Competitive intelligence in action: how do organizations use competitive intelligence, and what can it mean to their success? Two case studies illustrate different approaches and results.

• Author: McGonagle, John J., Jr.
• Position: Business Matters

At the Core

This article

* discuss the use of CI in two companies

* examines the strategic use of internal information and records within the two firms

* explores the effect of CI on each organization

Competitive intelligence (CI) is increasingly being considered an important, if not mandatory, piece of every business' overall strategy and functioning. If developed and used in the right way, CI can boost a business' bottom line as well. But the key is developing and using it in the right way, based on a particular business' needs, organization, and competition.

This article presents two case studies that illustrate real world examples of how CI was developed and employed in very different firms, answering such questions as:

* Where did the idea of CI originate internally?

* Who are CI's champions, and how have they benefited?

* What was CI's effect on revenue?

* What approaches/strategies were used--internal, contracting out, consultants?

* What has worked and what has not?

* How were internal information/ records used strategically?

The names of the companies involved have been omitted for confidentiality and competitive reasons, since knowing how Firm A runs its CI program is, in and of itself, competitively sensitive and valuable intelligence. The competitive sectors involved are also not precisely drawn because, in one case, identifying the competitive market being served would be the equivalent of disclosing the firm's name. Detailing the specific market niche does not add to the lessons to be learned, and may, in fact, make it harder to clarify those lessons. But rest assured, these cases are real, current, and accurate.

Case 1: Financial Services

The first company is a large financial services firm that has been a part of the U.S. business landscape for more than 100 years. This firm first became involved with CI when marketing managers in one of its key business units realized that the competitive environment was becoming more difficult to deal with. They first hired a manager who had been in charge of CI at a much smaller firm. His job was to build the capacity to collect CI and to educate management about its importance and use.

Within 18 months or so, this manager began to see results. At first, he used internal research assistance, searching secondary literature for data and using online databases to stay aware of breaking news. As internal customers began to see the value of CI, the manager recruited several experienced CI research firms to provide supporting field research. The concept was that these firms would all be pre-qualified to work on CI and that the CI manager could offer projects to one or more of them.

This outsourcing of large, complex CI research and analysis projects quickly proved its worth. The CI research firms were usually given projects entailing significant field research, many interviews, and a competitive issue of major significance and importance to the firm. The mix of CI firms used varied over time as some were dropped and others replaced.

Initially, the CI unit had been providing CI to the sales and marketing functions and assignments and CI targets came to the unit through existing market research channels. But over time, the CI unit changed its tactics to deal directly with the sales function to better determine CI needs as well as to collect raw data from it.

One key initiative was periodic competitive briefings given by the CI unit to sales personnel. At those conferences, which could be either in person or by telephone, the CI unit also received first-hand data from the sales force and was able to probe these individuals for data that the CI unit would need for other tasks.

To supplement the briefings, the CI unit later established databases that are still updated on a regular basis. These databases provide a self-serve supplement to the regular CI research projects. Initially, they were not used often, but now there are thousands of database inquiries each month.

Since then, the CI unit has become larger, with individual CI professionals assigned to serve particular product groups. The CI unit, from an organizational point of view, remained grouped with...