Archive for February, 2009

Examples of How Competitive Intelligence Can Be Used

Tuesday, February 10th, 2009



In a world of increasing globalization, it is imperative to develop and maintain a network of international sources of information, providing information not only on competitors based in foreign countries but also on unexpected competitors and changes in the market that could potentially blindside your company.

 

Among the potential challenges faced by global companies are: mergers and acquisitions, changes in competitor strategies via changes in CEOs, and strategic partnerships

 

Competitor Re-invigorated by New Investor

The CEO of one company heard from his peers that a European-based competitor had just been sold and there were rumours that the competitor was developing a new marketing strategy to increase market share. Based on interviews with the client’s European personnel (sales, account managers, customer service, human resources and c-level executives), Industry experts, and foreign-language news reports we were able to ascertain that a British merchant bank had bought controlling stock in the competitor. In fact, this merchant bank had gone on a buying spree throughout Europe, buying companies in a wide range of industries. In all of these cases, the purchased companies invested in the hiring of an inordinate number of sales reps coupled with sharp cuts in the sales price of products, as part of a strategy of undercutting the competition to increase market share. This would increase the stock value of the companies, whereupon the merchant bank sold its shares at a profit.

 

There was sufficient evidence that the client’s competitor was going to through the same process. As a result, our client was able to take effective counter-measures to blunt and then defeat the competitor’s tactic of low pricing, thereby defending its market share and enhancing its standing in the market place.

 

Conclusion

Developing a network of internal sources of information is essential for any CI Manager in that it provides an easily-accessed source of vital competitive information. Like any good CI Manager, it is also important to be able to access other sources of information to corroborate and enhance information already at hand. Such sources can provide the checks and balances to eliminate any agenda that your usual sources may have, but can also provide greater context on the competitive environment.

 

Next month we’ll look at how CI can be used when dealing with mergers and acquisitions and conducting due diligence on potential strategic partners.

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Examples on the Use of Competitive Intelligence

Tuesday, February 10th, 2009



With a period of economic correction upon us, the use Competitive Intelligence is now more vital than ever in helping companies to prepare for changes in their industries, to be proactive instead of reactive, to and exploit opportunities before their competitors, and to put themselves in a position of strength in time for an economic upturn.

 

Mergers and Acquisitions

A financial services provider was concerned that two of three competitors were likely to merge. It was imperative that they know ahead of time which two were going to merge so that strategies could be put in place to counter the new threat. The CI manger spoke to a number of senior executives along with frontline personnel, to find out about the competitors’ customer base, growth trends, business styles and even the personalities of the senior executives.

 

The CI manager was able to determine that the two competitors whose CEO had the most in common (club memberships, interests, educational and career backgrounds) were the ones most likely to join. From there the CI manager provided recommendations to counter the imminent threat before the actual merger took place.

 

Strategic Partnerships

A global telecommunications company was seeking information on a US-based company perceived as a potential strategic partner. There were concerns among key decision-makers, however, that the company in question was not financially sound. Interviews with the company’s Sales, Legal, Finance and Customer Service as well as clients and industry experts indicated that this company was actually in worse trouble than first believed, because its technology had failed to meet expectations, resulting in a substantial number of dissatisfied clients and shareholders. As a result, the global telecommunications company decided not to go ahead with the partnership, thus saving itself much embarrassment.

 

Conclusion

Competitive Intelligence is essential in strategic decision-making, both in making the right decisions but also in avoiding making bad decisions. And in difficult economic times, the margin of error between success and disaster is a fine one. The networking, data gathering and analysis that are part of Competitive Intelligence are critically important and the use of Competitive Intelligence is often the difference between success, industry-leading companies and the also-rans.

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