Knowledge Is Power

Pre-Announce Your Rival’s Products?—I’ll Drink to That

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.

The Society of Competitive Intelligence Professionals

Since I just received my renewal notice for my membership in SCIP (Society of Competitive Professionals), it is time to mention the benefits of the organization. SCIP fosters networking, CI knowledge development (through the CI Foundation) and dissemination through the CI Magazine and SCIP online, professional skill development, and standards via ethics statements.

An annual membership costs $295 ($25 for students), which includes discounts on local meetings and the annual conference as well as publications, but you do not have to be a member to attend. Go to www.scip.org to find your nearest chapter and send Dionedra Dorsey an email requesting meeting notices. She can be reached at ddorsey@scip.org.

The scip web site also has some information on competitive intelligence which may be useful.

Enjoy!

Do Supply Chain Improvements Only Benefit For-Profits Firms?

No, according to Charles Agins, Montefiore Medical Center VP of finance and executive project director who oversees business information systems (“Reining In Health Care Costs Through Stricter Supply Management,” Marianne Kolbasuk McGee InformationWeek 9/30/07):

‘"If health care wants to tackle its problems, you've got to take on systems drastically," in terms of squeezing out costs in the purchasing of supplies ranging from drugs to sutures, to even the soda that's sold in cafeteria vending machines, said Charles Agins.’

The two (soon to be three) hospital chain implemented SAP to track purchases and save $72 million in the previous ten years through trading off longer contracts for lower prices with vendors and reducing shrinkage (employee theft). “A big chunk of the savings has come through fierce contract negotiations with vendors of everything from copy machines to pharmaceuticals to staff cell phones, resulting in much longer term contracts at discounted prices, as well as improved services.” Shrinkage dropped dramatically as employees knew that all requisitions and deliveries of supplies and equipment were recorded by the SAP system.

But the benefits did not accrue just to the financial health of the hospital. “Orders that in the past took 24 to 37 days to process, now happen overnight.”

Many manufacturing firms have found that improving their supply chains for inventory yielded substantially more in savings than rationalizing items bought for internal use. The Montefiore experience suggests that the improving the MRO (maintenance, operations, repair) supply chain could provide competitive benefits to both non-profit and for-profit organizations.

Offshoring Off the Drawing Board for One Startup

“Wages in India have risen to the point that offshoring development operations no longer makes sense for one high-tech company” according to a May 29, 2007 article by Carmen Nobel in Infoworld “Wage Inflation Sinks Offshoring to One Startup.”

“Indian software development shops have been the workhorse for countless high-tech firms and U.S. enterprises for more than a decade. But steady demand for development talent is erasing some of the cost advantages that offshore development outfits have enjoyed, according to a report by Gartner. In fact, the wage rates for Indian software engineers will reach between 40 to 50 percent of Silicon Valley wages by 2008 with the gap continuing to narrow after that.”

“Wage increases for Indian engineers averaged 15 percent from 2005 to 2006, compared with a 3 percent average increase for U.S. engineers, according to a recent Gartner report.” With additional communications and coordination costs from managing groups so far away in addition to the higher wages in India, the country is not as cost-competitive as previously. US companies are looking at offshoring to China, Vietnam, Russia, and other Eastern European countries, or returning the work to the US.

Are your competitors offshoring? If so, how it is affecting their cost structure and their effectiveness? If they are being pressured to offshore by funders, it may not be positive for them.

Lou Gerstner "Get New Top Management"

Lou Gerstner said “Get new top management” when I asked him how should CI professionals work to gain visibility of unsupportive top management at the May 14 Harvard Business School Association of Boston program, “An Informal Conversation with Lou Gerstner.” He shook his head in disbelief and added that “At the end of the day, nothing matters but customers and competitors.” Too many companies who were very successful for many years stop focusing on the external and start focusing on the internal. They lost their way and floundered.

He quoted Intel founder Andy Grove, “Only the paranoid survive.” He advised “Every day, every day, start with an externally-driven agenda for your company.”

When he started at IBM, he knew nothing about the company and the industry. He asked for the customer satisfaction data. “They love us” said the customer sat team. Why he wondered, IBM’s market share had dropped in half and the company was losing billions of dollars.

He wondered for a couple of months and then asked to see the customer sat data again. “Oh, we’ve got new data. They love us even more!” How was the data developed he queried. “We ask the salespeople which customers to survey and send the survey to them. Many customers do not like to fill out too many surveys so the best salespeople fill them out for their customers.”

Out went the customer sat team and the process. When he left IBM, the company was surveying 30,000 customers each quarter blind.

SCIP Boston Chapter Meeting

The Boston chapter of SCIP is kicking off the new season with a presentation by Leonard Fuld on October 3.

New Insights from Leonard Fuld

Competitive intelligence is not about the Internet. It’s about a German refugee turned American GI and interpreter in World War II. . It’s about a goat in the field. It’s about Google’s battle with Microsoft. In order to unlock the value of competitive intelligence and see past competitive smoke screens and disruptions, one must first learn its five realities. Only then will you be able decode its secret language and help your business strategy succeed.

Leonard Fuld, president of Fuld & Company, will share his insights on this secret language based on the findings from his most recent book, The Secret Language of Competitive Intelligence, on Tuesday, October 3 at the Microsoft facility in Waltham, MA. SCIP Boston is privileged to have this experienced and popular speaker kick off our year.

OUR SPEAKER

Leonard Fuld is a pioneer and recognized leading authority in the field of competitive intelligence. Leonard Fuld created many of the intelligence-gathering techniques currently used by corporations around the globe. Mr. Fuld was among the first four people to be named a Fellow of the Society of Competitive Intelligence Professionals (SCIP) and was awarded the Meritorious Award, the highest award offered by SCIP, in 1998.

Fuld & Company (www.fuld.com) is a full-service business intelligence firm, providing research and analysis, strategic consulting, business intelligence process consulting, and training to help clients understand their external competitive environment. With headquarters in Cambridge, MA and offices in London, UK, the company has served over half the Fortune 500 companies as well as corporations around the world.

Mr. Fuld is a widely published author. His most recent book is The Secret Language of Competitive Intelligence (Crown, 2006). For more information on this book, click on http://www.fuld.com/Products/SecretLanguageOfCI.html. His articles have appeared in major business publications including The Harvard Business Review, The Wall Street Journal, CIO Magazine, Chief Executive and many others. He has also been featured on The Today Show, Marketplace, CBS Network Newsbreak, Financial News Network Evening News and ESPN's Nation's Business Today.

GENERAL INFORMATION

The networking session will begin at 6 PM. A light meal and refreshments will be served. Mr. Fuld’s presentation will begin at 6:45 PM. There will be time for individual discussions and more networking after the presentations and the evening will wrap up by 9:00 PM.

Microsoft is hosting this event at its Waltham, MA office at 201 Jones Rd. Parking is available underneath the building or in the parking garage. NOTE: Please enter the building from the back entrance as the front entrance closes at 6 PM. Take the elevator to the sixth floor and turn left to find the session.

DIRECTIONS

From the East or West, take the Mass Pike (I-90) to exit 15 which is I-95/Rt. 128. Go North one exit to Exit 26 (Route 20). Continue below.

From the North or South, take I-95/Rt. 128 to Exit 26 (Route 20). Continue below.

For all attendees, take Exit 26 onto Rt. 20. Follow Route 20 East through first stoplight. Take next left turn on Stow Street (following signs for Route 117). Take left at Main Street (Route 117 West) stoplight, and then take second left onto Jones Road at the blinking yellow light. Waltham Weston Corporate Center is located at the end of Jones Road (201 Jones Road). For more information, visit http://www.microsoft.com/mscorp/info/usaoffices/newengland/waltham.mspx.

REGISTRATION

The fee for SCIP members is $30; non-members fee is $35. Cancellations received after close of business on Friday September 29 will not be refunded. No-shows will be billed. To register, please visit www.scip.org, then click on Event Calendar.

If you attend, please let us know how you heard about the meeting.

Hear About Covert CI Operations at Boston SCIP Meeting June 28,n 2006

Dr. Kevin Desouza will present on Covert Competitive Intelligence Operations: How have breaches and penetrations occurred and what can be done to build more robust security and counter-intelligence programs on Wednesday June 28, 2006.

Covert Competitive Intelligence Operations

Prior to accepting a position in academia, Dr. Desouza was involved in several dozen engagements with private organizations in the area of competitive intelligence. The majority of these assignments tested the viability of the security measures organizations used to detect and counter intelligence operations by their adversaries. To his dismay, he was surprised to see how easy it was to penetrate organizations. Most of the time, these penetrations did not involve the use of sophisticated techniques of information security breaches by sabotaging computer networks or electronic data stores. Instead, most of them involved commonsense and exploitation of human nature.

In this presentation, he will focus on a subset of these cases to highlight the nature of covert competitive intelligence operations, specifically focusing on the operations that involve human penetration of organizations. The issue of electronic (or technical) penetration, such as hacking into corporate information systems or databases, sabotages to corporate websites, etc. will not be covered. He will present actual cases of covert competitive intelligence operations and also methods to use to prevent falling prey to such penetrations.

Dr. Desouza, Our Speaker

Kevin C. Desouza is on the faculty of the Information School at the University of Washington. He is a founding faculty member of the Institute for Innovation Management (I3M) and is an affiliate faculty member of the Center for American Politics and Public Policy, both housed at the University of Washington. His immediate past position was the Director of the Institute for Engaged Business Research, a think-tank of the Engaged Enterprise, a strategy consulting firm with expertise in the areas of knowledge management, crisis management, strategic deployment of information systems, and government and competitive intelligence assignments. He has authored Managing Knowledge with Artificial Intelligence (Quorum Books, 2002), co-authored The Outsourcing Handbook (Kogan Page, 2006), Managing Information in Complex Organizations (M.E. Sharpe, 2005) and Engaged Knowledge Management (Palgrave Macmillan, 2005), and edited New Frontiers of Knowledge Management (Palgrave Macmillan, 2005). His most recent book is currently in press - Agile Information Systems - to be published by Butterworth Heinemann (2006). In addition, he has published over 100 articles in prestigious practitioner and academic journals. His work has also been featured by a number of publications such as the Washington Internet Daily, Computerworld, KM Review, and Human Resource Management International Digest. Dr. Desouza has advised major international corporations and government organizations on strategic management issues ranging from knowledge management, to competitive intelligence, and crisis management. Dr. Desouza is frequently an invited speaker on a number of cutting-edge business and technology topics for national and international, industry and academic audiences. He is a fellow of the Royal Society of Arts and was a speaker at SCIP05. Dr. Dr. Desouza is working on his new book - Securing your Crown Jewels.

General Information

The meeting will begin at 6 PM with a short networking session with a light meal. The presentation will begin at 6:30 PM. We will leave some time for individual discussions and networking after the presentations and wrap up by 8:30 PM.

Microsoft is hosting this event at its Waltham, MA office. SCIP will meet in conference room B at 201 Jones Rd. You can park underneath the building and walk around to the front entrance.

Directions:

From the East or West, take the Mass Pike (I-90) to exit 15 which is I-95/Rt. 128. Go North one exit to Exit 26 (Route 20). Continue below.

From the North or South, take I-95/Rt. 128 to Exit 26 (Route 20). Continue below.

For all attendees, take Exit 26 onto Rt. 20. Follow Route 20 East through first stoplight. Take next left turn on Stow Street (following signs for Route 117). Take left at Main Street (Route 117 West) stoplight, and then take second left onto Jones Road at the blinking yellow light. Waltham Weston Corporate Center is located at the end of Jones Road (201 Jones Road). For more information, visit http://www.microsoft.com/mscorp/info/usaoffices/newengland/waltham.mspx.

A light meal will be served.
The fee for SCIP members is $35 and the charge for non-members is $45. Cancellations received after Monday June 26 will not be refunded. No-shows will be billed. To register, please visit www.scip.org, then click on:
1. Education & events
2. Chapter events or Event calendar
3. June 28, 2006
4. Boston Meeting

Find a USB Data Drive in Your Parking Lot?

Beware of the modern day equivalent of the Trojan horse. It could have been placed there to trap you by a hacker or a security firm testing your employer’s security measures. That’s what Secure Network Technologies, Inc. did for a client when word got around the client’s employees that the firm’s security would be tested. See “Social Engineering, the USB Way,” Steve Stasiukronis, June 7, 2006, www.darkreading.com.

The security consultant wrote a “Trojan program that, when run, would collect passwords, logins and machine-specific information from the user’s computer, and then email the findings back to us.” This stealth program was imprinted on the drives prior to scattering them in the parking lot.

“After about three days, we figured we had collected enough data. When I started to review our findings, I was amazed at the results. Of the 20 USB drives we planted, 15 were found by employees, and all had been plugged into company computers. The data we obtained helped us to compromise additional systems, and the best part of the whole scheme was its convenience. We never broke a sweat. Everything that needed to happen did, and in a way it was completely transparent to the users, the network, and credit union management.”

Didn’t your mother tell not to connect unknown equipment on to your computer? Oops, it was your mother who told you not to talk to strangers, (which is actually another technique used by this security firm—chatting up employees.) Your IT department told not to connect unknown equipment to your computer. Now you know why. So beware of any computer equipment you find. Your boss could be checking on you or even worse, a hacker or an unethical competitor could be trying to break into your computer system.

Concerned about these issues? Come to the Boston SCIP Chapter meeting on June 28, 2006 which features Dr. Kevin Desouza speaking on Covert Competitive Intelligence Operations, specifically focusing on the operations that involve human penetration of organizations. Register via www.scip.org/education&events/eventcalendar/June 28 Boston Meeting.

Wal-Mart Avoids Impacting Competitors’ Supplies

Benevolent Wal-Mart? Not according to an article, “Wal-Mart goes organic,” released by the Associated Press on March 26, 2006. Part of Wal-Mart’s strategy to go upscale is to offer organic food; including fish raised or caught using sustainable methods as defined by the Marine Sustainability Council (MSC).

“Sustainability experts say what makes this program interesting is that Wal-Mart will work with its suppliers to get more fisheries around the globe certified by MSC, instead of just buying up the existing stock of certified fish.

“Wal-Mart says this means there will be more sustainable fish that will also be available to Wal-Mart's competitors, such as Whole Foods Market, which already sells about 18 MSC certified items, according to the MSC Web site. Wal-Mart plans to offer between 200 and 250 items.”

Is this just good PR from a criticized industry leader? No, but the company can’t pass up the opportunity of maximizing the PR value of the announcement. Wal-Mart is too large to simply buy up existing supplies. That would drive the price sky-high, leaving Wal-Mart unable to offer the items at a low enough price for its customers.

For Wal-Mart’s competitors, this fits the traditional Wal-Mart behavior pattern.

“The way Wal-Mart hatched the fish plan is typical of how it operates.

“Peter Redmond, vice president and divisional merchandise manager in charge of deli and seafood, said he conceived the idea after meeting MSC board chairman Will Martin last fall. Wal-Mart and MSC worked out details and then Wal-Mart called in its 25 to 30 fish wholesalers in January to tell them it was switching to MSC certified seafood.

“Wal-Mart developed a plan to work with its suppliers to encourage fisheries to adopt MSC practices. The plan includes barring its suppliers from switching fisheries in the first year to 18 months, giving the suppliers more reason to promote the changes.

"We don't want to walk away from a fishery just because it is in fairly poor shape or poor shape," Redmond said. "We want to try and recover that (non-certified) fishery to where it becomes a sustainable fishery. Our point being that if we just go for sustainable fisheries, it won't be enough at the end of the day unless we recover a lot of these that are in trouble now," he added.”

Should Whole Foods be concerned about Wal-Mart’s entry into organic foods? Yes, but other grocery chains already stock organic food. Wal-Mart’s entry into a new market can expand the total market through consumer education and increased advertising, but many Whole Foods customers have known about the organic movement for years and may not want to shop at Wal-Mart anyway. Whole Foods may actually benefit because Wal-Mart’s work with suppliers may lower the prices for all buyers of MSC fish. But will my local Whole Foods market lower its selling prices for MSC fish? I wouldn’t bet my wallet on it.

SCIP Boston Meeting Features Disruptive Technology

The SCIP Boston chapter is very fortunate to have Arik Johnson, founder and CEO of leading CI firm Aurora WDC, and Alex Graham, Director of SCIP for a meeting on Thursday January 26, 2006 beginning at 6 PM. Arik will present a primer on Disruptive Innovation Theory and the relationship between this revolutionary approach to understanding competing technologies, anticipate industry changes and predict the outcomes of competitive product battles in advance. First written about by Clayton Christensen of Harvard in his ground breaking 1997 book, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, disruptive technologies are new technologies adopted by entrepreneurial firms which gain acceptance in the marketplace while established industry participants ignore the products/services as niche, unprofitable, or unneeded. These large companies, which are well managed by traditional standards, are too focused on the needs of current customers to notice the growth of disruptive technologies until they have gained traction. For more information on this meeting, please visit www.scip.org.