Competitive Intelligence Management: History and beyond

1. Competitive Intelligence
Management
Dr. Hendry Hartono SE. MM.

2. AGENDA:
1. History of CI
2. Overview
3. Defining CI
4. Role of CI
5. Categories of CI
6. The CI Process

3. History of CI

4. History of CI
The CI process and its organizational model have gone through significant evolution
over the past 30 years.
This evolution has been driven by:
1. Technology has transformed both the gathering of data and the diffusion of
information. Centralized collection is no longer a profitable use of a dedicated CI
resource. Diffusion of information is easier via informal networks and collaborative
workspace technology, as well as Web-based aggregators of information.
2. CI resources, in the form of large departments with many managers and analysts,
has proven hard to justify using traditional measures of ROI.
The nature of intelligence makes it impossible to measure its value directly. Attempts
to use customer-satisfaction surveys or “output” measures were too removed from
the real impact to afford a rational approach to valuing the activity.

5. Overview
The biggest misconception about competitive intelligence is the
belief that it is information about competitors.
This is a remnant from an early adoption of the military/government
model, where the target of
intelligence is “the enemy.”
Translating this to
“competitor monitoring”
Resulted in lower ROI to intelligence, diminishing the role of CI to
tactical marketing/product information and depriving companies of
the major benefit of CI as the necessary condition for enterprise
agility.

6. Overview
The leading drivers of strategic chance in our current environment is
globalization

7. Overview
Economies of scale, the foundation on which big companies have based their
dominance in the Industrial Era, are no longer such an advantage.
Changes in information technology, in the financial system, in just-in-time
production techniques, and in the rise of companies offering distribution and
support systems which previously only the largest companies could afford.
The diseconomies of scale – overhead, inflexibility – are becoming
increasingly powerful.
Winning firms are organizations that most successfully master the business
issues critical to their performance, and develop the most precise understanding
of definitions and creation of value.
Competitive advantage has a lot to do with leveraging the knowledge assets of
the firm, while at the same time determining how competitors are likely to
leverage theirs.
A comprehensive and thorough understanding of competitors is thus an
essential ingredient to developing and executing winning strategies.
Organizations, therefore, need integrated analysis frameworks to identify and
assess the current and potential strategies of current and future competitors.

8. Overview
In analogy to these considerations, a company also requires:
information
on current and future markets, competitors, customers, technologies
etc., so that it can position itself in an optimal way, make the “right”
decisions and ultimately realize them at the most ideal point in time.
“A strategic plan can be no better than the
information on which it is based.”
MONTGOMERY, D. B./WEINBERG, C. B. (1979): Toward Strategic Intelligence Systems, in: Journal of Marketing,
1979, Volume 43 (4), pp. 41–54

9. Conversion Information into Intelligence
Source: Ben
Gillad, 2016

10. Defining CI
A process or practice that produces and
disseminates actionable intelligence by planning,
ethically and legally collecting, processing and
analysing information from and about the internal and
external or competitive environment in order to help
decision-makers in decision-making and to provide a
competitive advantage to the enterprise.
Source: Rene Pellissier, Tshilidzi E. Nenzhelele (2013)

11. Defining CI - Previous literature

12. Defining CI - Previous literature
Common and unique characteristics of CI are:
1. Process indicates that CI is conducted step by step.
2. Product indicates that CI is a deliverable of a completed process.
3. Practice/discipline indicates that CI is a profession that follows a code of ethics.
4. Actionable is used to indicate that CI leads to actions or decision-making.
5. Systematic indicates that CI follows a planned procedure.
6. Ethical indicates that CI follows an established code of ethics.
7. Legal indicates that CI activities observe applicable laws in countries or regions
where it is practised.
8. Purpose/goal refers to the objectives of CI.
9. Information refers to collection of facts or data.
10. Art indicates that CI has its origin in the military.
11. Activity/method refers to actions taken to complete the CI process.
12. External/competitive environment indicates that information is collected from the
external or competitive environment.

13. CI vs BI vs MI
Competitive Intelligence. What are they doing that your not doing and is there a
compelling reason to do it? Are all of your competitors launching a new product, are
they spending additional funds on legal and why? These and many more are all things
you need to know if you want to stay competitive.
Business Intelligence: An analysis of what drives business in your company and a
great tool to see where you can cut costs and where you should spend additional
resources to keep driving revenue. Essentially, business intelligence can tell you if
your company is running efficiently and where you need to improve.
Market Intelligence: This takes a more holistic approach of the entire market
environment. You want to know how the market is doing as a whole, if people can
spend money and what they are eager to spend it on. What are the next big trends
that you want to lead as a trendsetter rather than the guy who just starts catching up
when the next big spending trend is already on the horizon.
Source: Sven M. Bannuscher (2018)

14. What CI is “NOT” :
1.CI is not economic espionage
2.CI is not simply database
search
3.CI is not a crystal ball

15. Role of CI
Too many companies invest in improving the
sophistication of the information (e.g., Big Data
and Predictive Analytics) without addressing the
real problem of an abundance of data but small
insights. The result is duplicative spending on
information that ends up being ignored and a
problem of rising “noise” that desensitizes the
managerial cadre to truly significant market
signals.

16. Role of CI
1. to provide an early warning of opportunities and threats stemming
from:
• technology changes
• government policy changes
• social and demographic changes; and
• competitive actions with the potential to upset the market
dynamics.
2. to ensure greater management awareness of changes among the
entire set of high-impact players and the implications for the
company’s relative strategic positioning;
3. to ensure that the strategic planning decisions are based on
relevant and timely understanding and predictions of the
competitive dynamics; and
4. to provide a systematic audit of the organization’s

17. Categories of CI
1. Market Intelligence – acquisition and analysis of information
pertaining to trends, geopolitical issues and regulations in a market
2. Partner Intelligence – keeping tabs on every individual and
organization that has a form of value network with the value chain
of a particular firm
3. Competitor Intelligence – monitoring and analysis of key,
budding, new and probable competitors
4. Technical Intelligence - examining every accessible research and
development report and allied technical application in order to
keep track of competitive technical know-how, make out business
alternatives, and generate appropriate and well-timed warning
signal to decision makers.
5. Customer / Prospect Intelligence – continuous identification and
analysis of demographic factors, budget cycles, key internal

18. CI Process – Step 1 Planning and Focus
In this phase the company’s defines their needs in terms of :
1. what information is needed?
2. Why is it needed?
3. When is it due?
Effective intelligence processes:
1. do not attempt to collect all possible information or research
everything related to a subject
2. only focus on those issues of highest importance
3. it involves “key intelligence topics”

19. CI Process – Step 2 Collection
The intelligence process encompasses collection of data/information
from external and internal sources, analysis/ synthesis of the data
into competitive insights, and deployment of the insight at the right
time and the right place to inform various decisions/plans/ strategies
across the organization.
Internal Source – published reports
External Source – secondary source  WEB
Primary Collection – interviewing customer
Commissioned Research - buy from research company

20. CI Process – Step 3 Analysis
analysis of collected data to identify patterns, relationships, or
anomalies. It involves interpreting and translating the collected raw
data into “actionable intelligence”.
Several analytical techniques:
1. SWOT (Strengths, Weaknesses, Opportunities, and Threats)
analysis
2. Competitor profiles
3. Environmental scanning
4. Modelling, PEST
5. Industry analysis (Porters Five Forces Model) -Financial analysis
6. BCG growth/share portfolio matrix -GE Business screen matrix –
Scenarios
7. War gaming

21. CI Process – Step 3 Analysis
To anticipate transitions in industry structure, the Competition Analyst
must track four major change drivers:
1. Technology changes can be in the form of disruption but also in
the form of new technology used by rivals, suppliers, or even a
buyer. For example, the Internet raised the bargaining power of
buyers more than anything else. In some industries, like music,
this effect meant the end of many record companies.
2. Government has had an enormous, often destructive, influence
on the profitability of industries. Government regulation,
government corruption in some countries, and government
antitrust initiatives can completely change the structure of power
in an industry. Anticipating political developments is hard, but it is
a necessary part of the
CI perspective. Understanding the unintended consequences of
government policies (especially so-called “progressive” policies)

22. CI Process – Step 3 Analysis
3. Social and demographic changes are the slowest but probably
the most powerful in their effect on the prosperity of rms
especially in consumer markets. For example, the effect of aging
on the food industry can’t be underestimated. Companies go
bankrupt when their consumers change and they don’t. For
example, IBC was once the largest bakery in the U.S. and the
maker of Hostess, but it failed to adapt to changes in
consumption of fat and our and went bankrupt in 2004.
4. Finally, some competitive action is a change driver—although
most are not. For example, the entry of Microsoft into the
handheld organizer market doomed Palm Pilot, as Microsoft’s
business model was very different from Palm Pilot’s.

23. CI Process – Step 4 Communications and
feedback
The results of the intelligence process need to be communicated to
the appropriate decision-makers within the firm in a format that is
easily understood.
There are several ways of presenting and disseminating competitive
intelligence throughout a firm. Intelligence communication can take
place via ad hoc reports, alerts, e-mails, presentations, news briefs,
competitor files and special memos.
Some companies hold periodic competitive debriefings for senior
management in order to discuss the firm’s principal competitors, their
performance, their possible actions and the implications for the firm.
Feedback activities involve measuring the impact of the intelligence
that was provided to the decision makers.

24. CI Management

25. CI Management – Applications:
1. Current Competitor Activities and Strategy Monitoring
2. Customers, Vendors and Other External Allied Monitoring
3. Operational Performance and Benchmarking
4. Product/Service Sales and Marketing Support
5. Strategic Probabilities and Possible Futures
6. Internal Knowledge Management
7. Intellectual Property Exploitation and Protection
8. Mergers, Acquisitions, Alliance and Investment Support
9. Long-Term Market Prospects & Spotting Weak Signal (Blind-
spots)
10.Counter-Intelligence & Information Security
11.Legislative and Regulatory Activity as well as Impact on
Business Issues
12.Executive Decision-Support and Competitive Strategy Planning