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Competitive Affairs

The Next Step in the Continuing Evolution of Business Productivity

White Paper For Circulation and Discussion Deliberately Using Competitive Environment Information To Outsmart Competitors & Increase Effectiveness Across Many Departments In This White Paper Executive Summary 1 Introduction: Why Competitive Affairs Is Important Now 3 Competitive Affairs & CI, BI, KM, etc.: What’s the Difference? 5 Why Departments Need Competitive Environment Information 8 Ignoring Competitive Affairs Hurts The Bottom Line 10 Elements Needed to Deliberately Manage Competitive Affairs 11 Return on Investment (ROI) from Competitive Affairs 14 How Competitive Affairs Works Within Organizations 15 A Practical Roadmap to Get Started 16 The Market Is Responding to Serve Competitive Affairs Needs 17 Competitive Affairs is the Next Logical Step in Business Productivity 19 Attachment:

I. Sources II. Common Competitive Affairs Issues, By Department

III. About the Authors

© 2001, All Rights Reserved.

Executive Summary

“Competition has always been central to the agenda of companies… Indeed, competition has become one of the enduring themes of our time.”

--Michael Porter, Harvard Professor, on why Competitive Strategy is still so widely read

Central to any business is its ability to sell products or services in a competitive environment, even in highly regulated industries. Business professionals work hard to be competitive, not only on behalf of the whole company but also within their own department or other capacity. Sell more products or services. Increase market share. Differentiate. Maximize shareholder value. Reduce costs. Design and pursue effective strategies. Hire the best people at the ‘right’ compensation level. Cut the best deal. Each of these activities requires some understanding of at least one aspect of that organization’s competitive environment. Without a consistent flow of useful information, these key decisions are likely based on an “understanding” that is out-of-date and/or inconsistent from individual to individual in the same company. It’s no wonder that CEOs frequently rank “understanding competitors” as a top information management problem.

“Competitive Affairs” is the deliberate practice of managing information to track and understand specific elements of the competitive environment that affect your ability to succeed. This white paper explores Competitive Affairs, including evidence that a growing number of organizations now deliberately manage it as a distinct function.

The primary purpose of Competitive Affairs is to serve the day-to-day information needs of many departments throughout an organization. It is more focused than Environmental Scanning which involves reviewing the overall external picture. It includes but goes beyond the future-focused analyses of “Competitive Intelligence,” by also producing practical insights that are immediately useful for daily, tactical decisions affected by competitive pressures. Competitive Affairs addresses these areas and more. This paper explores the following questions:

What decisions are being made regularly that require an understanding of one or more aspects of the organization’s competitive environment? What specific information could be used to increase the accuracy and effectiveness

of those tactical or strategic decisions?


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Who inside the organization already has information about one or more pieces of the competitive puzzle? (in files, computers, research, people’s heads, etc.)

How are organizations moving beyond generic “knowledge management” approaches to instead focus on combining information assets in ways that provide specific, useful support for the Competitive Affairs needs in key departments? How are organizations managing this process to ensure that the most important

internal groups share and use competitive environment information effectively? What does this mean for the growth of new products and services produced by

vendors who target the “Business to Business” market? Competitive Affairs makes innate business sense. People intuitively ‘get’ the fact that they need to understand their own competitive environment to succeed on the job, AND most are aware of the large amount of information they already own which goes underutilized or unused entirely. Being able to combine competitive environment information from a variety of sources already inside an organization, then put it to actual use for many departments, is akin to ‘found money.’ In nearly every organization, individuals across many departments spend time gathering and using information about specific parts of their competitive environment – competitors and related products or services, suppliers, distributors, major customers, regulators and other ‘influentials’ that can affect their competitive position. Each job may have its own focus; however, key information about competitors and other players can be used by multiple departments who apply it in their own way. At the same time, by combining the “puzzle pieces” of information and perspectives to which each department routinely has access, an organization can build a more robust picture of their competitive landscape. Multiple departments and individuals separately searching for the same information results in duplicated effort and likely duplicate purchases of on-line information services, surveys, reports, periodicals and so on. This redundancy of time, effort and expenditure is inefficient and costly. Unless a deliberate approach is created, department staff typically have no practical way to easily know the full range of competitive environment information that already exists inside their own organization. Even when they do know about existing data resources, rarely are key information and critical insights readily available in a format that is easy to use for everyone. Given reductions in duplicated efforts, elimination of redundant information purchases, better use of information assets that are already owned by an organization, more robust understanding of important competitive forces, and the ability to quickly assess the situation to make more effective decisions -- the ROI or return on investment from deliberately managing Competitive Affairs can be impressive. Knowing that you ought to tack action to be competitive is no longer enough. Media reports of layoffs, roller-coaster stock prices, businesses buckling under fierce competition, mergers, industry consolidation – these days companies need to ensure that costs are as low as possible, employees are as productive as possible and tactical and strategic decisions are as effective as possible. Organizations are not the only ones taking Competitive Affairs issues seriously. Consultants, software manufacturers, information providers and other vendors in the business-to-business market are responding with new and effective products and services to support Competitive Affairs activities. Because of this overwhelming need to improve competitiveness effectively and efficiently, deliberately addressing Competitive Affairs has become the next step in the evolution of business productivity.


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Introduction: Why Competitive Affairs Is Important Now Competitive Affairs is the set of activities or discipline of deliberately managing information about your external environment to clearly understand what impacts your ability to be successful, tactically and strategically. In plain English, Competitive Affairs is about an organization (or specific department or agency or business unit) deliberately understanding ‘who’ and ‘what’ it is up against, then using that information to succeed. “Know thy competitor” is a well-accepted aspect of business. However, efficiently managing information to support decisions affected by competitive pressures continues to be a major problem.

Most Executives Do Not Get the Competitive Intelligence They Need to Support Key Decisions

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

"24x7" Collection of CompetitiveIntelligence is a Key Issue

Intelligence to Improve Sales &Marketing is Most Valuable

Developing Winning Strategiesis a Major Problem

Gathering Intelligence forDecisions is a Major Problem

Figure 1. Survey of 500 senior execs by Knowledge Systems & Research, Inc. Nov. 2000

Such information and analyses about the competitive environment is needed not only for CEOs and top executives, but for other areas of an organization as well. Survey findings specifically call out the importance of support for Sales and Marketing, for example. Companies engage in activities every day that require some level of understanding of their external, competitive environment:

• Executive Leadership uses it for corporate planning and strategy

• Marketing uses it for identifying target markets and differentiation

• Sales uses it to explain ‘why I should buy from you instead of your competitor’

• Finance & Legal use it for due diligence in mergers, alliances and acquisitions

• Purchasing & Contract Management uses it for supplier and other contracting

• Human Resources uses it for hiring and retaining the good employees

• Public Affairs, Investor Relations, Public Relations, Community Relations, Government Affairs use it to understand community allies and adversaries

• Research & Development uses it to identify trends inside & outside the industry [See Attachment 2 for list of common Competitive Affairs issues, by department.]


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Go around a company and ask the following question in each department or functional area, “Who or what in the environment outside your company potentially impacts your

ability meet your goals?” Each department will give you a different answer. A company’s external competitive environment consists of many players who have varying levels of influence on the success of the company and on each department or job function. The ‘competitive environment’ consists of everything that happens or exists outside of an organization. See Figure 2. Not all organizations or industries have the same level of concern about each force. For example, government as a regulator (or as a major customer) is a far more important force to anyone in health care than it would be to bicycle manufacturers or graphic arts agencies. Effective Competitive Affairs focuses on tracking and understanding the specific external forces that have the greatest potential impact on your organization’s overall success or on the ability for certain departments to meet their goals.

Figure 2. Competitive Environment Forces, similar to “Social Marketing Environments” Kotler (1989)

All companies, government agencies, associations or other organizations make some effort to understand forces in their external environment, even if it’s not a deliberate, company-wide Competitive Affairs effort. Typically, each department tries to understand its own small part of the ‘competitive environment’ picture, with no real connection to insights from other departments. Some work groups gather original research or use research-based tools, while others rely solely on personal perceptions and experience. The result? Nearly all organizations have a large amount of ad hoc, unconnected Competitive Affairs-related information scattered throughout its own workgroups, divisions, and departments. This includes research findings and documents in filing cabinets, reports on bookshelves, purchased information services used periodically, data buried in complex databases, and other information in volumes of emails, hard drives and, of course, residing inside the heads of many key employees. It’s ironic that most companies still manage their competitor information in extremely decentralized and inefficient ways, yet “Competition” is a primary concern consistently cited by CEOs.1 But the inefficient approaches are changing. Several factors contributing to the recent emergence of Competitive Affairs as a deliberate discipline include:

Global competition is heating up. Competitors can be anywhere and, especially in the ‘E-space’ of the internet, everywhere.

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The end of the Cold War in 1989 sparked capitalist economies generating new competitors, while the North American Free Trade Agreement (NAFTA) opened up international commerce even further.


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In 1989, twice as many US companies acquired foreign companies than the reverse. Less than a decade later, the tables had radically turned. By 1996, five times as many foreign companies were the acquirers of U.S. companies.2

Even with the demise of the ‘Dot.Com Darlings’, sales across the internet reflect real dollars that weren’t spent in traditional ‘bricks and mortar’ locations. Retail sales on the internet either through ‘Dot.coms’ or ‘clicks and mortar’ operations, grew from $500M in 1995 to almost $8 billion just three years later. Online business to business sales, $45 billion in 1998, are expected to exceed $1.3 trillion by 2002.3

Pressure on company leaders to perform competitively and strategically continues to mount. In 1985, the number of worldwide mergers and acquisitions was 2,805. By 1997, it had increased over 700% to over 23,600 deals worth $1,612 billion.4

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The volume of publicly available information is massive and continues to grow. News releases, competitor websites, online databases and government documents (revealing patent and trademark filings, tax liabilities, labor contract provisions, property holdings, financial transactions and so on) are just a few types of information readily available to anyone with an internet connection, which is more than 50% of the U.S. population and growing.

New technologies for information management have become commonplace in most companies, with specialized systems devoted to customer relationship management, supply chain management, sales force automation and so forth. Chief Information Officers (a position common today but almost unheard of a decade ago) oversee not only computers and other hardware, but more important, how companies manage information assets to improve efficiency.

Competitive Affairs & CI, BI, KM, etc.: What’s the Difference? Trying to settle on clear definitions of each of the information management systems is like trying to get a roomful of economists or attorneys to all agree on anything. “On one hand, it means this… but on the OTHER hand, it also could mean that…” With apologies to experts in information management theory, the following descriptions reflect a small amount of guiding theory and a large degree of practical, real-world observation of the ways information is actually used within most organizations. First, the main definitions directly related to Competitive Affairs: Competitive Affairs: All activities inside an organization that require an understanding

of some aspect of the competitive environment. This can be top-level strategic decisions all the way to front-line tactical daily actions.

Competitive Environment: All things in the “outside” world which can impact an

organization’s ability to succeed. The most important elements “tie” to the organization, such as competitors, suppliers, large customer groups, regulators, etc., however, other factors can include economic trends, public opinion, industry issues, etc.


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Competitive Information: Data, information, word-on-the street rumors, etc. about any aspect of the competitive environment. For ease of use, also sometimes referred to as “competitor information.”

Competitive Intelligence: Competitive information that has been analyzed to reveal key

implications that matter to the organization. This can be strategic or tactical or both.

A word about CI: Some in the CI community argue that CI should only deal with “industry risk management” or informing executive-level strategies. The Society of Competitive Intelligence Professionals’ website (see Attachment 1 for contact information for any organization mentioned in this paper) characterizes CI as a disciplined system of primary research (e.g., often using person-to-person interviews to elicit information), analysis and dissemination of findings tailored to serve executives who need to make informed decisions to keep their company responsive, well-positioned, and profitable. Regardless of this debate among CI consultants, CI in the real world often involves taking an analytical approach to understanding one’s competitive environment and effectively applying what you learn to non-executive, tactical issues in Sales, Marketing and other areas. In that sense, CI is one important process within Competitive Affairs. Practically speaking, Competitive Affairs runs ‘top-to-bottom’ in an organization: from CI in the theoretical sense used by executives at the top making high-level forward-looking strategic decisions -- all the way through the company in any department that uses tactical information about specific competitive forces to make better decisions and take action every day. Beyond CI, Competitive Affairs also involves a wide range of targeted information about the competitive environment deliberately used by front-line Sales people, customer service reps, advertising designers, engineers, Marketing leaders, product managers, attorneys, purchasing directors, lobbyists, community relations specialists, labor negotiators, regulatory affairs staff and others. The “external” focus of Competitive Affairs is a distinguishing difference from Business Intelligence (BI). Typically, BI entails pulling together information and data from internal operational sources, such as labor tracking, finance and accounting systems, inventory management systems and others, to provide ‘dashboard’ updates for senior management. Using this internal information in a focused, summarized fashion to understand the status of key internal operational elements, managers can make better-informed decisions about internal operational issues. Another area is Knowledge Management or “KM. Essentially, KM proposes to organize all information assets in a company, past and present, to create a searchable storehouse of data resources that can be applied to virtually any decision a company wants to make. While KM is wonderful in theory, organizations are finding out that KM can be so generic that business people struggle with knowing exactly what to do with it on a daily basis. Most organizations still can’t clearly articulate the practical purpose of managing knowledge and have trouble tangibly linking KM systems back to specific ways it helps them meet strategic goals.5 While many business people might not be sure exactly what KM is used for in a day-to-day practical sense, they certainly understand that they need to know who they are up against in their competitive environment.


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Figure 3. Competitive Affairs Includes Aspects of CI, KM, BI and other Information Management Approaches

Most of the information about external forces such as competitors, major customers, suppliers, regulators, influential groups, public opinion, industry trends, etc. comes from public sources in the ‘outside’ world. Ideally, a company also draws from its own existing internal information systems that contain elements which, when added to information from external sources, become extremely useful for Competitive Affairs. For example:

Customer comments regarding competitors logged into a Customer Relationship Management (CRM) system

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Win-loss statistics regarding sales bids against competitors as reflected in Sales Force Automation (SFA) software

Pricing histories of key suppliers as documented by a Supply Chain Management (SCM) system

Other helpful documents located by a Knowledge Management (KM) system somewhere in the depths of the company’s computer files, and so on

Just as Competitive Affairs activities occur in nearly all departments, so does competitive environment information reside in just about all areas of the company. To deal with that, Competitor Information Management Systems (CIMS) designed for Competitive Affairs can provide value by pulling together external and internal information from a wide range of perspectives to create the most accurate picture of competitive landscape possible.


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When a CEO considers the competitor information needs of his or her entire company, there must be a recognition of ‘silos’ of information that likely exist in each department and rarely, if ever, get shared across or among departments (like grain silos standing tall and distinctly separate). When specialized software gets applied to a ‘silo’ of information, such as CRM or SFA or SCM, it can result in an ‘island of automation’ which may help

increase efficiency or effectiveness in a single department or function, but doesn’t necessarily provide value company-wide. In contrast, the most effective CIMS reaches into and across these ‘silos’ to gather and combine competitive environment information from all areas of the company. Using perspectives from a variety of departments and many different sources, the resulting picture painted by a CIMS is more textured, thorough and accurate. That allows all departments to benefit from the company’s combined knowledge about its external environment. Consider the example of the corporation that owns a well-known fast food chain, whose situation will undoubtedly sound familiar to many organizations. The company’s Business Intelligence (“BI”) team applies their expertise to analyze and compare information across a variety of internal sources. Located very near to this “BI” team is the Competitive Intelligence (“CI”) team, who tries to collect information on competitors and apply similar analyses. In a completely separate unit is a team of people who conduct market research. These three areas work separately gathering and analyzing their own “puzzle piece” of information, without a system to routinely share subsets of information that would be insightful and add value to work each function is doing to address their unique sets of questions and issues. Ideally, pulling this information together should be done without disrupting existing BI, CRM, SFA or other systems that likely work well to serve specific need(s) of a given department or team function. A “one-size-fits-all” approach to information management may serve everyone but rarely does it extremely well for anyone. Any attempt to gather and use information to service Competitive Affairs should regularly draw the most useful data out of each legacy system, then present competitive environment summaries or reports that are immediately useful for many departments.

Why Departments Need Competitive Environment Information It is not a revolutionary idea that competitive issues arise at nearly all levels in an organization. For so many organizations, however, much of the work that requires some understanding of one or more aspects of the competitive environment – identification of competitors, competitor products or services, competitor strategies, suppliers and their relationships with others, customers or prospects and what competitors are communicating to them, etc. -- has always been handled in an ad hoc manner. Consider the following examples of a few important functions for which effective use of competitive information is critical. Sales. Sales people are on the front lines, fighting the direct battle against competitors every day. In many ways, to stay current on what competitors are doing and offering to prospective customers, Sales people fend for themselves. Perhaps at an annual Sales Meeting they are given a hefty binder of information about competitors’ products or services. Even if the contents of the binder are current on the day of the big meeting, with the way things change, the binder is likely to be out-of-date within a month. It’s not clear how many Sales people take the time to thoroughly read the large volume of information, so the whole binder may sit unused. In many companies, the joke is that “Sales” thinks “Marketing” is out of touch because of the disconnect between what Sales people are up against every day and what appears to be Marketing’s more conceptual approach to understanding the competitive environment.


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A growing number of companies are beginning to give their prospective customers exactly what they want: a better way to compare an organization’s products and services

to its competitors. Nearly one third of Business to Business retailers selling products or services over the internet added a component that allows customer prospects to look up competitors’ pricing and do comparative shopping as a part of their own website services.6 Customer prospects want to know “Why should I buy from you instead of your competitor?” That’s the ‘grand prize question’ that Sales people must be able to answer. Rather than dodging the question, an effective Sales person needs to understand what the customer perceives as alternatives: “I could choose your service (or product), or your competitor’s, or something similar (substitute), or maybe skip it altogether.” In studying what separates the top grossing Sales people from others whose sales performance is average, Laurence Carr of Carr-Moreton Associates has found that very successful Sales people develop their own system of figuring out who their competitors are, knowing the relative strengths and weaknesses of products or services, and using those insights to win more sales. Armed with such information, top Sales people use ‘competitive selling skills.’ Product Managers. Being specifically responsible for the success of a given product or service line, few people are more in need of good competitor information than Product Managers. In determining appropriate positioning, it’s a matter not only of understanding the customers’ desires and perceptions, but also being very familiar with how the organization’s product or service attributes satisfy those needs. But how can one effectively differentiate a product or service without understanding the specific attributes of competitor products or services that prospective customers consider and might buy instead? If, in truth, the best product or service feature is not much different from what competitors offer, differentiation disappears. In this day and age, business purchasers and consumers are much more knowledgeable and demanding about their options. That attitude is only going to intensify as more people become internet- and information-savvy. ‘Walking in the customers’ shoes’ to understand their perspective requires a solid understanding of who the competitors are, what products or services they offer, what messages they are sending to the market, to which customer groups they are trying to appeal (target markets) and so on. Only then can a product manager ‘see’ and understand what the customer actually experiences when choosing which products or services to buy. CEOs and Executive Leaders. Presidents, others at the “C-Level” (CEO, COO, CIO, CFO, etc.) and Vice Presidents of companies are expected to regularly digest information from all angles -- business operations, economy, industry, trends, connections/relationships, etc. Ironically, newsfeeds, reports, and piles of data are abundant, yet nearly 90% of CEOs report that gathering competitive intelligence for decisions is a major problem.7 Like a person starving to death at a ‘banquet of ingredients,’ companies have access to a massive amount of data that largely goes unused because it isn’t put together in a format that makes the information easy to “consume” (i.e., brief, current reports that are relevant to that company’s strategies, goals, products, positioning, etc. and reveal insights that can be acted upon). As shown earlier in the KS&R study, most executives do not get the useful competitive environment information and intelligence they need to help with decision-making.


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The pace of change combined with so much information can lead to overload then resignation. “There’s not enough time to digest all the information that’s out there, so why try?” General information about the competitive environment may be interesting; however, to be useful, it must be sorted and analyzed to identify any relevance to a

company’s particular strategies or tactical challenges. In addition, trend information is only one piece of the competitive puzzle – strategic and tactical information about a company itself and its competitors can also reveal issues that provide tremendous insight. All should be used to feed good strategy and engage in ‘reality-based’ strategic planning. Bottom line: many company leaders do not get enough distilled, current and forward-looking competitor information to move their company nimbly with confidence. Many organizations have a handful of staff to deal with competitive questions for specific groups or departments (e.g., ‘market researchers’, ‘competitive intelligence analysts’, ‘compensation analysts’, ‘strategic planners’, ‘financial analysts’), but very few companies deliberately try to coordinate the full range of competitive environment information across the whole organization to create a more comprehensive understanding of the external environment and maximize the use (and value) of that information. One reason why this doesn’t happen is that Competitive Affairs is rarely a specific accountability area for any one person in an organization.

Ignoring Competitive Affairs Hurts The Bottom Line “We depend on the mutual incompetence of our competitors” is a sad but telling remark recently overhead at a large tradeshow. Perhaps for now, some companies who haven’t improved their Competitive Affairs activities can find comfort in knowing that they probably aren’t alone. And such companies pay the price, every day. In the Sales process, inattention to actively managing competitor information can increase the cost of sales and lead to price cutting – both of which reduce margins and eventually erode market share. Without clearly understanding which competitors are going after each market segment (and with which products or services), a company could spend a large amount of money trying to sell their product or service to the ‘wrong’ market. Pouring more money into advertising or other marketing promotions to sway that target market is unlikely to fix the problem. Compound that with Sales people resorting to price cutting because they’re under tremendous pressure to sell. Price cutting is inevitable when Sales people cannot clearly demonstrate that the value of their product or service justifies a price premium -- especially in comparison to what else is offered to that target market by competitors or substitute providers. Effective Research and Development efforts require diligence in trying to develop an understanding of the R&D activities of competitors or potential entrants. For example, understanding trends and other changes in the underlying technology upon which products are built (or services offered) helps to identify where the industry or specific competitors will likely be in one to five years. The resulting insights can have a radical impact on the strategic decisions made by R&D leaders or even daily tactical decisions made by product engineering or service design.


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Legal Departments, commonly responsible for protection of an organization’s intellectual property, files patents and trademarks to establish legal rights to ideas generated within their organization. In addition, patent attorneys and others must keep an eye out for new filings by competitors or potential entrants to the market, primarily to identify potential patent or trademark infringement. Growth in the field of Intellectual Property (patents, trademarks, etc.) creation and protection is evidence of the large number of companies beginning to take this issue more seriously. The more one knows about what’s going on in the competitive environment related to intellectual property, the better one can protect an organization’s patents and trademarks.

Strategy and planning is the most typical function where the value of deliberately assessing the competitive environment is understood and accepted. Even still, the variety of stories in the business section of a single daily newspaper reveals that still too many companies invest significant company resources, time and money in merger negotiations with what turns out to be the ‘wrong partner.’ Similarly, many institutional investors and venture capital firms are now paying the price for sinking large amounts of capital into start-ups and other companies that, in hindsight, appear to have had no understanding of their competitive environment nor a viable plan for how their products or services would be able to compete successfully over time. The ‘elephant’ in many board rooms is the fact that even top strategic decision-makers need a better way to fully understand their own competitive environment. Many other examples exist. As time goes on, fewer companies will have the luxury of depending on the mutual incompetence of their competitors. Ironically, being on the leading edge of managing Competitive Affairs sooner than later actually can create a new, distinct competitive and financial advantage for an organization.

Elements Needed to Deliberately Manage Competitive Affairs To manage Competitive Affairs effectively, a growing number of companies are putting in place appropriate staffing (and accountability), technology and other tools, and a process to manage data and other useful information about the competitive environment. Leadership and Staffing. Ask a Major League baseball coach whether he is responsible for creating a winning team and the answer will be an emphatic ‘Yes.’ That’s why he sends professional scouts out to observe, thoroughly understand, and provide ‘scouting reports’ on competitors. He makes sure his team members have current and useful information about the likely strategies and tactics of each specific team and individual players against whom they will be competing. Similarly, ask any CEO whether he or she is responsible for creating a competitively successful organization and the answer will be ‘Yes.’ Some top level executives have specialized ‘competitive intelligence’ staff to work on strategic analysis. However, that’s where the parallel seems to end. Too few companies have the business equivalent of a ‘professional scout’ -- an executive level person dedicated to and accountable for maximizing the company’s competitiveness at all strategic and tactical levels. Ultimately, the CEO is responsible for the company’s competitiveness, in addition to all other operations such as marketing, research, customer service, finance, HR, etc. For all of these functions, organizations have designated staff and, increasingly, specialized information systems that support these ‘silos’ of operational activity. Palm, Inc., is a clear cut example of a company that has put leadership and staff in place to manage company-wide Competitive Affairs. In recognizing their competitive battle against Microsoft in the hand-held computing market, Palm hired a Chief Competitive Officer responsible for changing the way Palm thinks about its competitors. Technology. Companies use specialized information systems and other dedicated technology in various departments to help improve efficiency and effectiveness. Most of these systems mirror traditional company functions and related information ‘silos’: sales force automation (SFA), customer relationship management (CRM), supply chain management (SCM), etc. Managing information about the competitive environment for


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use in Competitive Affairs is a largely untapped area of efficiency, using Competitor Information Management System (CIMS) technology. Capturing information in specialized ‘silos’ of technology is part of the reason why certain competitive-related information continues to be fragmented within companies. As an organization begins to be more deliberate about managing Competitive Affairs, one could adapt an existing information system created to address a distinctly different purpose. However, when using a specialized software system (e.g., CRM, SCM, SFA, etc.) to also try to understand the competitive environment, two problems typically occur:

(1) The risk of making critical decisions based on an incomplete understanding of the competitive environment is higher, because the insights are based on information that reflects only one perspective (e.g., Sales Department using their own ‘silo’ of information within SFA software or Purchasing and Distribution managers using information only from their SCM software, etc.). And,

(2) The entire company is denied the valuable insight that comes from having a comprehensive, multi-dimensional picture of their competitive environment (e.g., drawing key information from the Sales perspective, research gathered by Marketing, data compiled by Finance, analysis contributed by the Competitive Intelligence unit, insights from Customer Service and so on results in a more textured and thorough picture of the competitive environment).

Deliberately managing information for Competitive Affairs moves an organization to the preferred upper right quadrant, as illustrated below.

Figure 4. Using information across departments creates a more textured, complete picture

Systems with greater potential for company-wide use, such as Knowledge Management (KM) or Business Intelligence (BI), attempt to coordinate information across the functional silos; however, as addressed earlier in this paper, such systems are often so broad in scope that their purpose can be difficult to understand or the output is valued and used only by a select group of analysts or top executives.


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Business professionals are asking for specific Competitive Affairs tools. A recent survey indicated a significant pent-up demand, with nearly half of respondents reporting that they have ongoing competitive intelligence programs in place. Of those who have such a

program in place, over 80% also plan to develop or purchase additional tools to help them assess their competitive environment.8 When considering available technology to manage information about the competitive environment, Competitor Information Management Systems (CIMS) presents the best of all worlds: CIMS is similar to SFA, CRM and other types of technology that help an organization address a specific business purpose, and – like KM and BI – CIMS can span departmental ‘silos’ of information. Bottom line? CIMS technology cuts across departmental ‘silos’ and even across the external walls to draw from information sources throughout the inside and even from the outside the organization. CIMS is then able to serve focused reports to just about every department to meet their specific need to understand one or more aspects of the competitive environment. Collection and Use of Data. Competitive Affairs cuts across departmental ‘silos’ to combine information from many sources in ways that create more comprehensive pictures of ‘who or what the company is up against.’ Specific parts of this clearer understanding can then be directly applied to tactical and strategic decisions, department by department. The value rests on two elements:

(1) information combined from many sources and different perspectives builds a more accurate picture of what’s going on in the competitive environment; and,

(2) slices of that external picture are presented in clear ways that individuals or departments can see right away how to actually use the reports to help them achieve departmental or company-wide goals.

Typically as much as 80% of what a company needs to know about its competitive landscape is already within their ‘four walls.’ However, most business people are frustrated with how competitor information is managed. A survey of 4,500 leaders revealed that “Knowing what competitors are doing” is the top information management shortcoming of most organizations. Major deficiencies were also noted in reusing information and in giving people electronic access to key information.9

Figure 5. Survey by Korn Ferry International and USC Business School, Fall 2000

The concerns illustrated in Figure 5 are related: when a company implements a system to tap into competitive environment information already within its four walls, the overall understanding of competitors’ activities increases and is used to make more informed


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strategic and tactical decisions. It also is ‘found money’, because Competitive Affairs by its very nature maximizes the use and reuse (i.e., value) of information resources an organization has already paid for or purchases on an ongoing basis.

Return on Investment (ROI) from Competitive Affairs Competitive Affairs has many potential angles and purposes, depending on the organization’s structure, the nature of the industry, and the specific department or function putting the competitive environment information to work. Here are just a few ROI examples associated with taking a more deliberate approach to Competitive Affairs. Increase Revenue by Making More Sales. In 1999, Siemens invested $7.8 million in a CIMS to help their telecommunications Sales people share competitive environment information around the globe.10 In just two years, Siemens’ Competitive Affairs initiative yielded an increase of $122M in Sales, primarily due to the new ability for Sales people to access information that others in the company have learned about competitors, key customers and prospects and other aspects of their competitive environment. For example, Siemens Sales staff in Malaysia landed a $3 million contract to build a pilot broadband network, even though the local salespeople didn’t have enough expertise to put together a proposal. Using the CIMS, they drew from information provided by another Siemens Sales team in Denmark and won the contract. Increase Revenue, On A Per Sale Basis. Siemens Sales people now use information about their competitors to win contracts based on value rather than price cutting. For example, using information from the CIMS about a competitor’s product, Siemens won a $460K hospital contract with a bid 30% higher than the competitor. Siemens Sales people had access to technical data that proved that Siemens’ product would be substantially more reliable than the competitor’s. Understanding the importance of Competitive Affairs then using information about their competitor’s product, they priced their own bid substantially higher than the competitor and were awarded the contract. Based on increased Sales alone during the first two years, Siemens’ Competitive Affairs efforts (i.e., purchase and use of the CIMS) resulted in increased annual revenues that were seven times more than what they spent to put the system in place. During that timeframe, they recouped over fourteen times their original investment. Reduce Cost and Increase Efficiency of Research. Organizations typically have several researchers or analysts in different locations who probably don’t coordinate research efforts or share key information. Considering the volume of purchased research (primary and secondary), information services such as Lexis-Nexis or Hoovers, books, subscriptions, etc. that many departments build into their budgets, the potential for cost savings is tremendous. Using a centralized CIMS to give several research teams access to organized competitive information will cut back on staff time spent on doing research from scratch or sifting through old reports to find relevant nuggets of information. For example, a conservative estimate is to assume that research staff using a CIMS would save an hour per day on average and, over the course of a year (48 weeks), the value of time (estimated $35/hour) would create efficiencies equal to a fulltime research position. Ten researchers using a CIMS could save $84,000 per year in research time alone.


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Reduce Customer Attrition. Competitive Affairs information can be used to give Customer Service staff and others who interact with customers (e.g., account managers, agents, brokers, distributors) access to the latest information about the organization’s and competitor’s products and services. This equips front-line staff with the ability to

better respond to customer needs regarding product or service attributes, upgrades or options to fit their personal situation. For example, in a company that sells products where the average revenue per product $45 and the monthly customer attrition is about 20,000, if front-line staff reduce monthly customer attrition by just 1% by using focused Competitive Affairs information on the job, the ROI for reducing customer attrition alone would be $108,000 each year.

How Competitive Affairs Works Within Organizations For Competitive Affairs to be effective, an organization’s leader must commit to sharing and using competitor information more effectively across the organization or a subsidiary or division. Because this impacts organizational culture, job responsibilities and expectations for day-to-day activity, deliberate Competitive Affairs is an ongoing process that requires ongoing resources and attention. Most organizations can be split into two groups: people skilled at finding and compiling good data, and people who need useful information to do their jobs well. Market analysts, researchers, corporate librarians, competitive intelligence staff and others in similar roles are best suited for finding, prioritizing, organizing and distributing useful competitor information. In contrast, people on the front lines of Sales, Marketing, Product management, CI analysis, Executives, Purchasing, Labor Relations, Government Affairs and other roles can get immediate value out of brief, up-to-date reports on competitors, product or service comparisons, competitors’ target markets, influential people or groups, supplier profiles, contract comparisons and so on.

Figure 6: Common Competitive Affairs Questions

Every “front line” group or department typically has exposure to certain competitive environment information. Capturing the bits of data or other information through a feedback process can help ‘round out’ a company’s perspective on its environment. For example, an email or voicemail hotline system can be used by Sales people, customer service representatives, executives and others to contribute rumors or other insights that they might come across in the course of their daily work.

Feedback mechanisms are a great way to capture and validate ‘soft’ information or rumors to eventually confirm or dismiss them, or even uncover useful gems that might lead to scooping a competitor.


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The people who are the ‘end-users’ of CIMS can use practical reports designed to meet their specific needs. Ideally, such competitive environment information reports should be available around the clock for authorized employees to tap into exactly when they need it – not before and not after. Effective reports should be short and current so they’ll actually be read and used. Two pages of focused information using bullet points, easy-to-read graphs and a lot of white space are about as much as most busy business people have time or patience to digest these days. Widely available technology, such as relational databases, make it relatively easy to pull information together from many sources and present multi-dimensional yet focused reports relevant to specific tactical or strategic decisions made by people at different levels in a company. These CIMS allow information to be combined from several departments, databases and other areas. This also enables the reuse of information for multiple purposes, squeezing greater value out of money that’s already been spent to buy data and print publications, to conduct primary research, to access online information services, to gather materials at tradeshows and conferences, and so on. Using the right mix of tools and approaches, a handful of people can make a big difference in the competitiveness of an entire company. It takes relatively few people to regularly compile and organize competitor information to meet a variety of identified, practical needs that impact an organization’s bottom line. The work of a small group can benefit a large number of individuals who have an ongoing need for distilled competitive information specifically targeted at what they need to accomplish each day on the job.

A Practical Guide to Get Started To implement a deliberate approach to Competitive Affairs, many organizations start by reviewing their competitive situation, goals and strategies, then choosing a specific department (e.g., Sales), agency or line of business as a starting place. Regardless, there are several issues to consider when embarking on the road to effective management of competitive environment information:

Accountability. Assign specific accountability for the organization’s Competitive Affairs to someone at a level high enough to have an impact. If ‘everyone’ is responsible for your competitiveness, then, in reality, no one is accountable for it.

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Forces. Identify the main competitive environment forces that have a direct impact on the success of the organization or department or business line.

End-Users. Identify who is expected to use this competitive environment information on a daily basis to be more effective on the job. Provide this larger group with training so they can easily access, understand and use CIMS reports.

Analysts. Identify the smaller group of people who are responsible for collecting, organizing, analyzing and disseminating competitive environment information. Provide training to ensure that they use the CIMS to capture the most important data and weed out all that is trivial, irrelevant or not useful to ‘end-users.’

Information. Identify the primary sets of competitive environment information that would be the most useful. For example, Sales people need comparisons of competitors’ products or services relative to their own products or services. Assess information sources already within the four walls of the organization and focus on getting greater use (value) from that before purchasing additional data.


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Technology. Acquire and install a CIMS to ensure that information collection, organization and reporting is as easy as technically possible, while still giving the organization the ability to customize the information so it remains relevant to what specific departments or business lines need to be competitive. Use a CIMS that quickly compiles relevant information into useful reports, ideally so that the reports are available to end-users round-the-clock on a ‘serve yourself’ basis.

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Training. Identify who will communicate the organization’s commitment to information-sharing to increase competitive success, answer questions and provide training on how to use competitive environment information in particular jobs. While some people intuitively know how to use such information, most need to be shown how it can help them be more effective on the job.

Communication. Establish easy ways for people throughout the organization to contribute information about any aspect of the competitive environment that they come across which might be appropriate to include in the CIMS.

Incentives. Create rewards, recognition and other incentives to draw information from, and contribute to, the system. Siemens provides bonuses if managers use the CIMS to increase sales, but only if they’ve contributed to it. Nacco Materials Handling Group, Inc., offers similar rewards to their Dealer Salespeople.

ROI. Document where the organization was when Competitive Affairs began to be a more deliberate effort and monitor changes over time. Ask for feedback from ‘end-users’ then modify the approach to continually improve effectiveness.

The Market Is Responding to Serve Competitive Affairs Needs The trend to be more deliberate about managing Competitive Affairs should be no surprise to business leaders who stay current on hot topics. Businesses, associations and other organizations are all increasing efforts to develop better ways to track and understand their competitive environment -- then use that understanding to succeed in achieving one or more specific goals. Media Coverage. Newspaper and magazine stories highlighting Competitive Affairs exploits are becoming more common. A recent prominent example, described on the front page of the Wall Street Journal, was the story of one skirmish in the battle between Palm and Microsoft over the handheld personal digital assistant market.11 When Microsoft introduced their Pocket PC, Palm was ready with an overall plan to thwart Microsoft’s attempts to take market share away from the Palm Pilot. Palm’s ‘Chief Competitive Officer’ mobilized company leaders, marketing promotions efforts, sales people and distributors to conduct a full scale competitive assault on Microsoft. This Competitive Affairs effort was a clear victory: initial sales of the Pocket PC were slower than predicted by analysts. Despite Microsoft’s massive promotional campaign, Palm outsold Microsoft’s Pocket PC overwhelmingly. The need for a company to understand its competitive market continues to get significant coverage in the media, with recent ‘lead’ stories on television’s 20/20, and in Business Week, the Industry Standard, the Wall Street Journal, FastCompany, CIO Magazine, Business 2.0, Strategic Finance, and many others. Associations. While there is no professional association specifically devoted to Competitive Affairs, the Society of Competitive Intelligence Professionals (SCIP), the


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American Marketing Association (AMA) and other organizations are addressing the growing interest in honing various aspects of Competitive Affairs skills. The following examples are just a few of the many organizations who have, or are planning to, incorporate Competitive Affairs into meetings, conferences, presentations and so forth over the course of less than a one year time span (mid-2001 to mid-2002):

Society of Competitive Intelligence Professionals annual international conference is about “CI Gets Real: Competitive Success at all Levels” focusing on how “competitive intelligence know-how is applied to the specific functions of various departments within the firm.”

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American Marketing Association is holding a conference on Competitive Affairs in early 2002 and plans to add more information on Competitive Affairs on their new MarketingPower.com portal website.

National Association of Dental Plans annual conference on “21st Century Thinking” has the keynote speaker addressing Competitive Intelligence, with the rest of the meeting playing out related issues affecting ‘operations’, ‘government affairs’ and ‘sales and marketing.’

American Society of Association Executives is holding meetings on “how to infiltrate competitive terrain with strategies that work”, in addition to training on ‘comparing your association to others’, ‘approaching global markets’, and ‘how to know what your members know’ -- all elements of Competitive Affairs.

Special Libraries Association annual conference topic is “Seizing the Competitive Advantage” with workshops such as “Gleaning Competitive Product and Strategic Information from Traditional Engineering Documents.”

Knowledge Management World 2001 conference features sessions on how to capture, manage and access content and business know-how for competitive advantage.

Local chapters of the AMA, the American Production and Inventory Control Society (APICS) and the American Society for Information Science and Technology (ASIST) have all recently held meetings to explore Competitive Affairs related topics as well. Specialized Services and Products. Recognizing the growing interest, specialized product and service providers are responding. An increasing number of consulting, dedicated software and other products and services are coming on the market to help organizations address Competitive Affairs needs. A few of the consultants with established practices and known expertise in the field include Carr Moreton Associates, Fuld & Company, Technology/Engineering Management Inc., the Business Intelligence Source Inc. and the Phoenix Consulting Group (contact information is in Attachment 1). New, focused technology and related infrastructure is also appearing for the Competitive Affairs market, with a practical focus on serving companies’ real needs. For intelligence and data storage software and related devices alone, the market is currently estimated to be about $148 billion.12 One example among many was recently described in The Industry Standard. The business person called their CIMS an important tool because it "allows us to house the hard facts we collect about our competitors, and then crunch reports that show all kinds of not-so-obvious relationships about them."13


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Significant Market Opportunity That Is Largely Untapped. The return on investment from deliberately improving Competitive Affairs activities constitutes one of the most promising, largely untapped business productivity markets of the next decade. Plain and

simple: Competitive Affairs addresses real-world needs that business professionals in a wide variety of departments and functions face on a daily basis. Thankfully, practical systems with a clearly focused purpose to support specific Competitive Affairs activities are a far cry from so many other business technologies. Nearly every business person has heard at least one convoluted description of a new product that promises to do something like ‘create collaborative workspace solutions that integrate with existing information technology infrastructures to build institutional knowledge to achieve a learning organization.’ (Say what?!?) For vendors, consultants and others searching for emerging markets that have great potential for revenue-building, Competitive Affairs is worth considering. Here are just a few of the services and products that can be developed to serve Competitive Affairs:

• Assist an organization in prioritizing and focusing on the most important aspects of their competitive environment that will help them achieve goals based on its unique strategies and market position

• Provide advice on specific Competitive Affairs tactics to improve Marketing effectiveness and increase Sales revenue

• Plan for deployment of competitor information management systems

• Gather specific information, assist with the creation of competitive environment information reports and targeted competitive intelligence

• Create and maintain Competitive Affairs databases for individual organizational customers or for groups of organizational customers within a specific industry

• Train key departments and staff on how to use specific competitor information for maximum impact on the job each and every day

For business consultants, information product developers and those in the information service industry, Competitive Affairs presents a significant, new growth opportunity.

Competitive Affairs is The Logical Next Step in Productivity In summary, the bottom line is clear: Increase Marketing effectiveness. Increase Sales revenue while reducing cost of sales. Ensure a ‘first to market’ position for new technologies. Prevent theft of the company’s intellectual property. Focus time and resources on strategies that take advantage of real opportunities in the market. Capture the full value of the company’s information assets (use and reuse it in many forms to its fullest). Create a history of ‘knowledge’ in the company about the competitive environment that won’t disappear if one or more key employees leave the company. Evidence of Competitive Affairs activities is everywhere. Traditional Market researchers are now seeing the need to paint a conceptual map relative to competitors, and then apply that information in very specific, tactical ways. This is becoming apparent even to the general consumer, who doesn’t need to look far to see Competitive Affairs coming into play: Westin Hotels includes a question about competitors on the customer comment card

given to every guest as a part of the check-out process.


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The Tourism Board of Whistler Ski Resort in Canada compiles information about competitor resort destinations and provides competitor reports to every property owner in the town of Whistler, B.C. In one issue of E-Week magazine alone, three separate advertising campaigns

featured competitive selling techniques that highlight in detail how their product is superior on key features when compared to specifically identified competitors’ products:

Sun Microsystems Netra X1 server MicroStrategy Xerox Phaser 2135 color printer

Television commercials for Progressive Auto Insurance promise to quote competitors’ rates over the phone, in addition to quoting their own rates for anyone who calls.

There is no doubt that business leaders understand the importance of being competitive. Historically, most companies have left it to different departments or staff members to figure out on their own how to handle the challenge of understanding their competitive environment and then use that insight to create a competitive advantage in their own work, their department’s focus or for the company as a whole. The advent of Competitive Affairs as a distinct, deliberate function is the logical next step in the ongoing evolution of the activities of organizations working to succeed in competitive environments.


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Attachment 1: Sources

Sources: 1. Survey conducted by Accenture and The Conference Board, 1st quarter of 2001. 2. Securities Data Company, as cited in Understanding edited by Richard Saul Wurman

(TED Conferences, Inc. Publications, 2000). 3. United States Department of Commerce, as cited in Understanding edited by

Richard Saul Wurman (TED Conferences, Inc. Publications, 2000). 4. Securities Data Company, as cited in Understanding edited by Richard Saul Wurman

(TED Conferences, Inc. Publications, 2000). 5. International Data Corporation survey in 2000, as cited in eCommerce B2B report

(published June 2001 by eMarketer.com). 6. Survey conducted by Knowledge Systems & Research, Inc., November 2000. 7. Study conducted by PriceWaterhouse Coopers, 2000. 8. Survey conducted by Fuld & Company, June 2001. 9. Survey by Korn Ferry International and USC Business School, Fall 2000. 10. “Sharing the Wealth” BusinessWeek Online, March 19, 2001. 11. “Palm Puts Up Its Fists As Microsoft Attacks the Hand-Held PC Market” Wall Street

Journal, August 8, 2000. 12. Intelligence and Data Warehouse Market Survey, Survey.Com, November 30, 1999 13. “Getting the Dirt: Find Out What Rival Companies Are Up To” The Industry Standard,

June 2000. Description of STRATEGY! Enterprise CIMS sold by Strategy Software.

How to Contact Organizations Mentioned In This Paper: American Marketing Association: www.ama.org American Production and Inventory Control Society: www.apics.org American Society for Information Science and Technology: www.asis.org American Society of Association Executives: www.asaenet.org Business Intelligence Source: www.thebisource.com Carr-Moreton Associates Consulting: www.moreton.com Fuld & Company: www.fuld.com Knowledge Management World: www.kmworld.com National Association of Dental Plans: www.nadp.org Phoenix Consulting Group: www.intellpros.com Society of Competitive Intelligence Professionals: www.scip.org Special Libraries Association: www.sla.org Strategy Software: www.strategy-software.com


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Technology/Engineering Management, Inc.: www.temi.com

http://www.ama.org/

http://www.apics.org/

http://www.asis.org/

http://www.asaenet.org/

http://www.thebisource.com/

http://www.moreton.com/

http://www.fuld.com/

http://www.kmworld.com/

http://www.nadp.org/

http://www.intellpros.com/

http://www.scip.org/

http://www.sla.org/

http://www.strategy-software.com/

http://www.temi.com/

Attachment 2, CA Issues by Department

COMMON COMPETITIVE AFFAIRS ISSUES, BY DEPARTMENT Every day, people in many departments engage in activities that require some level of understanding their competitive environment. The following are just a few examples... Executive Leadership

• Corporate Planning and Strategy: How do you monitor and understand the key elements of your competitive market (competitors, major customers, suppliers, potential entrants, substitute providers, partners, government regulators, unions, and all other groups that can have a clear influence on the success of your company)? What aspects of each of these groups are evaluated regularly and how is that information factored into strategic planning?

• Organizational Core Competencies: What are the most important organizational capabilities critical to the success of your company in the competitive market? What are your company’s strengths and weaknesses in each, compared to your main competitors strengths and weaknesses in each?

• Effective Management. How do you gather and communicate information to align employees’ vision and activities to reach organizational goals? How do you retain knowledge in your organization, including getting the most value out of it and ensuring that knowledge held by key employees isn’t lost when they leave the company? Do you have mechanisms to help you get a better understanding of what employees ‘see’ and ‘do’ every day and how your organization is doing on the tactical front-line?

• Other Issues: see the following lists to discover a range of competitive affairs issues of interest. Marketing

• SWOT Analysis for Marketing Strategy: What are the strengths, weaknesses, opportunities and threats for your competitors and how do the situation(s) of your competitors impact your own marketing strategy?

• Identifying Target Markets: What target markets are your competitors pursuing for specific products or services (e.g., learn this by evaluating their use of certain promotional venues, advertising placement and messages, etc.)? Which target markets appear to be saturated and which ones present an opportunity for you?

• Differentiation for Company, Product and Service Branding: How is your company distinctly different from your competitors? Are you using this actual differentiation in your company’s branding efforts? What products or services compete with yours and how are they distinctly different? Does this real difference matter to your customers and, if so, are you taking advantage of that distinction?

• Sales Support: What products or services compete with yours? How are your Sales people using this information with prospects to engage in competitive sales and emphasize strengths of your products/services and competitors’ weaknesses?

• Marketing Communications: What messages do your prospective customers see daily that influence their opinion of your company (from competitors, industry issues, media coverage, etc.) and affect the believability of your own MarCom messages? How could your messages be modified to be more effective?

• Word of Mouth Marketing via Employees: Are your employees given sufficient information so they become informal promoters of why your products or services are better than your competitors? This will also help them become unofficial spokespeople (over the backyard fence, at baseball games and dinner parties, etc.) to make the best use of ‘word of mouth’ opportunities to promote your company.

Sales

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• “Why should I buy from you and not your competitor?” Do Sales people have useful information to effectively answer this question asked by information-savvy customers (business and consumer)? Do Sales people use competitive selling techniques, proven to be the most effective ways to sell?


• Increase Sales Effectiveness: Do Sales people know which specific products or services compete directly with yours? Are they on their own to try to stay current (versus receiving a large Sales binder twice a year)? How are Sales people using this information with prospects to engage in competitive selling that emphasizes strengths of your products or services and competitor weaknesses?

• Planting and Navigating Sales Landmines: Based on what you know about your competitors’ product or service weaknesses (features, pricing, shipping delays, return rates, customer complaints, etc.), do your Sales people frequently plant ‘landmines’ when talking with prospective customers to sway the sale in your direction? Based on what you know about your own product or service weaknesses relative to your competitors, do Sales people have good answers in hand to respond to ‘landmines’ planted by a competitor?

• Reduce the Cost of Sales: Based on knowledge of your product or services strengths and weaknesses relative to competitors’, and combined with an understanding of the preferences of prospects, which customers are most likely to buy your products or services? Do Sales people have a way to know when not to waste time and money going after business that they aren’t likely to win?

Product Development (and R&D)

• Trends Inside (& Outside) the Industry: What areas of research and product or service development are your competitors or potential market entrants involved in? How will this likely affect a variety of areas such as the strength of company strategies (yours and theirs), mix of products or services, customer reaction (or public opinion), potential target markets, etc.?

• Developing Distinct Products or Services: What products or services are offered in the market now that your customer prospects see as direct alternatives to your product or service (competitors and substitutes)? What customer needs or desires are not being met by any of these and how can you use this as a product development opportunity for creating clear differentiation and a distinct competitive advantage?

• Being First to Market: What products or services are being developed by your competitors or potential entrants to your market? Are they threats to your ability to get the financial and competitive advantages from being ‘first to market’ with your own newly developed products or services?

• Protection of Intellectual Property: How are you deliberately tracking your competitors or potential entrants in your market who may be infringing on your company’s patents, trademarks or other intellectual assets?

Community Leadership and Influence (Public Affairs, Investor Relations, Public Relations, Community Relations, Government Affairs, etc.)

• Know Your Community Audience: To ensure that external communications and related strategic planning is effective, do you know who primary decision-making groups or influential individuals in the ‘community’ are (at all levels important to your company)? Do you keep on top of basic information about them: the key players in each group, their agenda and hot buttons, their allies and opponents, common interests do you share with them, where you disagree, etc.

• Relationship Management: How does your company ensure that it has good working relationships with influential groups or individuals at every level important to your company (local, state, national, international)? How do you manage these relationships to ensure that when there is staff turnover, your company doesn’t lose these connections, ‘institutional memory’ and key community information?

• Right Hand Knows What the Left Hand is Doing: How is community-based information (about public trends, influential groups, key people, ‘history’ of certain issues, political and public sensitivities, etc.) collected and shared among leaders and staff in a variety of departments inside your company to maximize your company’s ability to assess effectiveness in using one consistent voice in all external communication (media, mailers, courtroom, state capitol, professional gatherings, community events, etc.)?

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Purchasing

• Supplier Contracting. What do you know about key suppliers to your company (other companies they supply, cost structures, pricing flexibility, production times, personalities of key negotiators, turn around times, professional knowledge, customization, responsiveness, customer service availability, reliability, credibility, location, contract requirements, etc.)? How do the specific attributes of products and services of key suppliers compare to each other? Are you using that information to strengthen your negotiating position and overall strategic management of key supplier relationships?

• Effective Supply Chain Management. What other suppliers are available in your market that present either opportunities or threats to your effective supply chain management? Which suppliers are working with your competitors and under what arrangements? Do those arrangements with your competitors give your competitors a competitive advantage that your company must overcome?

Finance and Legal

• Due Diligence for Mergers, Alliances, Acquisitions, etc: How does your company gather and use internal and external information about potential partners to determine whether they are a good fit with your company’s strategies and goals? What questions are asked about these companies in your competitive market? Where are the answers most likely found? What are the most common challenges, pitfalls, blind sides, etc., in the due diligence process and how does your company manage them?

• Risk Management: What are the external trends and issues that pose potential risk to your company, products or services? What competitive market forces (competitors, government regulators, unions, activist groups, suppliers, etc.) are likely to have the greatest impact on your industry and your company? How does your company regularly track these groups or forces then deliberately factor information from their activities into your risk management strategies and tactics?

• Legal Actions and Impact on Your Company. When your company goes to court or participates in other legal proceedings (aspects of which are often open to the public), how does your legal team routinely factor into their impact analysis an assessment of how key groups in the external competitive market could react (either in harmful or helpful ways to your company)? How is this competitive market information factored into your company’s legal strategies?

Human Resources

• Employee Orientation: How do you get new employees ‘up to speed’ about the products, services, divisions, locations and other aspects of your own organization so they understand their role in the ‘big picture’ of what your company is ‘up against’ and trying to accomplish? Do employees understand the difference between ‘public’ information and company information that should not be given out because of its competitive or proprietary nature?

• Hiring and Retaining Good People: How do you ensure that the benefits and salaries that your company offers are attractive when compared to your ‘competitors’ (either others in your industry or other organizations that are trying to hire from the same local labor pool)? Are you using information about ‘your strengths’ and ‘their weaknesses’ to strengthen your negotiating position and reduce the time lag to hire the top candidates?

• Labor Relations. What do you know about the unions that have organized your employees (size, other companies and industries they’ve organized, hot buttons, top priorities, weak spots, underlying agendas, personalities of key negotiators, likely strategies and tactics, key community allies for you and/or for the union, etc.) and are you using that information to strengthen your negotiating position and overall strategic management of labor issues?

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Attachment 3: About the Authors

About the Authors

George Durtler. Mr. Durtler has been the CEO of three companies, Chief Technical Officer, GM, and Sales and Marketing manager primarily in the technology industry, spanning the United States, Canada and Europe. Building on his own experience, he continually evolves his real-world understanding of how organizations manage a wide array of information so they can develop a practical picture of their own competitive environment for use in strategy, sales, marketing, purchasing and other key functions. Mr. Durtler currently focuses on developing leading edge technology that businesses, government agencies and other organizations around the globe use to improve their approach to Competitive Affairs. A graduate of Concordia University, he is a member of the Society of Competitive Intelligence Professionals and regularly speaks to business audiences regarding effective Competitive Affairs. Mr. Durtler can be reached at [email protected]

Diane Giese. Ms. Giese has used competitive environment information throughout her career, as a manager, an ‘analyst’ and an ‘end-user.’ With fifteen years of both ‘front-line’ and leadership experience in Government Affairs, Marketing and Strategic Communications (including crisis management and labor relations), she understands first-hand the critical nature and practical value of effective Competitive Affairs. Ms. Giese has managed Competitive Affairs-related activities for a school district, a health insurance company and a multi-billion dollar, multi-state non-profit health system. She has a Masters from Harvard University in Public Policy, Business/Government Relations. She is President-elect of the American Marketing Association Puget Sound Chapter and active in the Society of Competitive Intelligence Professionals. Ms. Giese is an award-winning public speaker who has addressed a wide range of business, government and non-profit groups. Ms. Giese can be reached at [email protected]

Matthew Kelly. Mr. Kelly works closely with leaders, competitive intelligence professionals, researchers and others in companies, government agencies, consulting firms and other organizations to help them determine the best way to manage Competitive Affairs. His experience in the technology industry, his military training and his keen sense of human nature form the basis of Mr. Kelly’s business acumen. He has lead many successful business development efforts, in addition to being a top sales person and corporate instructor. After graduating from the U.S. Coast Guard Academy with a degree in electrical engineering, Mr. Kelly spent several years in the Coast Guard before going into private business. He is a member of the Society of Competitive Intelligence Professionals and the American Marketing Association. He has recently spoken at several conferences on various aspects of Competitive Affairs. Mr. Kelly can be reached at [email protected]

In addition to collaborating on this white paper, Mr. Durtler, Ms. Giese and Mr. Kelly currently participate on the leadership team of Strategy Software. www.strategy-software.com

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