SCIP Insight eBulletin
  October 2010  |  Vol. 2 Issue 10  CONNECT

Knowledge is Power:
Utilizing Competitive Intelligence to
Improve Strategic Planning

  Cormac Ryan

In today’s competitive market environment, in-depth knowledge of competitors is a fundamental prerequisite for effective strategic planning. The need for competitive intelligence is acknowledged by virtually every major national and multinational firm I’ve encountered. Managers recognize that they need to know more.

But recognizing the need for ongoing intelligence isn’t enough. Business organizations need to incorporate three steps into the preliminary planning process for a strategically sound intelligence program.

1. Obtain top management involvement and input at both ends
    of the project.

The people in the corner offices are there for a reason: they’re smart, they tend to take a long-term strategic view of the company and they’re the bosses. Wherever possible, include top management, such as the CEO of a mid-sized firm, or the head of the business unit of a large firm. This is not based on a feel-good “I spoke with the boss” motive; we need to get their inputs above and beyond what they’ve communicated to their people about the project.

This is particularly helpful with a first project for a manager. For example, when interviewed about a project, the president of the wireless data unit expanded its scope to include several other applications and one other indirect competitor. He’d had earlier discussions with his people about the project and these extras were never mentioned – he hadn’t thought about them at the time. As trained interviewers, we include “what about this?” and “what about that?” questions, and focus strictly on the intelligence project during these management interviews. The end result is a more comprehensive evaluation of the competitive landscape, and top management endorsement of the conclusions and recommendations – in part because they’d been more closely involved in the process.

Having top management involved at the other end of the process – the presentation of the findings, conclusions, and recommendations – is equally important. One retail company president was “lukewarm” in his attitude toward an intelligence analysis of other retail chains. He felt that he knew enough about the competition. When we interviewed him he was cordial and cooperative, but made it clear that he was skeptical about the value of a full-blown competitive intelligence analysis.

When he attended the final presentation he came in with a show-me mindset and asked some tough questions, which we were able to answer. By the end of the presentation he was convinced that the project was valuable and was asking his people how soon they could implement the recommendations. Top management’s involvement at both beginning and end is necessary for every project, including those with long-term clients.

2. Take advantage of outside professional resources.

Outside help is necessary for companies without an internal competitive intelligence team, but it also makes sense for some projects or components of other projects, particularly if there is an aggressive delivery date. Outside resources also have direct access to additional experts and information sources.

The work the internal intelligence teams perform is extremely valuable. But obtaining primary information through outside interviews and investigative reporting can complement the work done by the internal people.

3. Develop both offensive and defensive parameters to the outcomes.

A strategically sound competitive intelligence program relates back to the company’s objectives. The findings, conclusions, and recommendations should address these objectives, and help the company achieve them as a result of what’s been learned. The presentation should include specific recommendations to help keep the customers you have (defensive) and get the customers you don’t have (offensive).

Every intelligence study spends significant time analyzing competitive strengths and weaknesses. In some cases, this includes a SWOT (strengths, weaknesses, opportunities, threats) analysis where the offensive and defensive strategies and tactics emerge. Companies go on the offensive to capitalize on competitive weaknesses (an opportunity), and at the same time go on the defensive to protect ourselves against competitive strengths (a threat).

Within an existing customer base, an effective intelligence analysis can segment customers to determine which customer groups are more or less vulnerable to outside competitive activities, and recommend specific plans to defend the weak segment.

There’s good news and bad news

Competitive intelligence work is thorough, professional, and objective. Thoroughness means working hard and digging deep, and doing a complete job in presenting findings, conclusions, and recommendations. Professionalism entails maintaining legal and ethical standards, and being consummate professionals in our dealings with everyone we encounter on the project, inside and outside the organization. It also mandates the proper treatment of confidential materials and information.

Objectivity encompasses how we analyze the information, and how we present it to our clients. We need to tell them what they need to hear, rather than what they may want to hear. We need to tell them, without any political or corporate “spin,” exactly what we learned and what we think they should do to solve the problems and capitalize on the opportunities. Sometimes our presentations or parts of them aren’t received with great enthusiasm. People prefer good news to bad news, and they prefer to see a presentation that corroborates their view of the landscape. Sometimes our intelligence clients take our advice, and sometimes they don’t. Our clients don’t always agree, but they should always listen.

That’s much easier said than done, so how is it done? There are several things competitive intelligence clients really appreciate:
  1. Thoroughness, professionalism and objectivity. Be totally professional, totally honest, and don’t overlook anything.
  2. The ‘futures’ information on competitors. Including this makes for compelling presentations. More importantly, it’s extremely valuable in long-term planning.
  3. Information beyond the client brief. Address all the issues in the intelligence project, then look for new, unanticipated findings, conclusions, and recommendations uncovered during the project.

We all must demonstrate real value in these projects and their outcomes. And beyond the normal due diligence and the points suggested above, we’ve learned that we constantly need to revisit the project in the context of the client’s strategic objectives. Ask yourself: “is this work helping them achieve those objectives, and is there anything else we can do to make this even more effective and relevant?”

How are we doing?

Competitive Intelligence practitioners sometimes ask “if we do all this, will you guarantee that we’ll succeed?” My answer is no, but if you don’t do it, I guarantee that you won’t succeed. It’s like doing all the homework and studying diligently for the exams – it won’t guarantee every student an A, but if they don’t do it, they’ll probably get a grade closer to the other end of the alphabet. And as I said earlier, don’t stop at objectives and preliminary plans – go all the way to the end of the process.

About the author:

Cormac Ryan, President of TMA, worked with Kodak, Nabisco and three global advertising agencies prior to joining TMA in 1992. He worked in the U.S., Mexico, Canada, and Argentina, and directed CI projects in more than 25 countries. Cormac held a BA in economics from Columbia University and an MBA in marketing from New York University, and for six years was adjunct professor of marketing at the NYU and Pace graduate business schools in New York.

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