Competitive Intelligence 2.0 – Incisive Intelligence, Collaborative Innovation & a Bottoms-Up Approach to Getting the Upper Hand

1. CI 2.0 – Incisive Intelligence, Collaborative Innovation & a Bottoms-Up Approach to Getting the Upper Hand Arik R. Johnson Predictive Intelligence 2007 Development & Leadership Institute Princeton, New Jersey USA CEO & Managing Director, Aurora WDC Conference Session [email_address] Tuesday 23 January 2007

4. Porter’s Five Forces Model

5. Impacts on Planning & Execution Your Company’s Plans and Execution Vision and Grand Strategy Strategic Plans Market Success Operational Projects and Programs Tactical Execution Other (More-or-Less) “Uncontrollables” Competitors’ Plans and Actions New Forms of Competition X Y Z P Q R A B C Indirect Competitors Direct Competitors Government and Regulatory The Economy Technology Market Trends Industry Rationalization Other Unknowns

8. Traditional CI Follows a Disciplined Process for Information Collection and Analysis Deliver, Inform & Recommend Planning & Direction Secondary Research Analysis & Production Primary Research Tactical Users & Strategic Decision Makers Needs The Traditional CI Cycle

10. Two Fundamental Competitive Analysis Model Examples SWOT Analysis Core Competence

11. Tactical CI Project Example: Cost Analysis

12. Level of CI Involvement in M&A Stage ID Evaluate Due Consum- Criteria Targets Analyze Diligence Recommend Negotiation mation Integration Level of CI Involvement High Low Intelligence Research Business Units Finance Technical Assessment Legal Executives M&A Specialists Transition Team Logistics HR

14. Competitors, Customers & Technologies Are Complex Interdependencies CI is Learning to See Clearly through Market Illusions

15. The Duality of Intelligence Both Decisive & Incisive Sensing Incisive Scanning for Trends, there is no “Decision” to be made Recognizing “Pattern Vectors” Framework for Interpretation Implications for the Reader Bottom-Up Driven by Trends Outcome is Observation Hypothetical Decisive Frame of Reference is the Decision, Less Trend-Dependent Framework for Analysis Compares Options & Outcomes Recommendations and Trust Top-Down Driven by Issues Decision & Action vs. ‘Nariyuki’ Factual

16. Different Missions, Different Approaches Specialist Slower Production Less Output, More Analytical Agenda Driven by Contact Network Lots of Subject Matter Knowledge Seeks Explanation of the Subject Investigative Very Slow, Curious, Historical Little Output, Highly Analytical Questions Official Positions, Listens to Nonspokesmen Operates Outside Routine Agenda of the Publisher Generalist In a Hurry Lots of Output, Less Analytical Agenda Driven by the Publisher Little Knowledge of Subject Matter Seeks Volume of Public Interest

20. Consumers “Hire” Products to Do “Jobs” for Them Concentrate Less on What Customers “Want” and More on What Customers “Need”

21. Disruptive Innovation Theory Sustaining Innovations Better Products Brought to Established Markets Low-End Disruptions Target Overshot Customers with a Lower Cost Business Model New-Market Disruption Compete Against Nonconsumption Difference Performance Measure Time Nonconsumers or Nonconsuming Contexts Performance

22. Disruptive Technology

24. RPV Theory: Building Capabilities Processes Ways to Turn Resources into Products/Services Hiring/Training Product Dev. Manufacturing Budgeting Research Values Prioritization Criteria for Decision-Making Cost Structure Income Statement Customer Demand Opp. Size Ethics Resources Assets the Firm can Buy or Sell, Build or Destroy People Technology Products Equipment Cash/Brand/Distr.

26. Process of Predicting Industry Change Signals of Change Strategic Choices Influencing Success Likely Outcome of Competitive Battles

27. The CI Think Tank Model TASKING > SENSING > INTERPRETATION