Fundamentals of Competitive Intelligence (CI) This slide presentation will outline the “nuts and bolts” behind the competitive intelligence process. Matt H. Evans, CPA, CMA, CFM 12/3/2018

Why Competitive Intelligence? The only company’s that don’t need competitive intelligence are those with no competition. In a world of hyper-competition (lower barriers to entry, global marketplace, customer focus, etc.), few companies can abstain from some form of competitive intelligence. Even if you don’t have competition, competitive intelligence will generate numerous benefits: early warning systems, more accurate forecasting, business development, market research, due diligence, etc. Matt H. Evans, CPA, CMA, CFM 12/3/2018

The Essence of CI Competitive Intelligence is about Strategic Business Analysis. Strategic Business Analysis answers all types of questions confronted by business. In order to answer strategic business questions, we need “intelligence” and not information. Matt H. Evans, CPA, CMA, CFM 12/3/2018

What is Intelligence? Unlike data or information, intelligence gives us insights into what we think will happen based on past behavior. Competitive Intelligence is forward thinking and the most recent information has the most relevancy to giving us insights into the future. In order to create intelligence, we must go through a conversion process. Matt H. Evans, CPA, CMA, CFM 12/3/2018

The CI Conversion Process By synthesizing and analyzing data, we can transform data into information. Next we apply high levels of experience and insights to information, transforming it into intelligence. And if we can “act” on the intelligence, then it is value added by helping us in strategic decision making. Matt H. Evans, CPA, CMA, CFM 12/3/2018

CI Conversion Diagram Matt H. Evans, CPA, CMA, CFM 12/3/2018

Major Goal of CI The main objective behind competitive intelligence is to create and / or maintain a competitive advantage against the competition. By using “intelligence” we can anticipate what will happen in the future and this helps us create / maintain a competitive advantage and ultimately allows us to become a market leader in our industry. Matt H. Evans, CPA, CMA, CFM 12/3/2018

Numerous Benefits of CI Although competitive advantage is the main benefit of CI, there are numerous ways of leveraging CI: Benchmarking for Best Practices Product Pricing Merger & Acquisition Research Validate or Invalidate Rumors Speculating in Uncertain Markets Matt H. Evans, CPA, CMA, CFM 12/3/2018

Define the CI Universe CI Professionals often need to define a CI Universe so they can focus on the most important things first. A business environment map will outline forces that impact a company, such as social change, customers, new competition, regulatory change, etc. We can layer these forces to distinguish levels of importance for each force. Matt H. Evans, CPA, CMA, CFM 12/3/2018

Business Environment Map Matt H. Evans, CPA, CMA, CFM 12/3/2018

CI Project Management For the most part, competitive intelligence is executed as a project. And most projects are very fast and tight since management needs answers quickly. Example: On September 12, 2001, almost every American Corporation with operations in Pakistan went to their CI Departments and asked: Do we need to pull out of Pakistan and what financial impact will this have on our company? And I need an answer by the end of the week. Matt H. Evans, CPA, CMA, CFM 12/3/2018

The CI Analytical Process Competitive Intelligence Projects follow the scientific approach to problem solving: 1. Define the Question 2. Gather Data 3. Organize the Data 4. Synthesize and Filter the Data 5. Analyze appropriate data Matt H. Evans, CPA, CMA, CFM 12/3/2018

The CI Analytical Process (continued) 6. Prepare your findings 7. Draw meaningful insights 8. Prepare recommendations 9. Draft CI Report 10. Review and Approve Report 11. Issue Report 12. Follow-up and correct process. Matt H. Evans, CPA, CMA, CFM 12/3/2018

The Most Important Step Defining the Question is critically important since all remaining steps feed from this initial step. Example: CEO requests information on the consumption of wine in the United States. CI process must narrow the question down. CEO now says he really is only interested in male consumption of red wine in Northern California. By defining the exact question, we create a realistic scope for our CI Project. We can also flip the process backwards and ask the CEO: How do you plan on using this CI information? Matt H. Evans, CPA, CMA, CFM 12/3/2018

CI Life Cycle CI Projects typically have very short cycles: Define Question (time varies widely) Gather Data (two weeks) Organize Data (two weeks) Analyze Appropriate Data (two weeks) Prepare Findings (1 week) Draft Report (1 week) Review / Approve ( 1 to 2 weeks) Matt H. Evans, CPA, CMA, CFM 12/3/2018

CI Filtering CI Projects almost always go through some type of filtering process: Some projects must be turned down to focus on the most strategic projects. CI resources may not be able to answer the question. Can the question be answered more quickly by another department? Does the question fit with the skills and capabilities of the CI Department? Matt H. Evans, CPA, CMA, CFM 12/3/2018

Sources for CI Most sources (70%-80%) for CI are secondary (not first hand), such as newspapers, journals, press releases, ads, web sites, etc. Primary sources (first hand) include interviews, surveys, and other direct research techniques. CI should try to enlist in-house experts. Larger companies should create and maintain a Yellow Pages of in-house experts. And yes, CI Professionals live by their rolodexes – the contacts and sources for completing their CI Projects. Matt H. Evans, CPA, CMA, CFM 12/3/2018

CI Characteristics Competitive Intelligence should: Link behavior and patterns so that we can gain insight into the future. Serve as an internal advisory service within the company. Not be afraid of telling the truth. Be accepted by management as a reality check for making strategic decisions. Matt H. Evans, CPA, CMA, CFM 12/3/2018

CI Prevention One of the most “forgotten” components within competitive intelligence is prevention. Don’t forget, your competition is doing competitive intelligence against you. You need CI Prevention. For example, only put minimal information into your regulatory filings. Be careful how you release information! And best of all, don’t be predictable in your strategic behavior. Matt H. Evans, CPA, CMA, CFM 12/3/2018

Getting Started Finally, one way to get started in the field of CI is to join the Society of Competitive Intelligence Professionals: SCIP 1700 Diagonal Rd Suite 600 Alexandria, VA 22314 (703) 739-0696 www.scip.org Matt H. Evans, CPA, CMA, CFM 12/3/2018