SAWIS CI PRESENTATION 310511

OVERVIEW OF

COMPETITIVE INTELLIGENCE

Sawis Information Centre Open daySawis Information Centre Open day

31 May 2011

COMPETITIVE INTELLIGENCE

Sawis Information Centre Open daySawis Information Centre Open day

… the collection of factors, policies and institutions which

determine the level of productivity of a country /

industry / company and that therefore determine the

Competitiveness defined


level of prosperity that can be attained by an entity

(IMD, 2005)

… the collection of factors, policies and institutions which

determine the level of productivity of a country /




level of prosperity that can be attained by an entity

(IMD, 2005)


‘(Wine) industries and firms are competitive when they are able to continue to deliver products at qualities and prices as good or better than their competitors; and they are able to attract sufficient sources of capital, land, labour, technology and management from other

competing economic activities i.e. the ability to continue competing economic activities i.e. the ability to continue to trade wine in a competitive environment.’


‘(Wine) industries and firms are competitive when they are able to continue to deliver products at qualities and prices as good or better than their competitors; and they are able to attract sufficient sources of capital, land, labour, technology and management from other

competing economic activities i.e. the ability to continue competing economic activities i.e. the ability to continue to trade wine in a competitive environment.’

South Africa’s Wine Industry’s competitiveness

Certain realities impact:

1. Overall the global environment remains competitive concentration is highconcentration is high

2. The exchange rate (current strong Rand)

3. Slowing / changing global supply and demand

4. High input costs…

South Africa’s Wine Industry’s

Overall the global environment remains competitive –

The exchange rate (current strong Rand)

Slowing / changing global supply and demand

• Concepts and definitions

• Origin and uses

What is CI?

• Process and deliverables

Concepts and definitions

Origin and uses

Process and deliverables


• A systematic and ethicalanalysing, and managing externalaffect your company's plans,(SCIP)

• A strategic tool that enablesimprove competitivenessforces and anticipate futureforces and anticipate futureKahaner)

• A continuous, systematicproduces knowledge andoperating environment, toidentify prevailing marketopportunities and threats (J


ethical program for gathering,external information that can

plans, decisions, and operations

enables senior management toby identifying key driving

future market directions (Larryfuture market directions (Larry

company-wide process thatinsights about a company’s

to enable decision-makers tomarket trends and to anticipate

(J Calof)

Key words in all definitions of CI

continuous

company

systematic process

actionable


actionable

legal and ethical

knowledge and insight

strategic management tool

foreknowledge

early warning

Key words in all definitions of CI

continuous

company-wide

systematic process

actionable


actionable

legal and ethical

knowledge and insight

strategic management tool

foreknowledge

early warning


What CI is NOT

• NOT spying, stealing or bugging

• NO easy activity, or magic wand to all answers

• NO substitute for normal business processes

• NO isolated activity conducted by a few

• NOT effective without a competitive culture

• NO sideshow to business planning and operational processes


What CI is NOT

NOT spying, stealing or bugging

NO easy activity, or magic wand to all answers

NO substitute for normal business processes

NO isolated activity conducted by a few

NOT effective without a competitive culture

NO sideshow to business planning and

Wall street Journal 7 July 2006Wall street Journal 7 July 2006

Pepsi Alerted Coca-Cola to Stolen-Coke-Secrets Offer Thursday, July 06, 2006Foxnews.com

Trade secret plot pulls Coke, Pepsi togetherFriday, July 07, 2006Post-Gazette.com

A sting uncovered an alleged A sting uncovered an alleged scheme to sell secret Coca-Cola information to rival Pepsi for $1.5 million.

Origin of CIOrigin of CI

Origin of CI

• In 1966 William Fair proposed formation of a corporate

“Central Intelligence Agency” within firms that would

focus on the activities of collecting and disseminating

information

• CI as a process has long been proposed as an effort to

increase a firm’s competitiveness (various literatures)

• Now CI has grown to become an established business

construct, with delineated job functions directly

responsible for collecting, analysing and disseminating

information on more than just competitors

In 1966 William Fair proposed formation of a corporate

“Central Intelligence Agency” within firms that would

focus on the activities of collecting and disseminating

CI as a process has long been proposed as an effort to

increase a firm’s competitiveness (various literatures)

Now CI has grown to become an established business

construct, with delineated job functions directly

responsible for collecting, analysing and disseminating

information on more than just competitors

CI in SA

• CI has been around some time

in all industries

• In South Africa

– Development coincided

global market

– Companies could no longer– Companies could no longer

– Foreign competitors entered

scene

time – all companies of all sizes

with SA’s re-entry into the

longer just compete locallylonger just compete locally

entered to change local competitive

CI globally

• All industries – esp. fast-movers (technology, finance, manufacturing)

• Global – esp. USA, Japan, Sweden, France, Germany, Australia, Canada, China, Israel

• Companies large and small

• Increasing use of CI - competition, open markets, trade • Increasing use of CI - competition, open markets, trade regulations, global competitors

• No single model - tailored approach

• Organic growth – starting small

movers (technology, finance,

esp. USA, Japan, Sweden, France, Germany, Australia, Canada, China, Israel

competition, open markets, trade competition, open markets, trade regulations, global competitors

tailored approach

starting small

Stories of business failures

• Think of Iscor and the meltdown of the Asian Tigers in the

late 1990’s

• Think of emerging China and the effect on the local textile

industry

• 1960’s car makers of Detroit famously said:

worry about it, those little cars aren't what Americans want worry about it, those little cars aren't what Americans want

to buy"

• Eastman Kodak and Polaroid fail

beginning of the consumer digital camera revolution

Stories of business failures

Think of Iscor and the meltdown of the Asian Tigers in the

Think of emerging China and the effect on the local textile

1960’s car makers of Detroit famously said: "Let's not

worry about it, those little cars aren't what Americans want worry about it, those little cars aren't what Americans want

Eastman Kodak and Polaroid failed to adjust to the

beginning of the consumer digital camera revolution

Betamax, the flying bank & Ford

Why CI?Why CI?

MISSINGMISSINGOPPORTUNITIESOPPORTUNITIES

NOT SEEINGNOT SEEINGTHE GREATERTHE GREATER

Intelligence needed to reduce risksIntelligence needed to reduce risks

Why CI

Constantly scanning the greater picture in search of opportunities and threats

NOT SEEINGNOT SEEINGTHE GREATERTHE GREATER

PICTUREPICTURE

OVERLOOKINGOVERLOOKINGTHREATSTHREATS

Intelligence needed to reduce risksIntelligence needed to reduce risks

Constantly scanning the greater picture in search of opportunities and threats

Why CI?

• Need for faster and accurate decisions

• An ever-increasing availability of information but less

intelligence

• Competition fiercer than ever before

• No time for business failures

• Competitive environment full of opportunities and dangers

(new competitors, M&A’s, technology, etc.)

• Knowledge is the competitive advantage

• What CI capacity do your competitors have?

Need for faster and accurate decisions

increasing availability of information but less

Competition fiercer than ever before

No time for business failures

Competitive environment full of opportunities and dangers

(new competitors, M&A’s, technology, etc.)

Knowledge is the competitive advantage

What CI capacity do your competitors have?

Why CI?

“We need a better, more complete interpreted information

picture. I believe companies that don’t do this, and don’t

do this well, won’t succeed

issue.”

President of Kellogg’s

“We need a better, more complete interpreted information

picture. I believe companies that don’t do this, and don’t

do this well, won’t succeed – this is a life and death

issue.”

President of Kellogg’s

Why CI ?

“The most meaningful way to differentiate your company from the your competitors, is to do an excellent job

with information.”

Bill GatesBill Gates

“The most meaningful way to differentiate your company from the your competitors, is to do an excellent job

with information.”

Bill GatesBill Gates

“What enables the wise sovereign and the good general to

strike and conquer , and achieve things beyond the reach of

ordinary men, is foreknowledge.

This foreknowledge cannot be elicited from spirits nor from

the gods; nor by inductive calculations. It can only be from

Why CI?

the gods; nor by inductive calculations. It can only be from

men who have knowledge on the enemy’s situation. . .

evaluate the enemy’s plans to determine which strategy will

succeed and which will not.”

Sun Tzu – 512 BC ( The Art of War)

“What enables the wise sovereign and the good general to

strike and conquer , and achieve things beyond the reach of

ordinary men, is foreknowledge.

This foreknowledge cannot be elicited from spirits nor from

the gods; nor by inductive calculations. It can only be from the gods; nor by inductive calculations. It can only be from

men who have knowledge on the enemy’s situation. . .

evaluate the enemy’s plans to determine which strategy will

succeed and which will not.”

512 BC ( The Art of War)

“I can’t imagine a more appropriate time to be talking about

Competitive Intelligence than right now for I can't imagine

a time in history when the competencies, the skills and the

knowledge of men and women in CI are more needed and

more relevant to a company being able to design a

winning strategy and act on it.”

Why CI?

winning strategy and act on it.”

John E Pepper, Chairman, Proctor & Gamble

“I can’t imagine a more appropriate time to be talking about

Competitive Intelligence than right now for I can't imagine

a time in history when the competencies, the skills and the

knowledge of men and women in CI are more needed and

more relevant to a company being able to design a

winning strategy and act on it.”winning strategy and act on it.”

John E Pepper, Chairman, Proctor & Gamble

Benefits of CI

The benefits that a CI program may provide will depend most upon your needs. You may use CI to:

• Understand your customers’ needs and their preferred solution

• Provide a superior solution for the market• Anticipate changes in the marketplace• Anticipate actions and reactions of competitors• Anticipate actions and reactions of competitors• Discover emerging competitors• Learn from others' successes and failures• Improve acquisition activities• Learn about new technologies, products & processes that affect your business

The benefits that a CI program may provide will depend most upon your needs. You may use CI to:

Understand your customers’ needs and their preferred

Provide a superior solution for the marketAnticipate changes in the marketplaceAnticipate actions and reactions of competitorsAnticipate actions and reactions of competitorsDiscover emerging competitorsLearn from others' successes and failuresImprove acquisition activitiesLearn about new technologies, products & processes that

Playing field

CI resides in various elements of the Competitive Environment:

1. Industry2. Market (customers, suppliers etc.)3. Competitors

Reliable CI must be considered in the context of the environment. Your company, customers, competitors, environment. Your company, customers, competitors, government and suppliers are all a part of the competitive environment.

CI resides in various elements of the Competitive

Market (customers, suppliers etc.)

Reliable CI must be considered in the context of the environment. Your company, customers, competitors, environment. Your company, customers, competitors, government and suppliers are all a part of the competitive

Competitive environment

• Each company’s CE differs

• For a wine industry player priority attention would be given to:

– Risk matters

– Customers (changes, needs etc.)

– Competitors (products, price, alliances etc.)

– Heath and Safety issues– Heath and Safety issues

– Technology

Competitive environment

For a wine industry player priority attention would be

Customers (changes, needs etc.)

Competitors (products, price, alliances etc.)

CI process and productsCI process and productsCI process and productsCI process and products

A process to turn data into wisdom

WisdomAction

Intelligence/knowledgeInterpreted information

IntelligenceIntelligence

InformationContextualised & organised

data

DataBit and pieces of seemingly unrelated facts

A process to turn data into wisdom

WisdomAction

Intelligence/knowledgeInterpreted information

CompetitiveCompetitive

KnowledgeKnowledge

InformationContextualised & organised

data

DataBit and pieces of seemingly unrelated facts

CI process

Planning &Direction

1.Identify KIN

Strategic direction

Users &Decision Makers

Analysis & Interpretation

3/4. MakingIntelligence

Actionable & Understandable & Reporting

Users

Dissemination

Planning &Direction

Info.Processing& Storing

Strategic direction

Collection

Analysis & Interpretation

2. IntelligenceCollection & Reporting

Communication

THE INTELLIGENCE CLIENT SAYS...

• “You need to understand that I don’t have enough time to do my job. I don’t have time for academic stuff. My attention span is very short. Combine my lack of time and the feeling that I have a tough sales call to make

• I like my intelligence fast and I like to understand the facts and hear an answer to the So What?So What?hear an answer to the So What?So What?

• Within a minute of your call, I am starting to form conclusions about whether I want to keep listening or not

• I also want it actionable and integratedactionable and integratedpuzzle on my carpet and sit there guessing with me what sort of picture it will make. Put it together and then come and see me. You don’t need to make cosmic predictions

• Rather say you have gone out and collected information, you’ve reflected and your view is we’re 95% on the right track, but need to make a few adjustments”

THE INTELLIGENCE CLIENT SAYS...

“You need to understand that I don’t have enough time to do my job. I don’t have time for academic stuff. My attention span is very short. Combine my lack of time and the feeling that I have a tough sales call to makeI like my intelligence fast and I like to understand the facts and

So What?So What? question So What?So What? question Within a minute of your call, I am starting to form conclusions about whether I want to keep listening or not

actionable and integratedactionable and integrated. Don’t throw out a puzzle on my carpet and sit there guessing with me what sort of picture it will make. Put it together and then come and see me. You don’t need to make cosmic predictionsRather say you have gone out and collected information, you’ve reflected and your view is we’re 95% on the right track, but need to make a few adjustments”

Critical success factors for CIBasic principles to develop intelligence within an organisation

• A TOP LEVEL CHAMPION / SPONSOR

• Must be INTEGRATED COMPANY-

• Requires a PASSION / CULTURE OF COMPETITIVENESS

• Needs appropriate STRUCTURES / PROCESS• Needs appropriate STRUCTURES / PROCESS

• Needs RIGHT PEOPLE e.g. CI Manager, Analyst, Researcher, Network,

etc.

• Requires TOP MANAGEMENT PARTICIPATION and UTILISATION

• requires intelligence to be ROUTINE INPUT

Critical success factors for CIBasic principles to develop intelligence within an organisation

TOP LEVEL CHAMPION / SPONSOR

-WIDE – nervous system of a whole

PASSION / CULTURE OF COMPETITIVENESS

STRUCTURES / PROCESSSTRUCTURES / PROCESS

e.g. CI Manager, Analyst, Researcher, Network,

TOP MANAGEMENT PARTICIPATION and UTILISATION

ROUTINE INPUT to strategic planning

Case studies in CICase studies in CI

How a multi national company conducts CI

A case study…

How a multi national company conducts CI

A case study…

Case Study SASA

• Toyota SA integral part of global Toyota (Japan)

• Japanese traditionally global leaders in CI

• Automotive industry in flux, highly competitive, shifting

powers

• CI not viewed as separate activity

CI in Toyota SA

Toyota SA in competitive perspective…

• CI not viewed as separate activity

company

Toyota SA integral part of global Toyota (Japan)

Japanese traditionally global leaders in CI

Automotive industry in flux, highly competitive, shifting

CI not viewed as separate activity – it permeates whole

Toyota SA in competitive perspective…

CI not viewed as separate activity – it permeates whole

• Previously Toyota, like many

industries in SA was fairly protected

global business

• Now part of bigger, largely

requiring they look at a bigger

Approach to CI

requiring they look at a bigger

• Therefore, Toyota approaches

as being part of an open system

and feedback within the CE

• This systems approach is a

in Toyota

many other companies and

protected from the forces of

largely unprotected environment

bigger environment and systembigger environment and system

approaches CI / its competitive position

system - input – process - output

way of thinking, a philosophy

Approach to CI

“Toyota is an integrated complex of interdependent parts

that are capable of accurate interactions among

themselves and within their respective environments.

All these pieces are part of a large picture that should

then be analysed and interpreted and possible then be analysed and interpreted and possible

outcomes derived on which counter measures and

action is based.” (President, Dr Johan van Zyl)

an integrated complex of interdependent parts

that are capable of accurate interactions among

themselves and within their respective environments.

pieces are part of a large picture that should

then be analysed and interpreted and possible then be analysed and interpreted and possible

outcomes derived on which counter measures and

(President, Dr Johan van Zyl)

• Strong marketing focus on SA

• Close eye on competitor actions

• Also monitor other competitive

• Close to dealer network (lookas sources of information)

Planning and focus

as sources of information)

• Supplier focus – ‘one cannot

• Labour actions

• Technological research intoinnovation and predicting -hydro) and local market’s acceptance

SA market

actions in SA of car makers

competitive forces: Gautrain / taxi recap

(look at their finances but also used

exist without the other’

into relevant technical tracking,- alternative fuels (fossil fuels,

acceptance level for such vehicles

CollectionImpactAnalysis

Analysis

Process and structure

Integrated process

Each subsidiary doesown collection/analysis –

“NariyokiHighly centralised:

Japan

own collection/analysis –Results fed to Japan for

Impact analysis & planning

ImplementationImpactAnalysis

Plans

Process and structure

Nariyoki”Highly centralised:

Japan

Collection

Economic Environment Scan

Internal Sources External SourcesAnalysis Econom ic Publications

Average Forecast Financial Magazines

Board Discussions Newspapers

Econom ic Newsletter BanksDiscussions Presentation by Economists

Bi-annual BER Seminars

Industry Discussion Groups

InternetFocus

Influence on the market

Econom ic parameters

Internal analysis

Marketing strategy Product strategyDemand/sales plan Best product to satisfy market

SourcesInternalDealersResearch dept.NAAMSANAACAMSuppliersCustomer surveys

Market & Environment analysis

Internal Sources External SourcesMarket research NAAMSAInternal experts Magazines & publications

Newspapers

Internet

Focus

Market segmentation Customer segmentationMarket growth Cyclical changes

Demand/sales plan Best product to satisfy marketMarketing plan Product specifications

Distribution network Pricing strategy

Financial strategy Production strategyCapital expenditure Local vs. imported

Cost/profit Cost/quality

International Environment Scan

Internal Sources External SourcesAnalysis & discussions Publications & magazines

Research Government Publications

Newspapers

ConsultantsInternet

FocusInfluence on local economy & market

Trade agreementsExchange rates

Internal analysis

Product strategyBest product to satisfy market

Sources

Research dept.

Customer surveys

Competitors analysis

Internal Sources External SourcesMarket research NAAMSAInternal experts Magazines & publications

NewspapersPersonal contactsInternet

Focus

Product strategies Pricing strategiesMarket shares Marketing strategies

Technology CSIBusiness strategies Production strategies

Best product to satisfy marketProduct specifications

Pricing strategy

Production strategyLocal vs. importedCost/quality

Impact analysis “Nariyoki”Impact analysis “Nariyoki”

Actioning intelligence

• Top management commitment

• Analysis inclusive and centrally done and constantly

integrated with business planning process

• Research emphasis – not just more information

• Using advanced analysis techniques

modelling

• Intelligence reports very concise, short, accurate

Actioning intelligence

Top management commitment

Analysis inclusive and centrally done and constantly

with business planning process

not just more information

Using advanced analysis techniques - simulation &

Intelligence reports very concise, short, accurate

• Top management commitment

• Systematic thinking & future

• Allocating the right resources is important

• Using and implementing intelligence for strategies and

Lesson learnt

• Using and implementing intelligence for strategies and

counter strategies – it’s a need to have

• ‘Never take you eye off nay of the balls in the air

circus out there….’

• Competitiveness is our business

Top management commitment but more so, utilisation

Systematic thinking & future focus imperative

s is important

Using and implementing intelligence for strategies and Using and implementing intelligence for strategies and

it’s a need to have – not a nice to have

‘Never take you eye off nay of the balls in the air – it’s a

Competitiveness is our business

DiscussionDiscussionContact: Marie-Luce Kuhn (Muller)

[email protected]

DiscussionDiscussionLuce Kuhn (Muller)

[email protected]

SAWIS CI PRESENTATION 310511

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