SETTING UP A COMPETITIVE INTELLIGENCE PROGRAM

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Managing complexity has turned into a major objective for modern organizations, operating in an ever more globalized environment. This is often achieved through gaining insights about the company’s markets, customers, products, and rivals – in short, through a process of competitive intelligence. In an ideal world, competitive intelligence is a lean process delivering meaningful and actionable insight for strategic and tactical moves. In the real world it is rarely so streamlined and not all organizations manage to fully leverage the huge informational advantage it gives. The GemSeek team has developed a sophisticated proprietary methodology to help organizations make the most out of their marketing intelligence activities and through a gradual process – turn them into engines for growth and excellence.

The first stage in setting up a comprehensive competitor intelligence program is the Enabling Stage. It addresses many common problems resulting from companies constantly striving to find an optimal internal architecture.

As organizations restructure, new functional needs for competitive intelligence arise at the product line, business unit, regional, local, or corporate levels. Sometimes new restructuring establishes new marketing divisions without rethinking the roles of old ones. The result? One and the same type of information is collected at numerous different levels from possibly disparate sources and is stored in all types of imaginable formats. The Enabling Stagefocuses on streamlining the process, thus yielding a “single source of truth” in the company.

- Inventorize

- Remove duplication

- Standardize

- Aggregate data

- Gain insights

- Process for two-way communication

- Benchmark and identify gaps

- War-gaming exercises

- Forecast and strategic decision-making

- Identify key trends

- Flexible decision-making

- Long-term strategic development

- Inform R&D, branding, M&A, alliances

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We begin by making an exhaustive inventory of all places where competitive intelligence is conducted, all types of data used, all sources utilized, and all purposes needed. This simple process often points many duplications that can be eliminated seamlessly, and the newly freed resources –redirected to more strategic purposes. Then all data sources are standardized – only one source needs to be used for a single indicator across the whole organization. For example, one of our customers had country level executives use local GDP forecast, whereas corporate officers relied on an international consultancy for those. Even small differences, though, made a large impact in our client’s company which operates on the FMCG market. Additional organizational resources were wasted just discussing which figure is the “correct one”.

The Enabling Stage eliminates these conflicts by establishing single sources which are then fed into standardized forms across the organization. At its best, this database should be accessible online for the whole organization and lend itself easily to analysis through an intuitive and user-friendly interface. There are now many such solutions on the market, including GemSeek’s own GemSpark Dashboard – a state-of-the-art online data management and analysis tool, which can be used to glean valuable insights from the data at hand.

After streamlining the process, the organization can move onto the second phase – the Competing Stage.

Using the data gathered companies can effectively benchmark themselves against their key competitors and identify performance gaps. Such exercises not only stimulate internal discussion but also yield truly actionable messages. For example, we helped one of our clients – a leading consumer electronics company – benchmark against their most aggressive rival, only to find out that the competitor would bring 2.5 times as much revenue per person employed than our client. This sparked cost-reduction efforts that produced sustainable bottom line improvement. The Competing Stage, though, goes beyond mere comparisons. Leveraging advanced statistics, collected data can be used to generate forecasts for market sizes and shares across geographies, business units, and products.

SETTING UP A COMPETITIVE INTELLIGENCE PROGRAM

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Forecasting data is sometimes generated on an ad-hoc basis, making it a “big push” type of project. Integrating the competitive intelligence and forecasting processes, on the other hand, provides for rich feedback loops between the two and leads to better and deeper market understanding. We tried that synergistic approach with a market modeling exercise for a leading medical equipment manufacturer and were pleased to report errors within 5% – quite a feat given the highly volatile and uncertain nature of medical device orders. Having intimate competitor knowledge, meaningful benchmarks, and robust forecasts, companies in the Competing Stage can also endeavor on War Gaming sessions –strategic games whereby senior management splits and half take the role of a competitor to generate market scenarios and strategies, given the full information set. This, together with all the other components of the Competing Stage, leads companies to more informed and better decisions that fortify and expand their market positions.

The ultimate stage of our competitive intelligence program is the Leading Stage.

Its main aim is to identify key trends in markets and consumer preferences before they have become obvious. This stage aims to build organizational excellence and industry leadership by spotting and leveraging future game-changers and integrating this knowledge into strategic decision-making. The Leading Stagecomprises the complete incorporation of all relevant market knowledge into the company’s behavior. At this stage competitive intelligence is able to guide R&D spending towards the hottest topics, to identify best M&A strategy which will maximize value over the long-run and also to inform brand equity initiatives in such a way that a company starts building a brand image that responds to the long-term needs and values of its customer base.

SETTING UP A COMPETITIVE INTELLIGENCE PROGRAM

Stage II: Competing Profile

Resources needed Medium

Change in internal processes Medium

Implementation Time Frame 6-12 Months

Resistance Risk Medium

Benefits High

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Market intelligence at the Leading Stage can also crucially guide internal budgeting and investment prioritization. We supported one of our customer’s strategic decision-making by integrating competitive and market information into a country prioritization model, which was then used to allocate budgets and new investment initiatives across our clients’ global operations.

When evaluating their internal efforts, organizations find themselves at different stages of their use of competitive intelligence. However, irrespective of whether they want to leverage cost reduction through removal of duplication and standardization, to enjoy efficiency gains through benchmarking and forecasting, or to assume the role of industry leader and visionary, the competitive intelligence program is a complete and sophisticated tool that will allow them to achieve their aims and realize meaningful and lasting impact for their stakeholders.

SETTING UP A COMPETITIVE INTELLIGENCE PROGRAM

Trend• Through synergies between different levels and tools in the CI process identify

key trends and threats before they are apparent to the market

Decide

Develop

• Use competitive intelligence to delegate decision-making authority at most

appropriate organizational level

• Gauge markets to determine needed degree of centralization

• Combine insights to pinpoint opportunities

• Use analysis to guide strategic development decisions

Strategize• Use competitive intelligence insights to identify and target potential M&As

• Guide R&D spending according to CI trends

• Combine marketing and CI functions to enhance branding and positioning.

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SETTING UP A COMPETITIVE INTELLIGENCE PROGRAM