A Quick Introduction to Competitive Intelligence

UNL – Universidade Nova de Lisboa
Instituto Superior de Estatística e Gestão de Informação. UNL
ISEGI – Instituto Superior de Estatística e Gestão de Informação
Learning Module Knowledge Management
COMPETITIVE INTELLIGENCE
Lecture 1
Isabel Santos
Mestrado em Estatística e Gestão de Informação e Pós-Graduações
Isabel Santos © 23-11-2010
2010/2011 (1st Term)

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Course Plan
 Competitive Intelligence.
 CI Advantages.
 The Competitive Intelligence
Cycle
 CI: Identifying Intelligence
Needs.
 Key Intelligence Topics
 CI Information Sources.
 Military Strategy /Military
Intelligence & C.Intelligence
 Early Warning Systems
 CI : Overview – Risk, Change
and Uncertainty.
 Introduction to STEEP
Analysis

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Summary: Lecture 1
Contemporary Challenges.
Competitive Intelligence.
 CI Advantages.
The Competitive Intelligence Life Cycle.

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Information: a Strategic Approach
 INFORMATION
- Organizational Strategic Resource (Choo, 1998)
- Manageable as other organizational resources
Strategic Approach for Managing Information
A strategic tool to promote Organizational Survival,
Organizational Competitiveness and Innovation
COMPETITIVE INTELLIGENCE
Isabel Santos ©

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The Changing Face of Markets
PAST TIME:
 Geographically limited Transportation Systems
 Limited Communications Infrastructures.
 Local Markets / Local Customers
 Local Competition
 Limited Information Flow
 Assymetric Information: Customers/Companies
 Organizations define products/services
 Standardized Products/Services
 Mass Production Systems
 Local Available Economic Resources
 Slow Pace of Change
 Risk is more manageable
PRESENT TIME:
 Globally Interconnected Transport Inf.
 Globally Interconnected Communications
 Global Markets/Global Customers
 ‘GloCal’ Competition
 Global Information and Resources Flow
 Empowered Customers: More Informed
 Customers define products/services
 Mass Customization of Products/Services
 Alternative Production Systems
 Consumer Personalization
 Faster/Dramatic Change
 Risks are interconnected
Isabel Santos ©

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Contemporary Challenges
 In Contemporary times, Organizations and Industries
are open systems all embedded in a wider
macroenviroment which encompasses a broad set of
forces/trends emanating or operating from outside
organizations.
 These forces/trends affect organizational perfomances
and represent some of the most critical ‘Contemporary
Challenges’ that organizations came across…
Isabel Santos ©

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Some Contemporary Challenges
 Globalization
 Hipercompetition
 Technology Disruption
 Progressive Resources Scarcity
 Consumer Personalization
 Product Life Cycle Reduction
 Production Life Cycle Reduction
 Open Innovation SISTEMATIC
RISK AND
CHANGE
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So the Key Questions….
How can organizations manage these critical forces
in order to survive in this demanding competitive
macroenviroment?
How can organizations take advantage of this
competitive environment in terms of their emerging
threats and opportunities?
Can organizations manage in some way the growing
pace of Change and Risk derived from it?
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There is a way…
 Managing Information strategically may be a critical way to
help organizations to cope with this contemporary
challenges.
 Competitive Intelligence is a Strategic Information
Management Process that can be used as strategic tool to
promote:
- Organizational Survival
- Organizational Competitiveness
- Innovation.
Isabel Santos ©

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Introducing Competitive Intelligence
(a definition)
“…“...the process of ethically and systematically
collecting, analyzing, and disseminating accurate,
relevant, specific, timely, foresighted and actionable
intelligence regarding the implications of the
organizational environment, competitors, and the
organization itself” (Miller,2000)
Isabel Santos ©

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Introducing Competitive Intelligence
 Intelligence definitions:
“ (...) a collection of information pieces which have been filtered, distilled
and analyzed; it has been turned into something that can be acted
upon” (Miller, 2000)
“ (…) refers to information that has been analysed (taking into account
the commercial situation of a company) and then used to the tactical
or strategic advantage of that company” (Gilad, 2003)
“ (…) intelligence is a methodical assessment of future events” (ibidem)
Isabel Santos ©

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CI Advantages
Competitive Intelligence allows organizations to:
 Target Market Threats and Opportunities
 Monitorize Competitor Ofensive and Defensive Moves
 Identify potential Partnerships and Stakeholders
 Identify Emerging Commercial Technologies and Scientific Knowledge
 Identify Emerging Products and Services
 Prepare/Support Strategic Management Planning
 Develop Foresight Vision
 Foster Innovation
 Improve Risk Management
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Organizations and Competitive Intelligence
 All sort of organizations can/must implement a Competitive
Intelligence function or develop Competitive Intelligence
capabilities.
What do you mean by
“all sort” of organizations?
 Profit and non profit, big companies, small or medium size
enterprises, across all industries in all countries.
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Theoretical/Pratical Foundations
1. Management Strategy
2. Military Strategy
3. Knowledge and The Information Society
4. Other: Intelligence Agencies
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 Strategy embraces the relationship between the organization and its
environment ….
 STRATEGY operative definitions:
- “ The determination of the basic long term goals and objectives of
an enterprise, and the adoption of courses of action and the
allocation of resources necessary for carrying out these goals”
(Chandler,1962)
- Strategy is “about the purposes, directions, choices, changes,
governance, organization and performance of organizations in their
industry, market and social, economic, political contexts”. (Pettigrew
et all, 2002)
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1. Management Strategy
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Management Strategy
INTERNAL VIEW EXTERNAL VIEW
Competitors
Suppliers
Distribuition
Industry
Customers
Stackolders
Economy
Technology
Society
Ecology
Culture
Politics
Mision and Vision
Strategic Goals
Culture / Values
Competences
Capabilities
Infrastructures
Processes
Resources
People
Organization
Strenghts
Weakness
Threats
Opportunities
(Based on Freire 2001 and Fleisher & Bensoussan, 2003)
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Management Strategy and Information
 In his book “Competitive Stratregy:Techniques for Analyzing
Industries and Competitors”(1980), Michael Porter underlines the
critical importance of strategic information management to
support/develop Strategy.
 He was the first author to advocate a “Competitor Intelligence
System” as an important tool to “forecasting future industry
conditions”, to support strategy formulation and the top management
decision making processes.
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2. Military Strategy
 Market as a Battle Field
 Competition as Warfare
 Information as a strategic resource in Warfare
“If you know the enemy and know yourself,
you need not fear the result of a hundred battles.
If you know yourself but not the enemy,
for every victory gained you will also suffer a defeat.
If you know neither the enemy nor
yourself, you will succumb in every battle”
Sun Tzu. “The Art of War”
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3. Knowledge and The Information Society
A few decades ago some key authors foresaw the emergence of
information and knowledge as the critical assets for economic and
social development.
 “Knowledge has become the basic economic resource” (Peter Drucker, 1976).
 “Society is evolving towards a new age, where information will be the most basic
resource in the economic developement” (Alvin Toffler, 1980)
 “In the new, informational mode of development the source of productivity lies in the
technology of knowledge generation, information processing and symbol
communication. (…) ..what is specific to the informational mode of development is
the action of knowledge upon knowledge itself as the main source of productivity”
(Manuel Castells, 1996).”
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Knowledge Management
 Information as the basis of knowledge.
 Information and knowledge as sources of competitiveness
and drivers for innovation.
 “When markets shift, technologies proliferate, competitors multiply, and
products become obsolete almost over night, successful companies are those
that consistently create new knowledge, disseminate it widely throughout the
organization, and quickly embody it in new technologies and products. These
activities define the ‘Knowledge creating’ company, whose sole business is
continuous innovation” (Nonaka, 1991)
Isabel Santos ©

Collecting Information
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4. Intelligence Agencies
 Competitive Intelligence adopted the ’Intelligence Cycle’ model
used by intelligence and security agencies (CIA, others) as the
basic model for managing information strategically.
Information Processing
& Storage
Dissemination
Analysis
The Intelligence Cycle
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Planning & Direction

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The Competitive Intelligence Life Cycle
1 - Identifying Intelligence Needs
2 - Mapping Information Sources;
3 - Analysis
4 - Dissemination
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The Competitive Intelligence Life Cycle.
The 4 Basic Steps: An Overview
1 - Identifying Intelligence Needs
2 - Mapping Information Sources;
3 - Analysis
4 - Dissemination
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Superio de Estatística e Gestão Instituto Superior de Estatística e Gestão d dee InInfoformrmaaççããoo.. UNL
1 – Identifying Intelligence Needs
Organizations have different intelligence needs,
depending on its strategic goals and the industries
they belong to.
 Intelligence Needs Identification within the CI
framework, allows organizations to focus on the flow
of information that is really critical to build up and
support its middle and long term business
strategies.
Isabel Santos ©

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Identifying Information Needs
Different Intelligence Needs….
 Software Development Company
Beverage and Drinks Company
Footwear Industry
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2 – Mapping Sources and Collecting Information
Once organizational Intelligence Needs are
identified (Step 1), Competitive Intelligence
researchers need to map what type of information
sources can provide the information above (Step 2).
 Step 2 also comprises tapping information from the
target sources and organize it in order to make it
available for the 3rd step in the CI Life Cycle:
Analysis
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Mapping Sources
Types of Information Sources
 Secundary Sources
- Mass Media
- Web Sources
- Monographies
- Reports
- Recorded Images and Sounds
- Data Bases on/ off line
- Patents
- Published Documents
- Internal Sources Docs.
- Other
 Primary Sources
- Customers
- Competitors
- Suppliers
- Experts
- Consultants
- Co-Workers
- Journalists
- Other Human Sources
- Observation
Isabel Santos ©

3 – Analysis
 “To-be truly value-adding, CI analysis must go beyond
informing knowledge wich, in Taylor’s (1986) value-added
spectrum means validating, synthesizing, comparing,
evaluating, separating, and interpreting data as a means of
providing productive knowledge. This is a judgmental
process in which the task is to present option, advantages,
disadvantages or implications for decisions making and
action”
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( Bergeron e Hiller, 2002)
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So Analysis…
Analysis
 … Is the process that enables ‘intelligence’ production.
 … Comprises the synthetisation, comparison, evaluation,
separation, and interpretation of data and information
trough the application of strategic analysis techniques.
 The result of Analysis is ‘intelligence’
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CI Analysis Techniques: Examples
 Profiles
 Shadowing
 SWOT Analysis
 STEEP Analysis
 Five Industry Forces
 War Games
 Strategic Group Analysis
 Discourse Analysis
 Benchmarking
 Scenario Planning
 Stakeholder Analysis
 Value Chain Analysis
 BCG Matrix
 Blindspot Analysis
 Core Competences
 ABC Analysis
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Analysis
 Questions to answer before Analysis starts:
- Which Analysis Techniques one masters?
- How are they interrelated?
- What scope of competitive enviroment is one going to take
into account?
- What constraints does one have to take in consideration in
terms of resources to perform Analysis (time, financial,
human resources, etc)
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4 – Dissemination
 Dissemination (or Communication) is the process of
informing CI customers (Middle and Top Managers) about
‘intelligence’ findings, so they can based their strategic
decisions upon.
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Dissemination
 CI Researchers must adjust the Dissemination procedure
to the specific manager’s caractheristics and needs.
 This means adjusting the communication medium and the
format content in a way that decision makers can really
absorb and understand ‘intelligence’ findings and effectively
decide and take action upon them.
 For example: intelligence findings can be comunicated
trough a brief writtten report, an oral presentation, by email,
etc, etc,…
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References
 Castells, Manuel. (1996) “The Rise of the Network Society” in “The Information Age:
Economy, Society and Culture.Vol.1. Blackwell Publishers. ISBN 1-55786-617-1.
 Choo, Chun Wei.(1998) “Information Management for the Intelligent Organization.
The Art of Scanning the Environment”. Ed. American Society for Information
Management. 2nd Ed. ISBN:1-57387-057-9
 Miller, Jerry P. (Ed) and The BI Braintrust (2000). Millennium Intelligence:
Understanding and Conducting Competitive Intelligence in the Digital Age.
CyberAge Books. ISBN-13: 978-0910965286
 Porter, Michael E. “ Competitive Strategy. Techniques for Analyzing Industries and
Competitors”. Free Press, New York, 1980. ISBN:0-7432-6088-0.
 Sun Tzu. “The Art of War”. E-Book available at:
http://www.artofwarsuntzu.com/Art%20of%20War%20PDF.pdf
 Chesbrough, Henry W. (2003) “The Era of Open Innovation.” Sloan Management
Review, 44, 3 (Spring): 35-41.
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INCERTEZA E Scenários
 Jolly. V. commercializing new technologies – getting from mind to market.
 Lawson B. how designers think – The design Process desmistified. 1997
(Lawson Model)
 Forrester JW. Mistslon.mit edu
 Dixon P. Meeting The Future Halfway. Center for management
development.
 Manzini E. 2003
 Manzini E , Jegou, F “Sustainable Everyday – Scenarios..
 Whoudhuysen J. About Trends 2005
Activity-centered Design / Human centered design

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Alvim Toffler: The Third Wave
 In the book Toffler describes three types of societies, based on the concept of 'waves' - each wave
pushes the older societies and cultures aside.
 The First Wave is the settled agricultural society which prevailed in much of the world after the Neolithic
Revolution, which replaced hunter-gatherer cultures.
 The Second Wave is Industrial Age society. The Second Wave began in Western Europe with the
Industrial Revolution, and subsequently spread across the world. Key aspects of Second Wave society
are the nuclear family, a factory-type education system and the corporation. Toffler writes:
The Second Wave Society is industrial and based on mass production, mass distribution, mass consumption,
mass education, mass media, , , and weapons of mass destruction. You combine those things with
standardization, centralization, concentration, and synchronization, and you wind up with a style of
organization we call bureaucracy.“
The Third Wave is the post-industrial society. Toffler says that since the late 1950s most countries have been
transitioning from a Second Wave society into a Third Wave society. He coined many words to describe
it and mentions names invented by others, such as the Information Age.

A Quick Introduction to Competitive Intelligence

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