CP and CI

January 7, 2017

A recent report by Bloomberg News indicated that the US Justice Department has been “looking for the past two years into allegations of collusion among [generic drug] manufacturers.” The apparent reason is detailed in a study from a firm that “works with law firms to bring litigation against companies”. That study suggested such collusion, citing

“90 medicines whose prices were raised steeply and almost simultaneously by at least two manufacturers, even though there was no obvious reason for the increase, such as greater manufacturing costs.” [1]

But, even the authors of that report concede that the mere existence of such increases does not prove the kind of collusion which would violate US antitrust laws. To have a violation, there must be other “plus factors” involved in the pricing changes, converting what is known to antitrust lawyers as “conscious parallelism” (CP) into a legal violation.[2]

Well, you might say, what else besides agreements to set prices would explain these “almost simultaneous” price changes? How about aggressive and effective competitive intelligence (CI) rapidly alerting one competitor to the pricing changes initiated by another direct competitor in a very constrained market space allowing a rapid exploitation?

But doesn’t that mean that CI contributes to violating the antitrust laws? No. As was said by a US Antitrust Division field office chief in 1989 (!), CI, he said,

“enables companies to take appropriate actions, thus improving their positions. Consequently, a company’s [competitive] intelligence department supplying intelligence to its own management would be viewed as ‘pro-competitive’ and therefore a legitimate activity, not directly affected by antitrust laws.”[3]

Just a thought.

[1] “Widespread drug price increases point to collusion, study finds”, http://www.readingeagle.com/ap/article/widespread-drug-price-increases-point-to-collusion-study-finds.

[2] “Conscious Parallelism: Can it turn a corner?” By Robert A. Jablon, http://www.spiegelmcd.com/files/raj_conscious_parallelism_2011_11_07_12_49_22.pdf.

[3] “Panel on Legal and Ethical Concerns of Conducting Intelligence – Summary of Spring Conference Panel Presentations by Jan Herring, The Futures Group, Panel Moderator”, Competitive Intelligencer, Vol. 4, Issue 2, August 1989, pp. 2, 18. (emphasis in the original)

Happy Holidays!

I will be back online the week of January 2, 2017.

Asking the Right Questions

November 23, 2015

I just finished rereading a provocative book, Freakonomics[1]. When I finished, I realized it posited a situation similar to that raised by Superforecasting[2]. That is, to get an answer a problem, particularly a vexing one, you must ask the right question. And, as these books show, many times we do not do that.

What does that mean to those of us in CI? It means stepping back from “the problem” and clearing our head before we start our research and analysis.

Let me give an example from current headlines on terrorism. The US has bombing campaign underway against ISIS, and has been using killer drones to “decapitate” various terrorist groups.

Looking at them, it appears that they are the answers to the question “How can we destroy terrorist activity using aviation resources?” The answer is bombing and drones. Simple. But should the real questions be, instead,

Can we completely destroy terrorist activity using airborne resources? Have we or anyone else ever done that before?

Is decapitation (by any means) an effective way to destroy a terrorist group? When and where has that happened? Did it last?

What we have, it appears, is the generation of a military strategy based on Mark Twain’s observation: “To a man with a hammer, everything looks like a nail.” So, to a nation with the largest air force in the world and the greatest number of drones, eliminating terrorism looks like an air power problem.

This blinder effect is not limited to governments. It exists, to a great degree, in the business world as well. Take for example a question that might occur to you: How can my firm increase its market share in our largest product sector without reducing profit margins? Wrong question – you have already assumed away several significant questions:

Should my firm increase its market share? Is there a risk of increased anti-trust supervision, or of betting the company’s future by increasing its reliance on one product sector? How are those VHSs working out for you?

Can we actually hold profit margins at the current level? Are they now artificially high? Is this a market that is trending towards commoditization, so that profit margins will inevitably decline, making any quest for steady margins a fool’s errand?

The lesson for those of us in CI is clear: by carefully articulating and then methodically reviewing the questions we ask (or are asked by others), we can and must avoid (or at least diminish) the impact of our own and our firm’s built-in blinders in our research and analysis. Remember, by asking the wrong questions, you will never get the right answers.

[1] Steven D. Levitt and Stephen J. Dubner, Freakeconomics: A Rogue Economist Explores the Hidden Side of Everything, William Morrow, 2006 (Revised and expanded edition).

[2] Philip E. Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction, Crown Publishing, New York, 2015, which I recently discussed at https://diy-ci.com/2015/11/09/can-you-really-do-long-range-forecasting/.


November 19, 2015


There will be no blog this week in light of the tragedies in Paris. Pray for the victims and their families and that our leaders will do everything they can to protect all of us.

This is Your Brain on CI – Part 3 of 3

July 23, 2015

When you are doing competitive intelligence (CI) research and analysis, you are relying on your own intelligence to drive that research and analysis. But your brain, like any other part of your body, needs proper care and conditioning. What follows here and in the previous parts[1] are a few notes on what works for me – and has worked for others as well. Your suggestions and comments are, of course, very welcome.

In this third part, let me deal with conditioning your brain. Most people take better care of their cars, lawn mowers, and TVs than they do of their bodies. By that, I mean getting and keeping it in condition as when you train your body to support physical changes that you are facing, such as healing, building muscle, losing weight, or gaining new skills.

First of all, take good care of your body. Your brain depends on your body. In fact, your brain is the involuntary passenger in your body, as well as its governing body. Watch what you eat; rest – you probably do not get enough rest; exercise – in moderation; head off physical and medical issues – don’t wait until it is too late.

Second, add more relaxation into your schedule. By that, I mean things such as:

  • Step away from the computer – regularly.
  • Turn off the smart phone. We subconsciously react to hearing the cell phone acknowledge a message or call when we cannot take it. In other words, you do not ignore your smart phone unless it is completely off.
  • Set an “end time” to your work day. If you put yourself (or find yourself) on call well after working hours week after week, ask yourself why? Are you, your team, or your boss mishandling your time? Try and correct that.
  • Add something new to do where you cannot think of work, personal issues, or when you are scheduled for an oil change while you are doing it. This is why many people find things like fly-fishing or gardening relaxing. They are relaxing because they are forced to focus away from things they normally are forced to focus on.

Third, improve your current relaxation – make it better. How?:

  • Find ways to protect your current ways of relaxing from intrusion. Completely turn off that phone when you are jogging or exercising (see above).
  • Extend your relaxation by adding something a little different. For example, if you are a coin collector, spend a little time reading about precious metal metallurgy or the history of some regime or historical era that represents an interesting element in your collection. In other words, look at something familiar differently.

Think of your conditioning mind in terms of balancing visual versus arithmetic, factual versus artistic, scientific versus historic, etc.

[1] https://diy-ci.com/2015/07/07/this-is-your-brain-on-ci-part-1-of-3/ and https://diy-ci.com/2015/07/14/this-is-your-brain-on-ci-part-2-of-3/.

Vacation Notice

December 16. 2014


My next blog will be in the week of January 5, 2015. Have a very happy holiday season!

Vacation Notice

The next blog will be posted in the week of November 29, 2014. Have a Happy Thanksgiving!