Maximize your usage of third party sources when researching competitors. Many will speak with you directly although they may be limited by confidentiality agreements. They may only reveal parts of the picture, but it is your job to put the pieces together into an actionable whole anyway.
Many times I’ve amazed clients with information from secondary research. They could have found it themselves, but they did not have the time or methodology to sort and prioritize the vast quantity of data available. Make sure that your organization has a superb secondary research source. Hire or put on contract an expert who can quickly zoom in on important information and make you more efficient.
”John A. Quelch, the Lincoln Filene Professor of Business Administration at
Again, here is Quelch’s list:
1. Research the customer
2. Focus on family values
3. Maintain marketing spending
4. Adjust product portfolios
5. Support distributors
6. Adjust pricing tactics
7. Stress market share
8. Emphasize core values
Adjust product portfolios by discontinuing poor performers, but also scour the marketplace for complementary products or services that can be acquired cheaply. Small firms may not have access to funding during today’s tight credit market and need to sell part of their product line or sell the business itself. Larger firms may be pruning their product portfolio as well and your lemonade business might leverage their lemons better than they can.
You—along with rivals—are reviewing your distributors and salespeople for effectiveness and dropping your weakest ones. But some of your competitors’ salespeople could be worth hiring and their distributors could be interested in offering another line of products during slowdowns.
This is also the time to recruit the best finance managers from peers. Why? Because controlling costs is key during times when buyers seek lower prices. You need to truly understand your cost structure to determine which products are truly profitable and which are really lost causes. Good finance managers can not only control costs, but also help analyze the most cost effective approach to spending. Ask them to assist you in figuring out your competitors’ cost structures to determine their likely reaction to your price moves and if they employ any best practices that you can adopt.
Plus a strong finance executive can manage the home front while the CEO visits customers, both your own and your rivals. The visits will help keep your customers from being stolen by competitors while initiating or deepening relationships with those who buy from others.
Many organizations prosper during recessions. Make sure that yours is one of them.
For more of Quelch’s observations on marketing, visit his blog at http://discussionleader.hbsp.com/quelch/.
Don’t get paranoid, but competitive intelligence and corporate espionage can be everywhere and your organization should take certain steps to avoid the loss of intellectual property and other confidential material.
Expert Harry Markopolos, aided by suggestions from the attendees at this week’s Boston Chapter SCIP meeting, recommended a number of actions to keep information secure:
Internationally, the
These are just a few of the issues mentioned Wednesday evening. Don’t get paranoid; just be very careful. Once IP is lost, it is gone whether or not the thieves can be found and prosecuted.
Human beings prefer to live in groups. For thousands of years survival of an individual depended on the ability of his or her tribe to feed itself and defend itself against rival tribes.
Groups of people have the same instincts when threatened. Witness Microsoft’s offer to Yahoo, precipitated by Google’s increased domination of the search advertising market. With jet fuel prices soaring higher than the airplanes themselves, even the larger airlines are merging or forming alliances to cut costs in an effort to survive.
The dominant firm in any industry will run afoul of anti-trust rules if it tried to merge, even in today’s more flexible stances in Washington DC. But how much effort should the dominant entity expend to monitor and anticipate mergers and alliances among smaller, possibly struggling competitors?
Not much actually. Struggling competitors who align out of weakness usually see minimal benefits from the merger. And they focus internally on combining the operations instead of maintaining their diligence on competitors.
Compaq Computer Corporation bought Digital Equipment Corporation largely to obtain its services capabilities. Subsequently, Hewlett-Packard (HP) acquired Compaq to bulk up its PC business and to add to its services operations.
What happened? HP just inked an agreement to purchase EDS to increase its ability to compete against IBM for services opportunities. IBM has been doing extremely well. While the fit between the two appears good from a business viewpoint, the cultures of the two organizations are very different and will take a great deal of careful integration to create benefits from the combination.
So you work at the dominant organization in your industry, keep monitoring your merging competitors, but basically just keep doing what you’re doing right in the first place.
SCIP Boston Chapter Meeting
Counter CI & Counter Corporate Espionage (CE): Know the Difference!
May 21, 2008
This presentation will review the Economic Espionage Act of 1996 comparing and contrasting espionage which is criminal with competitive intelligence which is legal. It will also review steps that you, the information professional, can take to safeguard your company against other organization’s CI or CE efforts. Are employees putting your company at risk every time they travel overseas with laptop computers? Preparing your executives for “flying the unfriendly skies,” ensuring your hotel room doesn’t become your competitor’s best source of information and other commonsense tips for today’s CI professional will be just some of the topics discussed.
Harry Markopolos, CFA, is a corporate whistleblower specialist engaged in identifying companies engaged in contract or tax fraud against the US Government under two bounty programs - the Federal False Claims Act and IRS Whistleblower Program. He specializes in safeguarding whistleblowers’ identities, preparing case evidence, fraud investigation, building damages models, and working with legal teams to file cases under seal (in secret).
Mr. Markopolos graduated with his B.A. in Business from Loyola College of Maryland, earned his M.S. in Finance from Boston College, and is a Chartered Financial Analyst. He also graduated from the Army Command & General Staff College.
Prior to starting his own company, he served as Chief Investment Officer for a $9.5 billion equity derivatives asset management firm in Boston.
Registration will be available on www.scip.org after SCIP08
For More Information, Contact:
Boston SCIP Chapter Chair Parmelee Eastman 781/416-3686, peastman@eastsightconsulting.com
SCIP Staff Contact: Dionedra Dorsey, SCIP Chapter Coordinator, ddorsey@scip.org
While the vast majority of CI primary research is completed successfully via phone in the US, at times, an in-person interview or a site visit is worth the extra time and money. During an assignment years ago, the in-person interviews with our client’s customers and with purchasers of a very aggressive competitor’s offerings revealed that our client’s buyers averaged about ten years older than the purchasers of the rival’s products. With this insight, our client altered its advertising and sales messages to appeal to younger purchasers.
Miller Brewing Company and Anheuser-Busch have long fought tenaciously over the US beer market, employing a wide variety of tactics. In 2006, Miller came up with a new idea: the firm hired a beer reporter named James Arndorfer to focus on Brew Blog, www.brewblog.com, to cover news in the beer industry, according to the Wall Street Journal front page article, “For All You Do, Bud, This Blog Is About You,” April 24, 2008.
While officially the site covers all beer competitors, Mr. Arndorfer tracks every detail he can find about chief rival Anheuser-Busch, blandly telling the WSJ, “They’re the industry leader. And they’ve been making a lot of news.”
The WSJ reported that, “In March, Mr. Arndorfer was rummaging through an online database when he noticed that Anheuser had received government approval for a Budweiser American Ale label. Breaking the news about the offering [in March 2008], he evoked recent Anheuser ads that disparaged ale-style craft beers.”
“Trade publications and Anheuser’s hometown paper quickly chased the scoop.”
The blog allows Miller to control the spin on news about its rivals while usually, but not always, reporting positively on Mr. Arndorfer’s employer Miller to maintain creditability.
“’They are trying to aggressively go around the gatekeepers’ in newsrooms and the trade press, says Stephen Quigley, an associate professor of public relations at Boston University. ‘It’s something you couldn’t do five years ago,’ before the proliferations of blogs.”
Some companies have been using competitive information in their publicity for years--I’ve done the research for many of these campaigns—but more should be since the practice allows firms to:
• Position its products and/or services more favorably against those of rivals
• Be more specific in claims for its products against those of rivals
• Plants seeds of FUD (fear, uncertainty, doubt) about competitors
So go have a Miller beer with co-workers and brainstorm about how your organization can more effectively leverage competitive intelligence in communications campaigns.
According to best selling author and consultant Kevin J. Clancy, Ph.D, 84% of marketing programs disappoint the creators and that the Marketing Science Institute found that advertising had to be doubled to increase revenue by 1%. Dr. Clancy spoke to the annual joint meeting of Boston chapters of SCIP and the Association of Strategic Planning on March 26, 2008.
Why are marketing returns so low? “Decision making based on intuition—a habit that dies hard.” Also, “using competitors to guide decisions.” While these two reasons may appear to be contradictory, they both result from poor use of information.
Since intuition is by my definition the unconscious processing of information, the user does not understand the value or the limits of intuition. If intuition is based on extensive experience in the field, it could very likely to result in a good decision, but intuition results from the comments made by one customer the previous week, it can lead in the wrong direction.
All businesses should use competitive information in their decision-making, but they need to do it in the context of their own strategy and the strategies employed by rivals. A firm should not copy the competitor’s marketing program without understanding how it supports, or conversely does not support, the rival’s strategy, and how it would correspond with your employer’s strategy.
Dr. Clancy ended his presentation by reminding us to be more clear headed and analytical about marketing. Then a marketing campaign can increase sales 20% or more and truly be transformational for the company—and its competitors.
For more information on Dr. Clancy, please contact Copernicus Marketing (www.copernicusmarketing.com).
Are your competitors forming alliances to address new markets or compensate for weaknesses? Partnerships are perceived to be a quick way to expand or address problems without the time and funds needed to build it internally. But most alliances quietly disappear as the issues involved in working together outweigh the benefits. Monitor competitive alliances carefully to ascertain their continued activities and real value to participants.
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