AICISM

Introduction

Dr. Pallavi Sharda Garg

What is Competition? AICISM
What is Competitive Intelligence AICISM

• Competitive intelligence (CI) is the

gathering of publicly-available information
about an enterprise's competitors and the
use of that information to gain a business
advantage.
• The goals of competitive intelligence
include discerning potential business risks
and opportunities and enabling faster
reaction to competitors' actions and
events.
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• Publicly-available information, refers to

any information that can be legally
obtained.
• Sources of publicly available information
include -- company directories, legal filings
and documentation from government
agencies and regulatory bodies.
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• According to the Society of Competitive

Intelligence Professionals (SCIP) code of
ethics, those conducting CI investigations must
refrain from illegal activities, disclose
information about their identity and corporate
affiliation prior to any interviews, and provide
honest and reliable information as a result of
the investigation. The covert and often illegal
gathering of competitors' information is known
as industrial espionage.
 Breaking Down 'Competitive AICISM

Intelligence '
• Competitive intelligence is not simply competitor
analysis or "knowing your enemy."
• It is knowing your competitors and the
competitive landscape, as well as customers and
how they fit into every aspect of the marketplace.
• It is also knowing how the marketplace and a
business may be disrupted by a wide variety of
events, how distributors and other stakeholders
could be impacted, and how new technologies
can quickly render invalid every assumption.
 Examples AICISM

• sales representative, it may mean tactical

advice on how best to bid for a lucrative
contract.
• To top management, it may mean unique
marketing insights to gain market share
against a formidable competitor.
 Why CI AICISM

• To beat your competitors you must know

exactly what they are doing.
• As markets evolve even more rapidly and
companies adapt their plans much faster,
the demand for competitive intelligence
has spiralled.
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• • In the early 1990s, a study of the packaged food,

telecommunications and pharmaceutical industries reported
that organizations that engaged in high levels of CI activity
show 37% higher levels of product quality, which is, in turn
associated with a 68% increase in business performance
• • In the mid 1990s, NutraSweet’s CEO valued its CI at $50
million. That figure was based on a combination of revenues
gained and revenues which were ‘‘not lost’’ to competitive
activity
• • A more recent PricewaterhouseCoopers’ study of ‘‘fast
growth’’ CEOs reported that ‘‘virtually all fast growth CEOs
surveyed (84%) view competitor information as important to
profit growth of their company’’
 The CI process AICISM

• five basic phases, each linked to the

others by a feedback loop.
1. Establishing the CI needs
2. Collecting the raw data
3. Evaluating and analyzing the raw data.
4. Communicating the finished intelligence.
5. Taking Action
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• Establishing the CI needs. This means

both recognizing the need for CI and
defining what kind of CI the end-user
needs. It entails considering what type of
issue is motivating the assignment, what
questions the end-user wants to answer
with the CI, who else may also be using
the CI, and how, by whom and when the
CI will ultimately be used.
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• Collecting the raw data. CI professional translates

the end-user’s needs into an action plan, either
formally or informally. This usually involves identifying
what questions need to be answered, and then where
it is likely that he/ she can collect the data needed to
generate the answers these questions.
• Then he/she can identify the optimal data sources,
that is, those that are most likely to produce reliable
and useful data, given the goal and the constraints.
From there, the collection begins, both of secondary
and primary data
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• Evaluating and analyzing the raw data. In this

phase, the data that was collected is evaluated
and analyzed, and is transformed into useful CI
• Communicating the finished intelligence. This
involves preparing, and then presenting, the
results in a usable format and in a timely manner.
The CI may have to be distributed to those who
asked for it and, in some cases, to others who
might also profit from having it. That secondary
distribution is not as common as it could be
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• Taking Action. This means using the end-

user actually uses the CI in decision
making. The CI may be used as an input
to decision-making, or it may be the first of
several steps in an overall assessment of,
for example, a new market. The decision
of how and when it is used is made by the
end-user, not by the analyst
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Virtual Monopolies

• Differentiation
• Unique products
• E.g Mcdonalds : Burger
• Differentiation on the basis of :
- Production technologies, product features,
raw materials used, price levels, discounts &
rebates,
 Competition AICISM

• Direct from same product manufacturers

• Indirect from suppliers etc.
Where do companies compete? AICISM

• Primary form of competition is that which

takes place between companies for
customers
• Main competitive battlefield is the
marketplace
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• Other areas are :

- Strategic – competition for acquisitions
- Technology – competition for patentable products and
processes or for license
- People – competition for the staff
- Finance – competition for investors and funds
- Locations – competitions for manufacturing, warehousing
and office sites
- Suppliers – competition for raw materials or components
- Distribution – competition for shelf space
- Markets – competition for customers
Marketing and competitive strategies
AICISM

• The sequential recessions of the early

1970s, 80s and 90s resulted in slowdown
in overall economic growth and an overall
trading climate in which growth required
increase in market share, hence
competition intensified
• This is a result of number of defined
forces:
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• Higher financial performance demands

placed on suppliers
• Diversification
• Globalization
• Technology
• Outsourcing
• Improved information flow
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• Marketing has therefore evolved to

embrace 2 separate streams of strategy:
- Customer Facing – concerned with
satisfying the needs of customers
- Competitor strategy – designed to win
customers but by ensuring that the
companies products or services
outperform.
 Competitive environment AICISM

• Two extremes of competitive activity:

1. Natural Competition
Evolutionary process, competitive activity
progressed incrementally by trial and error,
competitors adapt slowly to each other and
to the changing market environment
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• 2. Strategic Competition
Is revolutionary, seeks to make a very large
change in competitive relationships
It increases the normal level of business risk
and tends to be short lived
If a competitor initiates strategic competition
, retaliation is essential for survival.
 Mechanisms by which companies AICISM

compete
• Competitive strategy is often linked with
warfare.
• In business, competition is for customers
and resources
• Both are active participants in the warfare.
Their choice is the outcome of the warfare.
 Scale AICISM

• Perception of competition tends to vary

according to the seniority and role of staff
member considering it.
• Ranges from highly strategic view to short
term tactical issues
- Strategic competitive objectives
- Tactical competition
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• Strategic competitive objectives

- Undermine competitors offers so that the
attractiveness of the suppliers own offer is
maximized
- Position the company in a way so that any
head on competition to bring down prices is
avoided
- Anticipate competitors actions so that their
effectiveness can be neutralized
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• Tactical competition
- Revolves around :
- Competitors implement unanticipated
changes in their activities- may include
product launches, withdrawal from the
business, changes in selling activity etc.
- When a change incurs within the customer
base or in the supply chain
- When economic conditions change
 Intelligence AICISM

• CI is the process by which companies

inform themselves about every aspect of
their rivals activities and performance
• No battle can be fought without intelligence
on the opposing forces.
• In all competitive situations the accuracy
and timeliness of the intelligence that is
held may have a determining influence on
the outcome of the engagement
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• It is preferable to know competitors

intentions and it is extremely useful to
know how they intend to achieve them and
when and where they are likely to launch
an attack
• The more information you have about him,
greater the chance of winning
 Applications for Intelligence AICISM

• CI provides a forward view of technology,

customers and customer requirements
that gives us early warnings of significant
changes
• This provides a basis for a strategy that
differentiates companies from their
competitors
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• Intelligence is used in 3 situations

1. Curiosity
2. Emulation – initiate, strive to match
3. Anticipation – Realize beforehand
 Curiosity AICISM

• It is usually satisfied by information that is

gathered through trade gossip, from staff
that have previously worked in competitive
companies, from published media and
other informal contacts
• No attempts are made to verify the
information collected and such companies
often live in a false competitive
environment
 Emulation AICISM

• It recognizes that all companies have

something to learn from their competitors.
E.g.
- When a company has encountered a problem
that it is having difficulty resolving with its own
resources?
- When existing or new competitors have
launched an initiative that appears to be
successful?
 Anticipation AICISM

• To recognize current and future competitive threats

and to devise strategies that will neutralize their
effectiveness and gain some form of competitive
advantage.
• E.g.
- Aggressive players seeking rapid gains in market
share
- Dominant players with major positions to defend
- Players who have recognized that they are
seriously vulnerable to attack.
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• Major players of CI are in IT, healthcare,

ecommerce, financial services
 Companies to watch AICISM

• The current threats may be obvious , but it

is essential to consider potential future
threats.
• Competition – current competition and
future competition
• Most CI aimed at direct competitors
• Indirect competition – fight for the same
category of customer’s expenditure
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Competitors from Unrelated
Unrelated related fields potential
potential competitors
competitors
indirect

Direct

Unrelated
potential
Unrelated competitors
potential
competitors
 Narrowing the Field AICISM

• Competition can be identified with reference to:

- Size
- Management
- Aggression
- Technology
- Product
- Customer Base
- Geographical proximity
- Success
- Profits
- Profile
- Recruits
 Clues to be picked while scan AICISM

• Management statements that suggest that a diversification into a

new market is being considered either for growth or as a
replacement for poor earnings in current businesses
• The recruitment of new management known to have an interest in
the market
• The development of mew technology that would facilitate entry into
the market
• The establishment of partnerships that suggest a growing interest in
new businesses and a mechanism for making an effective entry
• The purchase of a licence that could be used to enter the business
• Patented product developments
Alternates to collect intelligence AICISM

• Includes analysis of companies that are

being considered or targeted as:
- Acquisition candidates
- Investment prospects
- Joint Venture partners
- Suppliers
- Distributors
- Customers