Competitive Intelligence Group
Thursday, September 14th, 2006Where should a CI group be located within an organization?
It all depends on the size of the company. In a large company, a CI group should exist within every strategic business unit (SBU). Keep in mind that the main goal of a CI group is to gather information from internal and external sources, and produce an executive summary to decision makers on the near- and long-term developments within their particular industry. (This would include possible marketing moves by competitors, the development of new products, impact from legislation, new hiring by competitors, technologies from unrelated industries that could make significant advances to your particular industry.) The CI group should have more knowledge about the company’s industry than any other employee or department. Accordingly, the CI group should reside wherever key decision-makers exist within a company, whether it be the CEO or the manager of a business unit.
From what I have heard about CI, it is mostly to get pricing information or getting an estimate on the sales force of specific competitors by eliciting information from sources. What other techniques are used by CI?
The key to success for CI is analysis, bringing together a gamut of information from disparate sources and turning it a concise report for management. For example, a CI analyst may contribute by looking into the history or background of the CEO of a competitive company. He may find that the CEO in question, while working for a company in a different industry, pursued an aggressive policy of buying out smaller competitors, and this led to his company gaining significant market share and profits. It is quite possible that, because it led to success in the past, the CEO may pursue the same policy with the new company, even the circumstances are different and the policy may actually lead to disaster in the new industry. Another CI analyst may provide an analysis of a competitor’s financial statements and find that a competitor has an unusually high amount of cash: this may mean that the competitor may be preparing a major buying spree. Finally, demographic analyses may reveal that a certain group within society may soon have a significant impact on the economy: the company who is able to answer their needs the quickest would reap significant benefits in revenues and profits. To conclude, CI is flexible enough to permit the investigation of different sources of information for the benefit of its users.
What is strategic CI? Please provide an example.
Strategic CI looks at the raison d’être of a company and can be used to develop a company’s long-term strategy. For example, a company may be selling RRSPs. Strategic CI may be used to answer questions like, “Why do people buy RRSPs?” The answer may be that they want to have enough money to have a good quality of life in retirement. What does quality of life look like? Is it a resort? Is it group activities? Is it a special community exclusive to retirees? Are their many potential retirees who have this vision of retirement? If the potential for success is deemed high, the company may develop from being a mere seller of RRSPs to a provider of high-quality retirement communities.