BLAST FROM THE PAST
The Establishment of CI –
A European Perspective
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By Christian Krummenast
Noraco International
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After joining SCIP and learning about competitive intelligence (CI) theory, I was eager to learn more about the development of CI practices in Europe. As a result, I conducted a cross-country, cross-industry survey of 138 European companies. Seventy-eight were large multinationals. Of those, 58 were chemical industry related and the rest were in various industries including automobile, finance/banking, food and energy. The remaining 60 companies were small- and medium-sized enterprises (SMEs).
My research objectives were to:
- Identify participating companies’ organizational structure, use, implementation and definition of CI activities
- Understand why the European definition, image and general understanding of CI differs from that of North America
- Recognize how the different European languages and cultures can result in ethical issues
- Identify future developments and trends
I conducted the research from May 2008 to March 2009, targeting the highest ranking CI manager in each organization via e-mail, phone or face-to-face interviews based on the respondent’s preference; phone interviews predominated. The questionnaire included a combination of closed- and open-ended, qualitative and quantitative questions. The multinational return rate was 45 percent versus 55 percent for the SME’s. The primary reasons companies declined participation was secrecy or lack of time. All participants were guaranteed discretion and anonymity.
For the survey, I defined “competitive intelligence” as a systematic and legal approach to any strategic foresight activity which collected and analyzed relevant strategic data concerning competitors, customers, suppliers and the company’s business environment.
General Research Results
- Many multinational companies have relatively mature CI-related operations, particularly in Germany and Scandinavia. However, SME’s often cited insufficient human resources, internal knowledge or financial capital to support a formal CI function.
- Most companies have not established a clear definition or understanding of competitive intelligence. In addition, CI often has negative connotations associated with military activities and industrial espionage.
- Challenges in developing a common CI definition include the translation of English definitions into local European languages, a lack of academic research and regional differences in the understanding of ethical norms and national laws, as well as search/search engine behaviors.
- The term “competitive intelligence” was used within large multinational companies but not in SME‘s. It appears that many companies prefer the terms “market research” or “market and business intelligence.”
- Due to the many different languages within Europe, the process of conducting non-English, multinational intelligence research and analysis is complicated and requires a sophisticated approach. The variety of sources for primary and secondary data requires multilingual CI employees. A large amount of material is available in German and English via the internet and other open sources, but less so in French, Spanish, Italian and Dutch, and especially in Czech, Hungarian, Croatian, Serbo-Croatian, Romanian, Bulgarian, Greek and Turkish.
SME Research Results
- SME’s often do not have sufficient human resources, internal knowledge, skillset or budget to support a CI function
- The concept and definition of CI is not well known. Often, CI is synonymous with market research
- CI has a questionable reputation due to misleading press linking it to espionage and military intelligence
- When CI exists, the approach is tactical and includes only ad hoc, secondary (print) research
- “We don‘t need CI because we already know our competitors and customers”
- Managers had unrealistic expectations of what CI can accomplish
- CI clients had difficulty defining their information requirements and setting clear goals for the effort
- Management and business owners had little-to-no support or understanding of CI
Large Multinational Company Research Results
- All respondents confirmed that they perform CI-related activities but refer to it as market Intelligence (29 percent), market research (26 percent), business intelligence (20 percent), corporate development (14 percent) or, infrequently, competitive intelligence (11 percent).
- From nine choices, participants selected the top five reasons why they practice CI:
- Gaining information about competitors/competitive environment (86 percent)
- Creating strategic advantages (74 percent)
o Early warning and identification of market threats (71 percent
- Strategic development (66 percent)
- Provide support in strategic decision making (63 percent)
- Over half of the respondents have been employing CI for 5 years or less; 14 percent for more than 12 years.
- All respondents said they follow their corporate ethical guidelines in accordance with their national laws. Respondents who are SCIP members also adhered to the SCIP ethical codex. However, due to varying national laws, it is questionable whether respondents are adhering to the same “rules.”
- Information acquisition is primarily conducted internally, either by the CI unit (69 percent) or another department (25 percent). Outsourcing is currently being considered by only 6 percent of the respondents.
- Company employees, such as field sales, collect information about customers, competitors and market developments as part of their job responsibilities. However, almost 60 percent of respondents do not integrate this knowledge into their intelligence primarily due to lack of internal technological support, or because employees do not share such knowledge for fear of being replaceable.
- Sixty percent of respondents have implemented CI technology tools such as research and analysis software or knowledge management programs. However, due to the economy, respondents expect budget cutbacks resulting in no additional investments in CI-software.
- When asked to specify the scope of their CI unit, 63 percent said they had a global scope (CI activities include all continents), 29 percent had an international scope (CI activities concentrated within select countries in Europe and Asia or North America) and the remaining eight percent claimed national and regional scopes.
- Seventy percent of the respondents practiced CI as part of another function; the remaining 30 percent had independent CI units.
- CI clients were heavily skewed toward top management, with decreasing occurrence in middle management and amongst the company’s experts and professionals. These results hint at CI’s impact on corporate management and strategic planning.
- CI’s clients were predominantly in strategic planning, followed by marketing and sales, corporate development and R&D.
- Approximately 65 percent of respondents have a dedicated manager/director for their CI activities. However, only 4 of these held titles that include the terms CI or Intelligence. More common titles were global director of market research, director/head of strategy, director of corporate development or vice-president of business development.
- Most respondents reported small competitive intelligence teams with eighty percent having one to five employees, 14 percent having five to 10 employees and six percent having more than 10 employees. Note: more than 60 percent of these employees had not yet received CI training or education.
- From a list, respondents ranked their top three desired improvements:
- to better use internally available knowledge
- to generate more involvement and support from top management
- to improve the identification of information requirements
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In anticipating the future state of their CI activities, respondents expected:
- CI to have a greater impact on their company’s strategic and operative decision making
- To develop and use additional CI-specialized software
- To receive additional training and education for CI personnel
- Better integration within their organizations to enable application to day to day business.
Conclusion
Without the ongoing efforts of SCIP, CI consultants, trade organizations and academic institutions, the practice of CI in Europe will continue to exist predominantly among large multinational companies.
About the author
Christian Krummenast has more than 15 years of experience in the international arena including various positions in the U.S., The Netherlands and Germany. He has sound experience in strategic planning, marketing and sales, market research and intelligence, global sourcing and business development.
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Share your professional views and experience in the field of
Competitive Intelligence. See upcoming themes slated for the
monthly SCIP Insight eBulletin below; choose a topic and
submit an article: |
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Dec |
End of Year Recap |
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Jan |
A Look Ahead |
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The Strategic and Competitive Intelligence Professionals
(SCIP) merged with the non-profit Frost & Sullivan Institute
in 2009. The partnership between Frost & Sullivan Institute
and SCIP provides a powerful opportunity to enhance the
benefits SCIP offers its members.
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Share your professional views and experience in the field of
Competitive Intelligence. See upcoming themes slated for the
monthly SCIP Insight eBulletin below; choose a topic and
submit an article: |
|
|
|
Dec
|
End of Year Recap |
|
|
Jan |
A Look Ahead |
|
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|
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|
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The Strategic and Competitive Intelligence Professionals
(SCIP) merged with the non-profit Frost & Sullivan Institute
in 2009. The partnership between Frost & Sullivan Institute
and SCIP provides a powerful opportunity to enhance the
benefits SCIP offers its members.
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