Guest Blog: Finding information from and on foreign countries, regions and markets

January 29, 2016

Arthur Weiss, Managing Director of AWARE in the UK, has given me permission to post an excellent article he wrote in 2014 for Business Information Review titled “Searching in a global environment: Finding information from and on foreign countries, regions and markets”.

This study provides an overview of the kinds of data available online around the world. Arthur focuses on what is there, why it is there, and what that means for the accuracy and comparability data. I strongly recommend it for anyone facing CI research issues outside of his/her home country.

Arthur Weiss is the managing director of AWARE, specializing in marketing and competitive intelligence training, analysis, and research. He has written and lectured globally on a variety of marketing intelligence and information industry related topics. Arthur can be contact from his website http://www.marketing-intelligence.co.uk and via email at a.weiss@aware.co.uk.


Company Policies on Collecting Competitive Intelligence (part 2)

January 26, 2016

Continuing on company policies on collecting CI, remember, one role for your firm’s policy is to help you and all other employees to resolve whether their actions, or planned actions, violate the law or the firm’s formal policies, covering legal or legal and ethical considerations. If the actions would be in violation in any way, then they should not be undertaken. But that is not the end. There is also the issue of personal ethical standards.

Only when an action is permitted under all relevant laws and your own firm’s policies might it involve a personal ethical question.

In resolving whether personal ethical issues are raised, use the following tests:

  • If an action doesn’t feel right, don’t do it.
  • If it could damage a business relationship, don’t do it.
  • If you or the firm would be embarrassed or ashamed if an account of your conduct were published on the front page of the newspaper, don’t do it.
  • If there is an alternative way of gathering information that produces equal or greater benefits to the parties affected by the proposed action and does not raise any ethical questions in your mind, you should use the alternative.

Company Policies on Collecting Competitive Intelligence (part 1)

January 19, 2016

Does your firm have a written policy that applies to competitive intelligence? Good. Read it. Follow it. But that is not all there is to dealing with a written policy.

Good written policies are just that, written policies. To protect your firm, it must have compliance. What does that include?

  • First, compliance requires knowledge. That, in turn, means you and any other DIYers should be trained on appropriate legal and ethical issues, and that training should be renewed on a regular basis.
  • Second, you should discuss specific ethical concerns with a supervisor. DIYers should be allowed, or even encouraged, to contact a designated, trained, and educated member of the legal team with any concerns they may have.
  • Third, you should make sure that contractors, consultants, and other third parties whose services you use have a formal policy dealing with the collection of CI data. That policy should be reviewed before any contract is signed or work begun. Then, the contractor should be made aware of your company’s policies, and agree, in writing, to be bound by them. If your company’s policies and contractor’s policies are in conflict, then the best solution is to have the contractor bound by the stricter of the two policies.
  • Fourth, every contractor should also agree that any work it subcontracts will be subject to the same standards. Requiring that you (or someone from legal) review any such subcontracts is a good way to protect your firm. I will cover more on that in a later blog on this.
  • Fifth, if necessary, contractors should be encouraged, or even required, to participate in company-approved training on legal and ethical CI issues.

 

 


What about Economic Competitive Intelligence?

January 15, 2016

Should economic intelligence as a part of CI? Well, yes, in part. Now here, I am not talking about macro-economics (the GDP of Spain) or micro-economics (the theory of the firm). I am talking about something else.

Let me give you an example – gasoline prices and supplies:

  • Experience shows that, if people see gasoline prices rising and believe that they are likely to continue to rise (inflation), they will fill up more frequently (topping off). The same is true if they see supplies tightening.
  • If drivers see prices falling and gasoline more easily available (as they are now), and believe that will continue, they will fill up less frequently (waiting for the price to drop a cent or two without worrying about local shortages).

These analyses are based on the use of the concepts of behavioral economics. Behavioral economics is just what it sounds like – the study and analysis of what drives the way people and institutions make economic decisions and take economic actions[1].

So where could behavioral economics help with CI? I can see at least two possible impacts:

  • If the economy or portion of the economy in question (that is the part of the economy facing your competitors) is trending in a particular direction, you should assume that your competitors are rational, and will therefore respond rationally. Given that, it can help you predict what they will do.
  • If you can discern the behavioral economic underpinnings of your competitor’s current economic actions and decisions by using a behavioral approach to dissect them, even if you believe their analysis and conclusions to be wrong, you are better positioned to predict what they will do in the near term.

“Prediction is very difficult, especially if it’s about the future.” Niels Bohr.

[1] Of course, behavioral economics tells us that if everyone thinks (mistakenly) that gasoline prices will rise in the future and that supplies will tighten, their collective (rational) actions will actually produce and prolong the very effect that they fear.


Is change coming?

January 5, 2016

Recent events seem to indicate changes in management and the economy that, in turn, should result in some changes in competitive intelligence. In spite of what they initially look like, they do not portend the demise of CI, but rather the need for reshaping of targets and techniques.

Let me go over them quickly:

  1. Some companies are becoming more “open”. According to a recent Fortune article, by that, they mean that they share more “confidential” information with their employees, such as their salaries, and that they may even be doing so with their competitors[1].

This sounds, at first, like it would eliminate the need for competitive intelligence. Why do you need to develop CI on your competitors when they will tell you what they are doing anyway? Well, there are several problems with that, ignoring the threat of disinformation. First they may be telling you what they would becomfortable withnyou knowing. Aren’t they more likely to tell you headcount and thev employee benefits package than they are to tell you acquisition and expansion plans or new product and service initiatives currently being researched. This attitude among companies simply changes the target for your CI – it doesn’t eliminate the need. You still need to know where they are going, but maybe not so much where they are.

  1. Another article in Fortune raises an interesting issue, the increasing speed with which programs (bots) can pick up changes on the Internet. In one case, a program picked up an accidental disclosure, an hour early, of an earnings report. Within 3 seconds of the posting, the bots had synthesized the information into a Tweet. “Four seconds after that the market was moving”.[2]

So, lets just rely on these bots to collect our CI, right? Not so fast. This bot picked up on the data, but the market moved because the data was acted on. Such software does not replace CI research and analysis. Nor can it “elicit” critical data from a careful interview. The bots only collect and report data that has been released, whether authorized or unauthorized, and whether of value or not. This kind of tool replaces CI to the same extent that electric saw replaces a carpenter. It is merely a tool, giving CI professionals an opportunity to locate, digest, and benefit from mistakes of competitors.

  1. There have been much written and said about the last several years’ pattern of mergers and acquisitions resulting in higher levels of concentration in many US industries. For example, the US airline industry is down to a mere handful of airlines when compared with 10-15 years ago[3]. The same is true for the US auto industry, which may shrink still further in the near future. Right now, we see efforts to stop a merger in the US office supply industry and expressions of concern about a pending mega-merger in the beer industry[4]. In the latter case, reports indicate that, in at least one non-US country the merger would result in having 95% of the market controlled by one company. As I recall from economics classes in college, that a monopoly. The rest of these may well be called duopolies or oligopolies.

Competition in such markets is different than in less concentrated, freer markets. That does not mean that the firms in these situations need to or can forgo collecting and using CI. As with the other two cases it means CI will have to change. Why? Because many a monopoly or oligopoly has fallen to pieces because the its members assumed that they could always control “their” market and did not pay attention to adjacent markets and companies (read did not use CI effectively):

  • For example, with the airline industry, CI’s targeting may well have to shift from fares and fees to developing CI on members of supply chains providing competitors with equipment, services, and passengers.
  • For the office supply industry, there are already indications that its concentration may not help, as small business owners are increasingly shopping at non-office supply stores like Costco[5]. Regardless of the merger’s outcome, that means a need to broaden CI targeting.
  • With respect to the beer industry, even the largest firms must keep an eye out for small firms, the micro brewers, craft breweries, and the like that either can grow into major competitors or, frankly, choose to compete on a different basis. In other words, they could become stealth competitors or outright disruptors.

Are monopolies, duopolies and oligopolies really that vulnerable? Yes. If you don’t think that is right, take a look at the articles written in business and academic journals about the future of OPEC, the organization of petroleum exporting come countries, during the “Arab oil boycott” in the 1970s[6]. There a handful of countries controlled the organization, OPEC, that then controlled much of the oil in the world. That boycott resulted in crushing pressures on the economies of nations that supported Israel.

Today we see Saudi Arabia, the leader of OPEC, positioning itself to try to destroy the US fracking industry in the hope of somehow restoring the power of OPEC and therefore raising the value of its oil (and that of OPEC members) from the current $20 or to $100 or more. The difference – the loss of billions of dollars per year for each OPEC member. The cause of the financial and political damage – disruptive and unanticipated competition from an unexpected source, a former major importer of oil, the United States, now using a previously unexploited technology, fracking.

“To improve is to change; to be perfect is to change often.”

Winston Churchill

[1] Geoff Colvin, The Benefit of Baring It All, Fortune, Dec. 15, 2015.

[2] Jen Wieczner, Trading on Tweets, Fortune, Dec. 15, 2015.

[3] “In 2005, the top 11 airlines comprising 96% of domestic market share by available seat miles were American, Delta, United, Continental, Northwest, Southwest, U.S. Airways, America West, Alaska, Jet Blue, and AirTran. This number has since been reduced to six airlines with 94% of U.S. market share by available seat miles in 2014….” http://marketrealist.com/2014/07/must-know-us-airline-industry-consolidation-and-restructuring/

[4] “Today’s top 5 [beer] companies represent more than 50% of the global market (versus 32% for the top 5 players in 2003) ….” http://www.businessinsider.com/global-beer-industry-consolidation-2014-2

[5] Nathan Layne and Nandita Bose, “Bulk retailers are hurting business at office supply stores,  Reuters, Feb. 5, 2015, http://www.businessinsider.com/r-shift-in-small-business-spending-may-curb-staples-office-depot-growth-2015-2.

[6] The Arab-dominated Organization of Petroleum Exporting Countries (OPEC) decided to cut oil exports to the nations that provided military aid to Israel in the Yom Kippur War of October 1973. That group included the United States.