Look for the organizations with a well implemented competitive intelligence function, and you will likely find only companies, most of which are large. However, the public sector interest in competitive intelligence is definitely increasing. Governments competing for foreign investments must understand what differentiates them from other countries in the eyes of investment managers. Cities or countries that want to attract tourists need to know their unique selling points compared to other touristic hotspots.

1. Applying Competitive Intelligence in the
Public Sector
By Barend van de Kraats, Annalise Market Intelligence
Look for the organizations with a well implemented PROVINCE OF SOUTH HOLLAND
competitive intelligence function and you will likely find Located on the west coast, the province of South
only companies, most of which are large. The non-profit Holland (Provincie Zuid-Holland, PZH) is the most densely
sector interest in competitive intelligence is definitely populated province of the Netherlands (see Figure 1). The
increasing, however, and includes a wide variety of province’s capital is The Hague; the largest city is Rotterdam.
organizations. International aid organizations such as the PZH aims to position itself among the top economic
World Wildlife Fund or Médicins Sans Frontières are well regions in Europe. To achieve this, PZH wants to establish a
aware of their competitive position in the “market for gifts” competitive, innovative and durable economy by focusing on
and continuously monitor the competition. Governments two main issues:
competing for foreign investments must understand what
differentiates them from other countries in the eyes of • Ensuring a strong economic structure and optimal
investment managers. Cities or countries desiring to attract climate for company establishments (“Kwaliteit in de
tourists need to know their unique selling points and how basis”).
they compare with other touristic hotspots, as the National • Strengthening those economic sectors that contribute
Historic Museum case in Sidebar 1 demonstrates. most to the international competitive position of the
In the past few years, we have been performing province or those with the potential to do so in the
significantly more competitive intelligence analysis for future (“Excelleren in sterke clusters”).
governments. The intelligence approach governments require
is quite different from what traditional market research Annalise supported PZH on the second issue, also called
agencies and management consultancies offer. At least in the “cluster policy.” The study focused on four sectors where
the Netherlands, central and local governments have begun PZH expects to have the most added value and where “return
to make their way toward understanding and applying on policy” is likely to be highest: 1) Greenports; 2) Transport
competitive intelligence. and Logistics; 3) Life and Health Sciences; and 4) Water and
Although the basic need is the same for governments as Delta. For these clusters, PZH defined the following goals:
for companies – to maintain and improve their competitive
position -- providing competitive intelligence to government • Maintain the competitive position for Greenports and
organizations requires a different intelligence approach. The Transport and Logistics.
tools applied by governments to achieve this often differ • Expand the market position of Life and Health
from those used by companies. While companies can directly sciences.
influence their products and pricing, and promote them, • Promote market share growth of Water and Delta.
governments have more indirect ways of improving a region’s
competitive position: subsidies, taxes, lobbying, and – not Given the increasing competition from other regions in
unlike companies –PR. the Netherlands as well as from other countries in Europe,
A good case study is the intelligence project we North America and Asia, what can PZH do to maintain and
completed last year for the Province of South Holland. improve its competitive position in these sectors? That the
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2. applying CI in the public sector
provinces in the Netherlands have no legislative power and
only limited tax authority only complicates the situation.
This implies the need for significant creativity when
developing an effective cluster policy.
PROJECT PLAN
To make the execution of the cluster policy as effective as
possible, Annalise proposed a market intelligence approach.
Before answering the bottom line question – what can PZH
do? – we first wanted to evaluate the national and international
competitive position of each of these clusters. Only when
their current position was clearly understood would it make
sense to further investigate the role the government and,
more specifically, the province played in maintaining or
strengthening the competitive position of these clusters.
For the first phase of the project, we recommended a
combination of primary and secondary research based on
Figure 1: Location of Zuid-Holland
SIDEBAR 1: NATIONAL HISTORIC MUSEUM
interview with their internal experts and the numerous
reports already available within PZH. This alone is of
In 2007 three major cities in the Netherlands competed
tremendous value in that clients often already possess much
for the new National Historic Museum to be located
information relating to a proposed project. This information
within their city borders. Although everybody expected
is very fragmented, however, and must be pieced together
Amsterdam or The Hague to win, it was the city of
from many different reports and the input of employees.
Arnhem that came off best. It turned out that Arnhem
Bringing it all together provides an overview and creates a
had developed a strong business case built on solid
competitive intelligence. The city studied its strengths basis for further decision-making support.
and weaknesses against those of The Hague and In this first phase, we applied two analytical tools to
Amsterdam and came to the competition with some completely understand the competitive position, trends, and
convincing arguments. developments for each cluster. SWOT (strengths, weaknesses,
opportunities, threats) analysis is a well-known tool that
First, Arnhem maintained that their location was best
every CI professional is likely to apply on a regular basis. Less
for the new museum’s target groups: school classes and
familiar is the S-C-P (Structure Content Performance) analysis
families. Accessible by car and school bus, the proposed
we conducted to understand the competitive behavior of
location of the museum is in the woods surrounding the
competing regions within each sector and the effects of that
Openluchtmuseum (open air museum of Dutch history),
behaviour on the performance of South Holand companies
the zoo, and other attractions of interest to schools and
within that particular cluster. The basic tenet of the S-C-P
families.
paradigm is that the economic performance of an industry
Second, Arnhem involved the Openluchtmuseum staff is a function of the conduct of its buyers and sellers which,
in the museum plan. This initially appeared to be a in turn, is a function of the industry’s structure. (For further
disadvantage, as both museums focus on Dutch history. explanation see Tables 1 and 2.) The S-C-P paradigm facilitates
By winning the Openluchtmuseum’s support for the our understanding of an industry’s competitive behavior and
city’s plan, however, clear financial and content-related
helps identify the key issues responsible for the (relative)
synergies could be incorporated in the business proposal.
performance of that industry.
Last but not least, Arnhem presented an early stage
concept for the museum based on international research.
Arnhem took a close look at museums like the Abraham
DELPHI
Lincoln Presidential Library & Museum,Vasu Museum
This first phase provided a good starting point.
in Sweden and the Museum of Civilisations in Ottowa,
Canada. Perhaps without even realizing it, the city of But additional work was required to establish a solid
Arnhem produced a best practice example of a CI effort. understanding of the issues in each sector and how PZH
could address them, thus strengthening the competitive
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3. applying CI in the public sector
TABLE 1: S-C-P OVERVIEW
Shock • Technology breakthroughs.
• Changes in government policy or regulation.
• Changes in tastes or lifestyle.
Structure • Economics of Demand: market failures, availability of substitutes,
differentiation of services, rate of growth.
• Economics of supply: private vs public supply, market failures, diversity of
producers, fixed/variable cost structure, technological opportunities.
• Chain economics: bargaining power of input suppliers, bargaining power
of customers, information market failure, vertical market failure.
Conduct • Marketing: pricing, promotion, distribution.
• Capacity change: expansion/contraction.
• Vertical integration: contract out, joint ventures, PPP.
• Internal efficiency: cost control, logistics, organizational effectiveness.
Performance • PSA attainment.
• Social welfare.
• Technological progress.
position of each cluster. As a next step, we proposed a Delphi smaller companies in each cluster. We also sought the input
analysis (see Table 3 for Delphi strengths and weaknesses). of local government and branch organization employees. We
This interactive research method obtains forecasts or completed rounded out the Delphi group with experts from
identifies issues from a group of independent experts. Each science and education.
selected expert answers questions in two or more rounds; Because we were free to be completely open about our
after each round a facilitator provides each person with an client and the project itself, the Delphi participation response
anonymous summary of all the experts’ replies.
The experts can then revise their previous TABLE 2: S-C-P KEY FEATURES
answers on the basis of the responses of the
others. After one or more of these feedback
Determine what to Focus on major issues.
rounds, the expert group converges toward a
look for Avoid looking for ‘anything about the
consensus, or at least two or more scenarios.
industry.’
The purpose of the Delphi research in Start with overview information.
this project was twofold. First, it challenged Only get raw data once issues identified.
the research results obtained from phase I. Did Most useful if accomplished early in study.
the experts identify the same primaryissues in
each cluster? Second, the experts offered their Collect desk and field Gather overview data first: identify key
opinions regarding how the government – more data industry players, look for industry studies,
specifically, PZH – could provide support consult public sector reports, consult with
to address these issues and thus improve the department and external experts
competitive position of each cluster. Other published information: make smart
use of search engines, trade associations,
For each of the four clusters, we
trade magazines, business press,
approached about ten experts with a set of 15
international government sources.
to 20 questions. To form the expert groups, we
relied on PZH’s network, but also did some
Interpret data in Examine unusual or particularly influential
cold calling. One advantage of working for
industry analysis elements.
governments as opposed to companies is that it
is actually much easier to get cooperation from
Source: The Strategy Unit
experts. We interviewed managers at leading and
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4. applying CI in the public sector
In a plan published last October, PZH formalized its role
TABLE 3: PROS AND CONS FOR as coordinator, vision shaper, stimulator and supporter.
THE DELPHI METHOD
LESSONS FOR THE CI COMMUNITY
Pros Cons
As a discipline, CI is relevant not only for commercial
enterprises, but to every organization—including non-
Possibility to investigate Participation of
profits and governments. Most governments, in fact, are
complex issues in a experts required to
already performing some type of competitive intelligence.
structured manner. be effective.
This effort, however, is not as well structured as in “best-in-
Possibility to go into Relatively long class” companies, and often the function titles of the people
depth, look ‘beyond the timeline before involved in the effort look very different. For example, within
surface.’ sensible results are PZH one person is fully focused on the Greenports cluster.
obtained. This individual maintains an internal and external network
Elimination of group of experts and stakeholders, keeps the province’s cluster
thinking. Determination knowledge up to date by investigating all relevant trends and
of representative
developments, and continually thinks about how to improve
Elimination of hierarchic sample of experts is
the position of the cluster both nationally and internationally.
differences. subjective.
Such activities come very close to what we could call a CI role.
The CI profession has a substantial opportunity to
was very high. Only one expert declined to participate, as expand into non-profit and public sector support. Although
he thought this should not be the business of the province. the specific objectives of these organizations are quite
(Note that this too is important information concerning the different from those of companies, we are talking about
role of PZH.) essentially the same issues to which we can apply the same
We limited the Delphi research to one feedback round. research and analytical tools. This PZH case is just one of
For each cluster we obtained a Top-3 ranking of issues, many potential opportunities.
including the experts’ opinion on the government’s role in
each issue (see Figure 2: Delphi Process). At the end, we
integrated the outcomes of the Delphi research with the
phase 1 desk research to develop clear outcomes per cluster. Barend van de Kraats is Managing Director of Annalise
For most clusters the dominant issues were availability of Market Intelligence, a Dutch research & consultancy firm
business locations, infrastructure, durability, and education. focusing on competitive intelligence. Barend has over ten
Based on the Delphi round and additional desk research years of experience in research and intelligence with a
on the responsibilities and power of provinces as compared primary focus on the financial services industry and public
with that of local and central government, we drew the sector. Before joining Annalise, he worked for the Dutch
following conclusions on how PZH could support the asset management company Robeco and was head of research
clusters’ competitive positions: at McKinsey & Company. He can be reached at barend@
barendvandekraats.nl
• PZH can optimize its
competitive position
by cooperating closely
with central and local
government.
• PZH can be very effective
in public relations
and lobbying given its
position as an impartial
representative.
• PZH can be an active
participant, stimulating
and initiating innovative
initiatives within the
clusters.
Figure 2: Delphi Process
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