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Competitive Intelligence (CI): Overview, Trends & Developments

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  1. Competitive Intelligence (CI):Overview, Trends & Developments Jerry P.Miller Director Competitive Intelligence Center Simmons College Boston, MA +1-617-521-2809 +1-671-521-3141 (fax) jmiller@simmons.edu cic.simmons.edu

  2. Conduct Intelligence to: Gain a Competitive Advantage

  3. The Intelligence Function: • The process of ethically collecting, analyzing, and disseminating accurate, relevant, specific, timely, foresighted and actionable intelligence regarding the implications of the business environment, competitors, and the organization itself.  Jerry P. Miller 2002

  4. The Intelligence Function: • Gather information from primary & secondary sources • Upgrade information to intelligence incorporating analyst’s perspective • Generate insights and suggestions • Disseminate to decision makers who take action that can gain a competitive advantage for the firm  Jerry P. Miller 2002

  5. The Intelligence Process is NOT: • Industrial/Economic Espionage • Corporate Spying • Routing news clippings • Searching the Web  Jerry P. Miller 2002

  6. Why Intelligence?:“…to be defeated is excusable,but to be surprised is unforgettable.” D. Rouach, 1996

  7. Why Intelligence? • Managers need to increase the quality of: 1) products or services 2) strategic planning and 3) market knowledge • That results in higher business performance  Jerry P. Miller 2002

  8. How Do I Know if I Need an Intelligence Function? How critical are the questions that keep you awake at night?

  9. How Many Resources Are Enough? How many key managers are currently obtaining and using adequate intelligence effectively for decision making?

  10. Strategic Intelligence: • Emphasizes the relationship between the intelligence function and strategic decision-making  Jerry P. Miller 2002

  11. Business Intelligence: • Incorporates the monitoring of a wide array of developments across an organization’s external environment, which includes customers, competitors, suppliers, economic issues as well as technical and regulatory changes  Jerry P. Miller 2002

  12. Technical Intelligence: • Monitors research and development issues • Reduces risky decision making • Broadens awareness of competitive situation • Identifies business alternatives • Increases warning time from 31 to 37 months in chemical/pharmaceuticals industry and from 17 to 33 months in other industries  Jerry P. Miller 2002

  13. Counterintelligence: • Protects intelligence collection activities and protects plans, programs, and projects from adversaries • Hire security specialists • Train employees not to give away sensitive information • Computer usage heightens importance  Jerry P. Miller 2002

  14. Who’s Doing Competitive Intelligence? • 90% of Fortune 500 firms in the U.S. • 9% of U.S. firms with formal processes • Chemical and telecommunications firms • Firms with high R&D expenditures • Firms that own many patents • 2-3% of German firms in various industries • U.S. & U.K. firms: leading intelligence producers  Jerry P. Miller 2002

  15. How Do Leading Firms Conduct Intelligence? • Broadcast intelligence to users • Increase number of intelligence users • View intelligence as decision critical • Intelligence is part of managers’ duties • Institutionalize the intelligence function • Manage corporate knowledge assets • Maintain and rely on during a recession  Jerry P. Miller 2002

  16. Primary Information Sources: • Interviews with internal experts, customers, and suppliers • Industry analysts • Business editors • Associations • Observations • Unpublished documents  Jerry P. Miller 2002

  17. Secondary Information Sources: • Internal and external databases • Industry and government reports • Directories • Statistical sources • Newspapers and magazines • Trade publications  Jerry P. Miller 2002

  18. Criteria Not to be Overlooked: • Balance strategic & operational needs • Adjust the function as the market changes • Determine locus of decision making • Company’s structure • Corporate culture • Market environment  Jerry P. Miller 2002

  19. Common Problems: • Managers don’t value intelligence • Managers consider intelligence a luxury • Inability to incorporate it into strategy • Managers believe “I know my industry!” • Unskilled people try to perform intelligence • Managers hoard information • The function doesn’t meet decision makers’ needs • No metrics developed to measure impact on bottom line • Intelligence is seldom used by decision makers  Jerry P. Miller 2002

  20. Creating the Intelligent Firm: • Adjust decision-making process & culture • Open communication lines • Sensitize firm to marketplace changes • Align intelligence to decision-making • Support the process with technology • Develop an evaluative mechanism  Jerry P. Miller 2002

  21. Excellent Intelligence Service: • Clearly define intelligence needs • Use creative sources • Understand the complexity of the issues • Upgrade information to intelligence • Offer recommendations, suggestions, and alternatives • Obtain feedback from decision makers  Jerry P. Miller 2002

  22. Motivator: What’s in It for Me?

  23. Motivational Issues • What are the benefits to the firm? • What are the benefits to decision makers? • What are the benefits for intelligence professionals?  Jerry P. Miller 2002

  24. Predict & Measure the Impact of the Intelligence Function • Determine where & how impacts will occur • Determine your competitive advantage • Assess appropriateness of costs (cf. CFO) • Measure impacts in terms of: • Time- or cost-saving • Cost avoidance • Revenue enhancement  Jerry P. Miller 2002

  25. Core Roles: primary researchers secondary researchers analysts integrators Supporting Roles: system builders data builders knowledge builders protectors decision makers Various Roles in the Intelligence Process  Jerry P. Miller 2002

  26. Intelligence Skills Come From: • Personal traits • Formal education • Mentoring • Work experience  Jerry P. Miller 2002

  27.  Jerry P. Miller 2002

  28. Competitive Intelligence: It’s Current Status

  29.  Jerry P. Miller 2002

  30.  Jerry P. Miller 2002

  31.  Jerry P. Miller 2002

  32.  Jerry P. Miller 2002

  33.  Jerry P. Miller 2002

  34. Analytical Tools Used: • Competitor profiles: 88.9% • Financial analysis: 72.1% • SWOT analysis: 55.2% • Scenario development: 53.8% • WIN/loss analysis: 27.3% • War gaming: 27.5% • Cojoint analysis: 25.5% • Simulation/modeling: 25%  Jerry P. Miller 2002

  35. The Status of CI after 9/11  Jerry P. Miller 2002

  36. 118 Competitive Intelligence professionals have participated.  Jerry P. Miller 2002

  37. Consulting 35 Info technology 12 Telecom 9 Chemicals 6 Financial services 5 Pharmaceuticals 5 Consumer package goods 4 Manufacturing 3 Retail 3 Media 3 Government 2 Health care 2 Publishing 2 Engineering 2 Power generation Industries Represented:  Jerry P. Miller 2002

  38. Security 2 Information retrieval 2 Legal Accounting Environmental services Real estate Services Business research Direct mail Automotive Industries Represented:  Jerry P. Miller 2002

  39. Countries Represented: • U.S. 106 • Spain 3 • Canada 3 • Germany 2 • Australia 2 • Switzerland 1 • Sweden 1  Jerry P. Miller 2002

  40. Since 9/11, 32% have found it more difficult to gather information from government Web-sites.  Jerry P. Miller 2002

  41. Since 9/11, 53% have found it more difficult to gather information from corporate Web-sites.  Jerry P. Miller 2002

  42. Since 9/11, 49% have experienced differences inthe willingness of people to talk with them when they conduct primary research.  Jerry P. Miller 2002

  43. Since 9/11, 66% reported that the heightened awareness about security affected the way theirresponsibilities were defined .  Jerry P. Miller 2002

  44. Since 9/11, 72% reported thatresearch targets and topics, methodologies and budgets have changed .  Jerry P. Miller 2002

  45. Since 9/11, 45% have changed how they collect information .  Jerry P. Miller 2002

  46. Since 9/11, 58% have changed how they protect their proprietary information .  Jerry P. Miller 2002

  47. Since 9/11, 41% have altered their use of third-party researchers .  Jerry P. Miller 2002

  48. Since 9/11, 68% have heightened their security efforts.  Jerry P. Miller 2002

  49. Since 9/11, 49% have re-examined the legal and ethical aspects of their CI function .  Jerry P. Miller 2002

  50. Since 9/11, of the 70 respondents who have re-examined these issues, 48% have placed additional parameters on how they collect information .  Jerry P. Miller 2002