible for the site?
    ―Wikipedia    is   written   collaboratively  by                                       If the author of the site is not clearly indicated,
    volunteers from all around the world. Anyone                                           e-mail the Webmaster with some questions.
    with internet access can make changes to                                               Try to select sources that offer as much of the
    Wikipedia articles. Since its creation, Wikipedia                                      following information as possible:         Author's
    has grown rapidly into one of the largest                                              Name, Author's Title or Position, Author's
    provide links to guide the user to related pages                                       organizational Affiliation, Date of Page Creation
    with additional information. Wikipedia currently                                       or Version, Author's Contact Information11
    has 3,004,305 articles in English (plus more
    than 13,000,000 articles in 260 other                                              •   Bias—remember       that     even      reputable
    languages.)‖                                                                           publications may be biased in their viewpoint.
                                                                                           An example: We all know that info found on
Content contributors do not need specialized qualifications to                             Fox News leans towards a conservative
                                                                                           philosophy while MSNBC leans liberal.
contribute. Wikipedia's intent is to have articles that cover
existing knowledge, not create new knowledge (original
research). This means that people of all ages and cultural and                         •   Timeliness—check the date of the information.
                                                                                           Be aware that some sites never remove or
social backgrounds can write Wikipedia articles. Most of the
                                                                                           update information and some are dynamic,
articles can be edited by anyone with access to the Internet,                              replacing information every day or even hourly.
simply by clicking the edit this page link. Anyone is welcome                              You will have to determine how timely and,
to add information, cross references or citations, as long as

Competitive Intelligence: Harvesting information to compete and market intelligently                                            ©compete Intelligently 2009
          therefore, how relevant the information is
          for your purposes.

     •    Information Overload—with the vast size
          of the Internet you could stay online                                                     Information Overload—with the
          forever—or until your money and patience                                                  vast size of the Internet you
          wears out. A good indication of knowing                                                   could stay online forever…….A
          you‘re done is when you start seeing the                                                  good indicaton of knowing when
          same results from several sources. It‘s                                                   you’re done is when you start
          important to know when you‘re done so                                                     seeing the same results from
          you can move on to the next step in the                                                   several sources.

     •    The CARS Checklist--The CARS Checklist
          (Credibility, Accuracy, Reasonableness,
          Support) is designed for ease of learning
          and use. Few sources will meet every
          criterion in the list, and even those that do
          may not possess the highest level of
          quality possible. But if you learn to use
          the criteria in this list, you will be much
          more likely to separate the information.12

                                   Figure 4: Summary of The CARS Checklist for Research Source Evaluation13

Credibility                     Trustworthy source, author‘s credentials,             Goal: an authoritative source, a source that supplies some
                                 known or respected authority                          good evidence that allows you to trust it.
                                Evidence of quality control, organizational
Accuracy                        Up to date, factual, detailed, exact,                 Goal: a source that is correct today (not yesterday), a
                                 comprehensive                                         source that gives the whole truth.
                                Audience and purpose reflect intentions of
                                 completeness and accuracy.
Reasonableness                  Fair, balanced, objective, reasoned                   Goal: a source that engages the subject thoughtfully and
                                No conflict of interest, absence of fallacies         reasonably, concerned with the truth.
                                 or slanted tone.

Support                         Listed sources, contact information                   Goal: a source that provides convincing evidence for the
                                Available corroboration, claims supported,            claims made; a source you can triangulate (find at least two
                                 documentation supplied.                               other sources that support it).

Understanding what is available and how to find Internet content is the first step in finding the information your research project

                                                               Figure 5: Map of the Internet

                                                 Free Sites                                    Gated Sites

                                      General Search Engines
                                      Meta Search Engines
                                      Specialized Search Engines                       Pay for Service
                                      Company Web Sites
                                      Associations / Publications                      Data Aggragators
                                      Government & University Sites
                                                                                       Research Libraries

Competitive Intelligence: Harvesting information to compete and market intelligently                                        ©compete Intelligently 2009
                                                                                       Examples of meta search engines are and
Some Tips for Finding Information on
The Internet:
                                                                                       A good source to understand the different types of search
Free Sites                                                                             engines and how they work is the University of California at
                                                                                       Berkley‘s Tutorial ―Finding Information on the Internet‖ at
1. Search Engines                                                            

                                                                                       Custom (CSEs) or specialized search engines deal with
Any research project should start by using the thousands of                            information on one topic or research service. You can find a
valuable free sites and search engines. As in a traditional                            sample of custom search engines at
research project using offline resources, your search will be                        At this site you can find
infinitely easier if you spend some time planning and                                  search engines specific to such topics as prediction markets,
understanding how search engines work.                                                 marketing magazines search, UK agricultural machinery,
                                                                                       cattle information, etc.
•    Start with general and meta search engines, then
     progress to subject or specialized search engines.
                                                                                       2. Company Websites
•    Learn Boolean search instructions. Use ALL to tell the
     search engine explicitly that you want documents in
     which all your terms appear. AND if you want two terms                            •    Be aware that competitor‘s websites are an
     to appear, i.e. ―apples AND oranges‖. OR if you want                                   amazingly simple way to find out about competitive
     documents in which either of your search term appears,                                 strategies, marketing and product plans and sales
     i.e. ―apples OR oranges‖.                                                              channels. Most Websites are still first or second
                                                                                            generation marketing sites rather than Web 2.0
                                                                                            interactive customer-centric sites and in the ―old‖
•    Also evaluate the quality of the information you retrieve.                             days of the Internet—back in 1997 thru about
     Does it quote a reliable source? Does the information                                  2003—companies put all kinds of helpful competitive
     come from a reputable, well-known source?          A URL                               information on their sites.
     ending in .gov, .edu or .mil is usually an indicator of
     quality information. More on this later.
                                                                                       •    To gather financial data and information on
                                                                                            competitor‘s plans, read mission and vision
      ―No matter which search engine you use, you can                                       statements—they offer clues to a competitor‘s plans
      drown in the web‘s ocean of materials trying to find                                  and strategies. Publicly-held companies usually have
      the right answer because only about 17% of the                                        their annual reports and K-1 documents on their
      search results will apply to your question. Search                                    sites. These contain a fountain of information on
      engines are not regularly updated, so you may not                                     financials,  marketing    plans,  sales   strategies,
      be getting current data. Quality control doesn‘t exist.                               personnel, etc. Annual reports and SEC documents
      Abandoned sites, urban legends spouted as truth,                                      can also be found on            While
      and advertising, advertising, advertising abound.‖14                                  privately-held companies are more difficult to
                                                                                            research, you can still obtain estimated revenues
Although most people immediately go to Google when they                                     and    other   information    on   sites  such     as
want to search for something, researchers utilize a variety of                     and
search engines. General search engines like Google are a
good place to start but contain many irrelevant ―hits‖ as                              •    When seeking information about a company, try
people put many irrelevant keywords on their sites in order to                              doing a Google search for ―news‖ rather than
gain search optimization. General search engines are where                                  searching the entire web. Results of news searches
you really have to separate the wheat from the chaff.                                       are timely and will give you articles from
                                                                                            newspapers, publications and press releases.
Bing is an interesting new search engine developed by
Microsoft as a direct Google-competitor. It not only brings
you ―hits‖ on your search terms but when you run your cursor
                                                                                       3. Association and Publication Sites
over ―hit‖, it gives you a synopsis of the site—a welcome
feature and time saver. Bing also gives you a list of ―related                         •    Most industries have associations that link to the
searches‖ that may bring you more relevant information.                                     best sites for finding information on that industry.
                                                                                            One example is the Food Marketing Institute at
In a meta-search engine, you submit keywords in its search                         From here you can link to hundreds of
box, and it transmits your search simultaneously to                                         websites about the food industry—wholesalers,
several individual search engines and their databases of web                                supermarkets, grocery manufacturers, etc. Another
pages. Within a few seconds, you get back results from all the                              example is by searching for ―electronics industry‖ on
search engines queried.                                                           , we find the Electronic Industries
                                                                                            Alliance (EIA) Upon clicking on this site, we are linked
Meta-search engines do not own a database of Web pages;                                     to a full page of electronics industry associations.
they send your search terms to the databases maintained by                                  Another good starting point for industry information
search engine companies. Meta search engines give you a                                     is        At this site you can find
broader spectrum of ―hits‖ than a general search engine.                                    Industry Analysis as well as information by product.

Competitive Intelligence: Harvesting information to compete and market intelligently                                          ©compete Intelligently 2009
        Primary Data can be                                                            As of December 2007, blog search engine Technorati was
        gathered through:                                                              tracking more than 112 million blogs.17

        •         Observation                                                          Blogs can be useful when searching for information about
        •         Focus Groups                                                         companies and people. A company can find out what their
        •         Surveys                                                              employees and customers are thinking by searching blogs
        •         Experiments                                                          and/or blogging themselves.
        •         Interviews
        •         Beta Tests                                                           Technorati – is a site that compiles
                                                                                       and reports on blogs. On this site you can search the
                                                                                       ―blogosphere‖ to find information about any company or
                                                                                       subject. A search for Coca-Cola came up with 14,887 blogs
                                                                                       mentioning Coke.

     Internet publications are another good source of research                         If you still haven‘t found what you need, move on to gated
     information. They can be industry-specific publications                           and/or proprietary sites.
     such as ―Integrated Solutions for Retailers‖ and
     ―Semiconductor Today‖ or general business publications                            Gated Sites
     such as and Business Week. A good site to find
     industry publications is
                                                                                       ―What you don‘t know really does hurt you. About 70% of the
                                                                                       Web is "hidden" – accessible with passwords only (for the
4. Government and University Sites                                                     select few).‖18

•    Government sites (federal, state and local) and country                           Gated sites can be proprietary to a company or organization,
     sites have a wealth of information and statistics on                              accessible only by password by employees, students and/or
     market size, market trends, companies, technology, etc.                           customers, or a site that charges for the information it will lead to hundreds of sites to gather                              contains. These are commonly aggregators of data such as
     statistics on business, consumers, import and export                              Dialog, D&B, Hoovers, Lexis-Nexis and Dow Jones.
     trade, foreign countries….on and on.
                                                                                       Gated sites can be proprietary to a company or organization,
•    Country websites such as                                                          accessible only by password by employees, students and/or will lead you to                            customers, or a site that charges for the information it
     whatever information you are seeking about the United                             contains. These are commonly aggregators of data such as
     Kingdom, its people, demographics, business links, laws                           Dialog, D&B, Hoovers, Lexis-Nexis and Dow Jones.
     and regulations, etc. It‘s a safe bet that most countries
     now have a website.                                                               Some gated sites, such as Hoovers, do have some free
                                                                                       content, but the majority of content is only accessible on a
                                                                                       subscription service.
•    University sites should also be viewed to find reports and
     research. A good example is Harvard University which
                                                                                       Dependent upon the amount of research you need to do, it
     has a separate site——where
                                                                                       may be beneficial to subscribe to some gated sites.
     you can find their business case studies by industry,
                                                                                       Sometimes they are available at public or school libraries that
     geography, management function, etc.             Similarly,
                                                                                       have purchased subscriptions.
     Wharton          University       has        a       site--—that           contains
     articles and reports on everything from strategic
     management to insurance and pensions.                                             Primary Data

5. Blogs                                                                               Primary    data is information gathered for the research
                                                                                       project and involves scientifically selecting and interviewing
Internet research in the Web 2.0 age cannot ignore the latest                          people individually or in groups.
type of website—blogs.       Blogs are defined as a type of
website, usually maintained by an individual with regular                              Most research projects begin by reviewing secondary research
entries of commentary, descriptions of events, or other                                to determine if problems and solutions can be identified or
material such as graphics or video. Entries are commonly                               research hypotheses can be developed without having to
displayed in reverse-chronological order. "Blog" can also be                           collect primary data, which is extremely time-consuming and
used as a verb, meaning to maintain or add content to a blog.                          costly.
Many blogs provide commentary or news on a particular
subject; others function as more personal online diaries. The                          However, if primary data is needed, several methodologies
ability for readers to leave comments in an interactive format                         may be used:
is an important part of many blogs.16

Competitive Intelligence: Harvesting information to compete and market intelligently                                          ©compete Intelligently 2009
•    Observational Research involves studying relevant
     consumers in the setting in which they purchase                                   3. Harvesting the Information You Need
     products. This is the type of research being done
     when a person with a clipboard stops you at the
     shopping mall.
                                                                                       Now that you have accumulated all this data, it‘s time to
                                                                                       put it together. There are several ways to do this:
     •    Focus Groups may be utilized to interview
          consumers in a small-group setting on their
                                                                                       Manual data collection may simply involve compiling a report
          purchase     decisions     and    product/service
                                                                                       from answers to interview questions, focus group responses
          perceptions and preferences.      Although focus
                                                                                       and results of secondary research.
          groups are primarily used for consumer products
          and services, many companies involved in
                                                                                       Electronic tools include spreadsheet programs to mine,
          business-to-business products and services use
                                                                                       tabulate and analyze data. Focus groups can be recorded on
          this type of primary research, gathering small
                                                                                       video for later viewing. Software programs for mining and
          groups of customers into User Groups where
                                                                                       analyzing data are readily available.
          topics such as product performance, customer
          service and delivery are discussed.
                                                                                       Collecting information is usually the most costly phase of the
                                                                                       research process and the one most liable to error. In primary
          Focus groups and user groups are not to be used
                                                                                       research, interviewees may be unreachable or uncooperative
          statistically. These groups are usually kept to a
                                                                                       and give false or biased answers.        Data input is time
          small number of participants and, therefore, do
                                                                                       consuming and labor intensive in both primary and secondary
          not provide the sampling sizes that would
          product relevant statistics.
                                                                                       Here again, adequate planning is necessary to establish your
     •    Surveys may be used to gauge consumers‘                                      budget. When outsourcing a CI project it is important to have
          knowledge, beliefs, preferences or attitudes.                                a clear timeline for research completion outlined in the
          Surveys can be useful and powerful tools even                                proposal. A fixed project fee rather than time and material is
          when sampling a small fraction of a population.                              preferable.
          Unless the survey is very simple, expert
          assistance should be sought in both developing                               It must be reiterated that CI is an ongoing corporate function.
          the survey and in analyzing the results.                                     A company‘s budget must reflect the costs of keeping CI
                                                                                       information current and provide the resources to analyze the
          Consultants are available who specialize in both                             information and incorporate it into the company‘s strategic
          the development and analysis of surveys.                                     and operating plans. This ongoing effort can be as simple as
          Sources of help can be found at The American                                 directing all business unit managers to keep their CI
          Statistical Association for Public Opinion Research                          information stream current, enlisting the assistance of your
          ( and the American Marketing                                   sales force in gathering competitive information from their
          Association (                                                   customers, subscribing to a research service, or establishing a
                                                                                       CI department with thin the organization.
     •    Experimental     research  uses    groups    of
          interviewees who are subjected to different
          research treatments.       Researchers control
          extraneous variables and    attempt to identify
                                                                                       4. Analyzing the Information –
          how the different groups respond. This type of
          research is very common for pharmaceutical and                                  The CI Process
          cosmetics companies.

     •    Beta tests, common in the computer industry,
          are a means of testing a product before it is
                                                                                       The most critical part of the research process now begins—
                                                                                       analyzing the data and converting it into meaningful
          launched to the market. Beta tests can uncover                               information that can be easily accessed and understood by all
          potential design and manufacturing problems as                               business units.    It will then be used to make business
          well as consumer preferences and potential                                   decisions or develop strategies.
          product acceptance.
                                                                                       A frequently used method to analyze data is to tabulate the
      After you have determined the research methodology to                            collected data, then utilize statistical techniques and decision
      be used, the research instruments must be chosen:                                models to perform ―what if‖ scenarios regarding particular
                                                                                       situations or problems. Simple manual analysis is possible for
     •    Questionnaires are commonly used in one-on-                                  certain scenarios.    For example, if you are considering
          one and telephone interview or given to the                                  manufacturing a new product, here is one way to approach
          interviewee to fill out.                                                     your data:

     •    Mechanical instruments include galvanometers                                    Your objective is to determine what competition is
          that measure a person‘s physical reactions in                                   present, what customers think of the competition‘s
          response to exposure to a picture or ad, and                                    products, how the product is marketed and what
          tachistoscopes, which flash an image to a person                                market share can be achieved.
          at various intervals after which the person
          describes his or her level of recall.

Competitive Intelligence: Harvesting information to compete and market intelligently                                          ©compete Intelligently 2009
                                                                                       Sales at an electronics components manufacturer
            A SWOT Analysis is a useful tool for                                       were declining in an industry with strong offshore
            analyzing data and turning it into                                         competition.    Management believed it could turn
            actionable strategies…..It is often                                        sales around by hiring more sales reps and turned to
            useful to use a consultant to                                              a consultant for help.
            facilitate a SWOT session in order to
            add objectivity to the analysis and                                        The consultant began by conducting an informal CI
            planning process and to move the                                           audit with senior management to determine the
            process along past internal                                                state of the industry the company sold to, who their
            agendas.                                                                   competitors were and what their positioning in the

                                                                                       industry was. Although the company was able to list
                                                                                       its competitors, they ranged in size from $1 million
                                                                                       businesses to $1 billion businesses. The company
                                                                                       sold its products to about six industry segments but
    The information needed was gathered by
                                                                                       could not tell which was their primary market.
    conducting both primary and secondary research.
                                                                                       Additionally, it did not know the total market for its
    Secondary research uncovered information about
                                                                                       products and, therefore, could not determine its
    competitors, their strengths and weaknesses, the
                                                                                       market share.
    size of the potential market, present and future
    market     trends.       Primary    research   was
                                                                                       Solution: Realizing that the information base was
    accomplished     through     a    combination    of
                                                                                       limited and competitive and industry information
    interviewing customers and focus groups.
                                                                                       critical to solving the company‘s declining sales
                                                                                       problem deficient, the consultant first initiated a CI
    Research results might show one competitor with
    100%      market     share   and   high  customer
    satisfaction, or it might show 20 competitors with
                                                                                       The objective was to learn about the company‘s
    equal     market     share  and    high  customer
                                                                                       internal operation and sales history, as well as the
    dissatisfaction.    Once the results are in hand,
                                                                                       external environment in which the company
    management can overlay its own company‘s
                                                                                       competed. Only then could the consultant develop
    internal strengths and weaknesses against the
                                                                                       an action plan to increase sales.
    competition‘s positioning. It can perform ―what if‖
    scenarios as to whether their market entry could
                                                                                       The first step in the CI project was to mine data
    achieve their desired market share and sales
                                                                                       from the company‘s customer list, specifically its
    volume and determine the best strategy to
                                                                                       sales reports.    Through a manual analysis the
    introduce and market the company‘s product.
                                                                                       company was able to:
Decision-support systems software is available for data
analysis. Quantitative and/or qualitative data obtained from                           •   Determine by SIC code the industry segments
the research project is entered, and the system outputs                                    the customers represented
information describing the implications of specific decisions.                         •   Rank customers by sales from year to year
Some companies offering analysis software: Tibco                                       •   Analyze customer retention
(, MicroStrategy,                            •   Determine which geographic areas produced
Inc. ( and SAP,                                                      the best results.
                                                                                       •   Analyze sales efforts in best result areas.
A SWOT Analysis session is a useful tool for analyzing the                             •   Determine which product lines produced the
data generated in the research phase. A cross-functional                                   best results.
team is put together to analyze the company‘s strengths and                            •   Analyze product sales by market segment
weaknesses compared to its competitors.        The external
environment is analyzed for opportunities and threats. From                            The objective was to learn about the company‘s
this analysis, patterns and benchmarks can be seen and                                 internal operation and sales history, as well as the
strategies and tactics developed.                                                      external environment in which the company
                                                                                       competed. Only then could the consultant develop
It is often useful to use a consultant to facilitate a SWOT                            an action plan to increase sales.
session in order to add objectivity to the analysis and
planning process and to move the process along past internal                           The first step in the CI project was to mine data
agendas.                                                                               from the company‘s customer list, specifically its
                                                                                       sales reports.    Through a manual analysis the
                                                                                       company was able to:
Putting CI to Work
                                                                                       •   Determine by SIC code the industry segments
After this has been completed, the competitive intelligence                            •
                                                                                           the customers represented
                                                                                           Rank customers by sales from year to year
phase begins. Note that the CI process is continuous while
the initial market research phase has a definite end point.                            •   Analyze customer retention
                                                                                       •   Determine which geographic areas produced
The following case study illustrates the process:                                          the best results.

Competitive Intelligence: Harvesting information to compete and market intelligently                                      ©compete Intelligently 2009
      •       Analyze sales efforts in best result areas.                               It was clear from analyzing this data that the
                                                                                        company had a very small share of the market,
      •       Determine which product lines produced the
                                                                                        albeit a market that was expected to grow at a 15-
              best results.
                                                                                        20% rate over the next five years. Due to its low
      •       Analyze product sales by market segment                                   market share and sales volume, the company clearly
                                                                                        did not offer an independent sales rep adequate
  By data mining its customer database and analyzing                                    income from the product line. Therefore, alternative
  this information, the company was able to clearly see                                 sales channels were looked at and analyzed. This
  what its primary target market was. It could then                                     analysis determined that the best alternative
  better focus its sales and marketing efforts and                                      channels were to:
  determine if, in fact, those geographic territories
  presently covered by a sales rep produced the best
                                                                                        •    Focus company sales efforts on distributors
                                                                                        •    Develop a strong, internal telemarketing effort.
  The external CI project focused on learning about                                     •    Utilize the Internet as a sales channel, either by
  the industry, specifically identifying it size and                                         selling its products online or by allowing
  technology trends, and the company‘s competitors.                                          customers to solicit pricing online through a
  The methodology for this was Internet-based                                                closed site.
  secondary research.
                                                                                       From a CI project that took less than one month, the
  First, competitors‘ websites were analyzed.                 This                     company was better positioned to move forward and
  resulted in determining:                                                             develop actionable strategies to increase sales. It also
                                                                                       learned that it had to seriously consider how to
          •     Competitors‘ missions and goals, which                                 upgrade its technologies and manufacturing processes
                were clearly stated on some sites.                                     to compete successfully within its industry. And, most
          •     What customers their competitors were                                  importantly, it established an ongoing CI function. The
                                                                                       company now has the ability to track and update its
                selling to.
                                                                                       Competitive Matrix, analyze its sales and customer
          •     Which competitors‘ sales channels were                                 database and monitor industry trends.
                independent      reps,   direct   sales   or
                distributors.                                                          It is ready to move forward with the flexibility to be
          •     Interactive features of websites—could                                 proactive to any internal company or external
                customers get specifications, pricing, etc.?                           industry, economic, or competitive challenge it may
                Could they order parts?                                                encounter in the future.
          •     What geographic areas were covered by
                competitors‘ sales reps?
          •     Pricing                                                                The bottom line ----
          •     Delivery
          •     Competitors‘ marketing objectives such as
                trade shows planned.                                                                Figure 6: CI is an Ongoing Process
          •     Technologies used.
          •     Markets covered.
          •     Manufacturing capabilities
          •     ISO certification                                                                                         Define

  From the analysis of competitors, the company was
  able to develop a Competitive Matrix which clearly
  show its strengths and weaknesses as well as market
  voids or under-covered niches.
                                                                                                      Analyze &
  The company was able to see where its own                                                           Develop
                                                                                                                      Competitive           Conduct
  strengths could be utilized to provide a competitive                                                                Intelligence          Research
  advantage in market niches not covered by the
  competition. It was also able to determine that its
  product line was not state-of-the-art. As a result,
  the company evaluated its manufacturing and
  technology capabilities.
  The second step was to research the industry and                                                                        Data
  market segments where the company sold its
  products. The goal was to determine where to focus
  its marketing and sales efforts. This second step
  yielded the following:

  •       The size of the industry by market segment
                                                                                       In practice, the intelligence product is unlikely to be created
                                                                                       from perfect input. We cannot truly and accurately predict
  •       Forecasts by product                                                         the future, but we can evaluate the past and extrapolate
  •       Technology trends                                                            trends to forecast and prepare for the future.

Competitive Intelligence: Harvesting information to compete and market intelligently                                           ©compete Intelligently 2009
CI‘s real value is to provide managers with the organization
tools to learn what the competition will do, not what the
competition has already done. From this information each                               The Competitive Intelligence Process
business unit can develop plans for effective management.                              is a continuous process.

The Competitive Intelligence Process is a continuous process.                          Companies with CI programs have
Once in place, every member of the organization from                                   better knowledge of their markets,
engineering to sales should be channeling information to the                           better cross-functional relationship
person responsible for the data warehouse. The goal is for                             between their business units and a
the organization to always be proactive in its strategic                               greater ability to develop proactive
planning and develop actionable tactics and contingency plans                          competitive strategies.
for any events they may encounter.
                                                                                       Whether a company needs to develop
Companies with CI programs have better knowledge of their                              a corporate strategy or a marketing
markets, better cross-functional relationship between their                            strategy, the first step is to conduct
business units and a greater ability to develop proactive                              CI—and incorporate it as an integral
competitive strategies. Whether a company needs to develop                             part of the business.
a corporate strategy or a marketing strategy, the first step is
to conduct CI—and incorporate it as an integral part of the


Clemente, Mark N., ―The Marketing Glossary‖. AMACOM, 1992

Salant, Priscilla and Dillman, Don A., ―How to Conduct Your Own Survey— Leading Professionals Give You Proven Techniques for
Getting Reliable Results.‖, John Wiley & Sons, 1994.

Reynolds, Don, Jr., ―How to Sharpen Your Competitive Edge‖, Small Business Sourcebook 1999

―Sales & Marketing—First Book for Business‖, McGraw-Hill 1996

Basch, Reva – ―Researching Online for Dummies‖. IDG Books 1998; Revised 2000

Herring, Mark, ―10 Reasons Why the Internet Is No Substitute for a Library‖, American Libraries, April 2001

End Notes
     ―The Intelligentsia‖ by Michelle Cook, Business 2.0
     ―What is Competitive Intelligence‖ by Arik R. Johnson at
     Basch, Reva – ―Researching Online for Dummies‖. IDG Books 1998; Revised 2000
     ―The Intelligentsia‖ by Michelle Cook, Business 2.0
     Information Discovery, Inc. ―Perspective on Data Mining – Reaping Benefits from your Data‖ at
     ―Evaluating Internet Research Sources‖ by Robert Harris, Version Date: June 15, 2007,
     ―10 Reasons Why the Internet Is No Substitute for a Library‖ by Mark Herring, American Libraries, April 2001, p. 76–78.
     ―Finding Information on the Internet‖, University of California at Berkeley,
     Wikipedia, August 20, 2009
      ―Welcome to Technorati", Author Unknown, Retrieved 2008-06-05.
      10 Reasons Why the Internet Is No Substitute for a Library‖ by Mark Herring, American Libraries, April 2001, p. 76–78.


Competitive Intelligence: Harvesting information to compete and market intelligently                            ©compete Intelligently 2009
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compete Intelligently                                                              Savannah, GA 31419

 strategies for competitive advantage                                    

Founded in 1996 compete Intelligently is a full-service competitive
intelligence company.

compete Intelligently’s mission is to provide its clients with information about
the landscape in which they do business so they may make informed choices,
develop actionable strategies, increase sales and gain market share.

Susan Brod is the founder and President of compete Intelligently.

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