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Competitive Intelligence. It’s role within the strategic decision making process.

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Competitive Intelligence. It’s role within the strategic decision

making process.

Every corporation, every company has competition.The moment you begin to believe that you do not have competition is the exact moment you become vulnerable to your competition.Once you know who your competitors are and what they do, you need to carefully identify and document who they are. This is called creating a competitive advantage.A competitive advantage is created through differentiation and differentiation is created through branding and imaging.

The above sourced from various publications and articles on CI

Introduction

Competitive intelligence plays a vital role in decision making at the corporate level across the globe. Competitive intelligence can be the driver for increased competitiveness, more effective management and measurable business financial benefits.Competitor evaluation not only gives you more insight into the strategies and goals of your competition, it also provides a bird’s-eye view of the trends and future of the industry in which your company operates.

The rise of Competitive Intelligence

• 82% of companies with annual revenues over $10 billion practice Competitive Intelligence (2011)

• 90% of Fortune 500 Companies practice Competitive Intelligence (2011)

• Daniel Vasella, Novartis CEO stated that Competitive Intelligence was a critical component of his thinking process (2007)

• In the 1980s Bob Galvin, former Motorola CEO began a Competitive Intelligence program modelled by companies around the world

The above sourced from various publications and articles on CI

The rise of Competitive Intelligence

The 2002 survey, part of PWC Barometer Surveys, interviewed CEOs of 405 companies that had been identified as fast-growth companies. Companies ranged in size from US$5 million to US$100 million in sales. The survey showed that companies placing a high value on competitor information grew at a 20% faster rate than the other companies in the survey. However this was not the only measure examined. These companies also tended to increase margins to a greater extent, took on more new employees and had the finances to make more new investments including new product development and technology enhancements.

The rise of Competitive Intelligence

A 1995 study showed that companies employing competitive intelligence massively outperform those companies with no or minimal competitive intelligence activities. This study looked at average sales, market share and profitability and showed that for the three measures, companies employing competitive intelligence outperformed rivals without a competitive intelligence department many times for most industries.("A Look at the Link between Competitive Intelligence and Performance," by James J. Cappel and Jeffrey P. Boone, in Competitive Intelligence Review, vol. 6, no. 2, Summer 1995)

The value of Competitive Intelligence

I am a firm believer that competitive intelligence has helped us make more good decisions at the NutraSweet Company, and few bad ones. I can even put a price on it. Competitive intelligence is worth up to $50 million per year to our company. That is a combination of revenues gained and revenues “not lost” to competitive activity. I believe in competitive intelligence, our senior managers believe in it, and together we have created a company culture that supports it. That is the only way competitive intelligence can provide value – with the complete backing of the company decision makers.(Robert Flynn, CEO and Chairman, SCIP Ninth Annual International conference 1994)

The value of Competitive Intelligence

• The end is near. 70% of Fortune 1000 companies will be replaced in the next few years. 40% of the Fortune 500 companies in 2000 were no longer there in 2010 (Edward E. Lauder, built for change 2013)

• A majority of executives in both groups [across regions and industries] say their companies found out about the [significant] competitive move too late to respond before it hit the market (McKinsey 2008)

Competitive Intelligence Amnesia

If you think that your business does not need competitive intelligence, then think again. There is almost no commercial context in which competitive intelligence cannot be a key addition to the process of starting a business, building it, succeeding in it, or even just surviving.You may want to think on this: is my business so successful, so deep-rooted, and well-financed, that there is virtually nothing in the competitive landscape that can impact it? Of course not!

Competitive Intelligence Amnesia

What would happen if your primary competitor without warning went out of business? Or, what if a secondary competitor were incorporated into a rival business much larger than you? What if your most important supplier decided to became a rival competitor? Knowing how to develop proactive competitive intelligence might at least remove the ‘‘unexpected’’ from these unforeseen scenarios. These and many more critical events are places where effective competitive intelligence, which can give you an early warning, can be a powerful tool for you and your business.

Competitive Intelligence Amnesia

If you had the opportunity to grill some or all of your competitors face-to-face on any aspect of their business operations or activities, and they had to answer each and every question put to them, what would you ask them?

A Question for you?

Because your strategic marketing plan requires that your company keeps a close track of your competitors’ plans and actions on a regular basis, you may want to find out –

o Product – what are they selling?o Price – what price are they charging?o Promotion – what activities are they conducting to promote their

products?o Place – where are they selling their products?o Other – organisation size / structure, channel structure?

What do you really want to know?

Some aspects of your competitors business model may do some things better so take the opportunity to benchmark against and learn from them –

o How does the competitor position itself against you?o What are their key strengths & weaknesseso Understand what their strategic priorities and plans for growth areo Their business model and sources of incomeo Their R&D budget and new product pipelineo What are their go-to-market and channels strategies?o Their sales process and pricing structures; the value of a typical sale;

how is it negotiated, how do they sell add-ons?

What do you really want to know?

For many companies & market intelligence functions, resources such as the internet, have made gathering information on competitors easy.However, competitive intelligence is much more than this, it’s ultimate aim is to create a competitive advantage.As the internet is mostly public domain material, information gathered is less likely to result in insights that will be unique to the company.There is also the risk that the information gathered will be out-of-date and will mislead users.

Where do you find answers?

About Rauch Associates Rauch Associates is a competitive intelligence research company, based in Silicon Valley, United States. With a 20-year proven track record focused on putting competitor information into the hands of executives, Rauch specialise in gathering qualitative primary competitive intelligence, delivering hundreds of research projects annually, studies initiated by specific client requirements relating to competitor threats of one kind or another.

Research ExpertiseWe have industry-sector research expertise and language capabilities that enable us to deliver competitor studies to an expanding global client base.We provide our clients with an in-house resource model, underpinned by our own proprietary training programme that ensures 100% of the primary research is undertaken by Rauch senior analysts giving you the highest level of professionalism, quality control and ethics.

Market Segments By way of background, we serve almost a dozen distinct market segments with studies that are tailored to the particular needs of clients in each segment. These segments include:-

o Computer Softwareo Hardware & Mobile Deviceso Networking Products and Serviceso Cloud, SaaS & Managed Serviceso Manufacturingo Retailo Finance & Lawo Health & Medicineo Insuranceo Transportationo Defence & Public Sector

Analysis performed For any of the market segments we serve, a wide range of research studies can be performed including :-

o Pricing Analyseso Organisation & Expenditure Benchmarkingo Go-to Market Strategyo Channel Structure/Programso Product Features/Weaknesseso Product Demonstrationso Professional Consulting & Serviceso Battle Cards & Sales Guideso Customer Surveys

Research approachWe believe the best way to get accurate competitor information is to go directly to the primary source of the information being sought.We have neutral consulting parts of our company that have an established reputation for carrying out due diligence for organisations that are reviewing the market for different types of solutions.This approach, via a neutral consulting / pre-sales scenario enables us to collect information that would be difficult for you to collect internally since competitors are unlikely to provide much useful information directly to a competitor.

Research methodologyThe competitive information required for each research project undertaken is obtained through a series of specific, custom one-on-one interviews with key sales, marketing and technical personnel from each competitor, as well as through an exchange of additional data directly from the competitor, for the purpose of asking them to clarify their public position regarding their standard business practices.Our analysts speak directly to the target competitors (and resellers to the extent useful and necessary), rather than relying solely on published documents, web postings, stock filings, or anecdotal information from customers.

Research methodologyOur analysis employs Rauch Associates’ systematic and proprietary methodology for determining the best way to approach a given competitor including, what questions to ask to solicit public domain information that can be used to assess the information required for each research project. This methodology provides a way to get direct access to the customer-facing sales, marketing and technical staff in a competitor organisation and provides a forum in which to ask questions about the non-private aspects of their business.

Research methodologyWhile this methodology is carefully crafted to ensure that no confidential or proprietary information is collected, by correlating the information gathered in this way from several sources within a competitor organisation, as well as with other publicly available information, a comprehensive assessment of the competitive information required for this project will be developed.

Ethics & LegalityOur methodologies are designed so as to absolutely respect and honour every business' unequivocal right to designate and protect any information they choose to characterise as non-public or proprietary.Companies are only asked to clarify their public position regarding their standard business practices and to only provide information that is not considered to be in any way proprietary in nature.“We only use information that is divulged to us without any conditions of confidentiality”.

Accuracy of our research dataAs to accuracy, we generally ask overlapping questions of different stakeholders in different territories and/or business units in order to ensure that the information they provide is consistent.We ask questions from different perspectives, for example by asking different people with the competitors organisation questions about installed base, average unit prices, revenues, and units sold, we can correlate these pieces of information to ensure that they are consistent.And whenever we identify an inconsistency, we frame a new set of follow up questions to resolve the inconsistency and talk to the competitor again. The process continues until all data collected is consistent.

Validity of our research dataOur research focuses on gathering intelligence directly from stakeholders within the target competitor’s organisation with the required knowledge of the subject matter in question.Rauch analysts independently identify and contact only those that are specifically designated by the competitor as authorised to provide the information we are seeking for any given research project.So when we research a competitor, we document and analyse the things that the competitor says and does when it presents itself in response to enquiries from the public.

Our key differentiatorSpeaking directly to target competitors offers a number of advantages over simply interviewing customers since much of the information sought may not be attainable through customer interviews or other indirect means because customers and other indirect sources may not generally know this kind of detail about their vendors.Rauch can be used to talk to your competitors, collecting “the difficult, not found in the public domain, competitive intelligence” that when combined with the secondary information your in-house team collects, enables you to create the complete competitive picture.

Working with Rauch AssociatesOur flexible nature means that rather than working on the basis of a costly, on-going subscription service, everything we do is tailored to meet your needs.We will work with you to build a customised programme of research and insight that will meet your on-going requirements, whether it is by performing individual one-off projects or a phased programme of on-going research.

Europe : Martin Holmshaw : +44 (0)20 8196 9513 / +44 (0)7895 381851United States : Ken Rauch : +1 [email protected]