1. What You Don’t Know About Your
Competitors May Sink You
November |2009

2. What You Don’t Know About Your Competitors May Sink You
What?
According to a study by the Society of Competitive Intelligence Professionals,
about 90% of the Fortune 500 companies in the US are conducting competitive
intelligence activities. A majority of large enterprises, according to another study
(about 70%), believe that having competitive intelligence in the past would have
increased the effectiveness of their campaigns. Yet, many companies, including
some market leaders in the rest of the world, do not have well-defined
competitive intelligence plans. They evaluate their strategies and tactics in
isolation, without taking into account what the competitors are up to or how
they could react to them.
Competitive intelligence is one of the key success factors in today’s highly
competitive and dynamic marketplace. Companies need to continuously monitor
their competitors, especially before making key strategic decisions and
investments around new product and campaign design, price and promotions
plans, and branding and repositioning decisions.
But, Why?
If not proactively managed, one of your competitors may launch a similar
product to the one your R&D Department was working on just before you.
Another competitor may apply deep discounts the same week you were planning
to increase your prices. Any such actions by your competitors can and will go a
long way towards negatively affecting your market share and brand image.
To address such risks, companies need to take into account not only their own
strategic priorities and voice of their customers, but also what their competitors
plan, develop and offer to the market, in order to have the complete picture for
their strategic and tactical investments. This is why, according to the
respondents of a recent Outward Insights survey:
 83% consider competitor intelligence important in business development &
sales
 79% consider competitor intelligence important new product launches
 71% consider competitor intelligence important R&D planning and execution
Unfortunately, most companies that do competitor research perform such
activities only on an ad-hoc basis and do not follow a structured process or plan.
What’s worse, such research often gets lost on the desktop of a few specialists
and never sees daylight again. Effective competitive intelligence with high ROI
requires the right focus and utilization, which comes with good planning and
dedication.

3. So, How?
The obvious, but not so commonly covered, first step in competitive intelligence
is the identification of competitors. Unfortunately, most companies assume only
their usual rivals create competitive risks and fail to recognize a potential up-
and-comer, or a complete newcomer until it is too late. For example, Xerox failed
to recognize Canon as a potential threat before it entered into its market and US
car makers considered Honda as only a motorcycle manufacturer and did not
consider it as a future competitor at the time. Identification of the competitors
requires ability to foresee who might enter into the market, as well as who has
substitute offerings stealing market share from them, such as a speedboat
company stealing customers from Ford, or 3G mobile operators stealing share
from the traditional ISP market.
Once the current and potential competitor list is defined, companies should set-
up operations to regularly follow news and continuously gather intelligence
about their:
Items Information to Gather
 Expected new promotions launches
 Type and propositions in campaigns
Promotions &  Target segments and regions
Campaigns  Media and channels used
 Tone and messages used
 Awareness, recall and impact in the market
 Comparison against own price levels
Prices &  Awareness and perceived level of prices by customers
Discounts  Price discrimination practices
 Communication strategies for price changes
 Expected new product launches
 Comparison against own product portfolio
Products &
 Mapping against market segments
Propositions
 Perceived quality and attractiveness of products
 Bundling strategies
 Expected new channel launches
 Comparison against own channel mix
 Employee capabilities across channels
Channels
 Geographical distribution of channels
 Effectiveness of different channels
 Incentive mechanisms across channels
 Customer journey and wow factors
 Information collected about customers
Customer
 Differentiation by customer segments
Experience
 Consistency and differences across touch points
 Customer satisfaction from the experience
 Duration to fulfill products, provide services and resolve
complaints
Service Levels  Differentiation by customer segments
 Consistency and differences across touch points
 Customer satisfaction from the service levels
Operational  Process flows and key performance indicators
Model  Systems architecture and technologies used
Human  Organizational structure, roles and responsibilities

4. Resources  Compensation model and levels
 Level of staff quality
 Employee satisfaction and loyalty
 Mission, vision and strategic priorities
Strategies &
 Perceived positioning in the market
Positioning
 Strategic goals and initiatives
Although information about all these items should be collected continuously to
facilitate quick responses and opportunistic actions, regular reports should also
be compiled quarterly or semi-annually to create an archive on the competitor
profiles, to use as an input in the strategic planning and key initiatives such as
new product launches.
Sources which can be used to gather such information are numerous, with
different levels of cost (difficulty), content, and depth:
Source Content
 Company mission, vision and strategic initiatives
(if public)
Desktop Research
 Current, past & new to market products, prices and
(News, company
promotions
web sites, blogs)
 Recently launched initiatives and systems invested
in
 Customer experience across customer lifecycle
Observation  Service levels and employee capabilities across
(Mystery shopping, channels
visits, calls)  Up-to-date product, price and promotions
information
Case Studies
 Former and current strategic initiatives
(Conferences,
 Impact and lessons learned from key initiatives
interviews)
 Profile, hence expected mindset of top
Competitor HR
management
(Profiles, open
 Changes in top management positions
positions)
 New organizational positions and investments
 Ongoing projects and key initiatives
Third Parties
 Products and systems purchased and in use
(Consultants,
 Organizational and operational details
suppliers, partners)
 Media investments and preferences
 Possible responses to own decisions and actions
Simulation  Possible short to long term strategies of the
(War-gaming, game competitor
theory)  Possible market reactions with current and future
strategies
Modeling
 Future sales and market share
(Forecasting, system
 Probabilities of different strategies and responses
dynamics)
All the information collected about competitors should be action oriented,
creating immediate responses upon learning or critical inputs for decisions in the
future. Hence, companies should also pay attention to measuring and evaluating
the value-add of each source and category of information collected to maximize
return on their competitive intelligence investments.

5. What Next?
In order to start structuring and regularizing competitive intelligence, companies
should establish an external or outsourced team of specialists or allocate part-
time responsibilities to their existing resources to initiate and plan intelligence
gathering activities. In this plan, the sources, content and frequency for
intelligence gathering should be well-defined and supported by a knowledge
management platform to keep the information manageable and accessible by
the right parties over time.

6. About Forte Consultancy Group
Forte Consultancy Group delivers fact-based solutions, balancing short and long term
impact as well as benefits for stakeholders. Forte Consultancy Group provides a variety
of service offerings for numerous sectors, approached in three general phases -
intelligence, design, and implementation.
For more information, please contact
info@forteconsultancy.com
Forte Consultancy Group | Istanbul Office
www.forteconsultancy.com