1. INFORMATION FROM THE CUTTING EDGE TM Breaking the CI Turnover Cycle © 2007 Cutting Edge Information Elio Evangelista, Senior Analyst elio_evangelista@ cuttingedgeinfo.com www.CuttingEdgeInfo.com

2. INFORMATION FROM THE CUTTING EDGE TM Competitive Intelligence in Sports 2000, 2001, 2002, 2003, 2006 1996 1997

3. INFORMATION FROM THE CUTTING EDGE TM Key Idea #1: CI Teams are in Danger Break the Cyclical Turnover Give CI Teams More Time Communicate Successes Constantly

4. INFORMATION FROM THE CUTTING EDGE TM The CI Cycle Time (in years) Team Size 05 n

5. INFORMATION FROM THE CUTTING EDGE TM Years CI Has Been in Place Though some groups have been in place for more than 20 years, in general, CI is a young function at most companies. 0 5 10 15 20 25 0.2 0.5 111 2 4 555 7 10 20 23 6 AverageCDBJHKMAEFG O LINP Years in Place

6. INFORMATION FROM THE CUTTING EDGE TM Its relatively easy to produce these reports, it is hard to make sure people know where to get them and actually use them when they are planning. - Interviewed Competitive Intelligence Manager Voice of CI – Communicating the Results

7. INFORMATION FROM THE CUTTING EDGE TM Communication Through the Organization CI CEO X

8. INFORMATION FROM THE CUTTING EDGE TM Key Idea #2: CI Structures Sometimes Inhibit Success Utilize the CI/Market Research Overlap Establish a Proactive CI Team

9. INFORMATION FROM THE CUTTING EDGE TM To Which Department Does CI Report? CEO: 13% Market Research: 69% Business Development: 6% R&D: 6% Sales: 6%

10. INFORMATION FROM THE CUTTING EDGE TM Whenever we collect competitor information, we are in fact collecting competitive intelligence. - Interviewed Market Research Manager Voice of CI – Market Research Link

11. INFORMATION FROM THE CUTTING EDGE TM Percentage of Market Research Groups Collecting CI During Cutting Edge Informations study Pharmaceutical Market Research, researchers discovered that the vast majority of market research departments also collect competitive intelligence. Does Collect CI - 87% Does Not Collect CI - 13%

12. INFORMATION FROM THE CUTTING EDGE TM The CI/Market Research Overlap Past PresentFuture Market Research Competitive Intelligence Market Research focuses on: Current market conditions Market awareness for new products Potential sales forecasts based on historical data CI focuses on: Developing scenarios and alternative futures Scanning present-day data to forecast future events Preparing brands to proactively change strategy based on market indicators

13. INFORMATION FROM THE CUTTING EDGE TM Percent of respondents rating CI effective or very effective* Decision Support: 67% Market Monitoring: 67% Identify Market Opportunities: 66% Market Plan Development: 63% Market Plan Input: 57% 1 2 3 4 5 CIs Top 5 Marketing Roles *Source: Survey of SCIP members by The Pine Ridge Group, Inc. and T.W Powell Company

14. INFORMATION FROM THE CUTTING EDGE TM Centralized vs. Decentralized Prevalence According to our survey, a large majority of companies maintain a centralized, strategic CI groups. 75% 25% Centralized Decentralized

15. INFORMATION FROM THE CUTTING EDGE TM Centralized vs. Decentralized Tendencies Centralized CI groups are more strategically-oriented and, therefore, more proactive than decentralized units. Centrali zed Structur e Reactive Tacticall y Oriente d Strategically Oriented Proactiv e Decentralized Structure

16. INFORMATION FROM THE CUTTING EDGE TM Key Idea #3: Get Everyone Involved Build a CI Culture Integrate Internal Functions Establish Senior CI Leadership

17. INFORMATION FROM THE CUTTING EDGE TM Company As CI Reporting Structure Director of Strategic Research VP of R&D CEO Company A has two distinct CI units – one housed under business development and the other under marketing. Sr Director of Market Research Director of Marketing CI Sr VP of Market Research Sr VP of Marketing President

18. INFORMATION FROM THE CUTTING EDGE TM Company Os Field-Based CI Process Though it isnt mandated, the sales reps at Company O are encouraged to participate in collecting competitive intelligence. Data Sources Sales Reps Centralized Competitive Intelligence Unit Sales Directors

19. INFORMATION FROM THE CUTTING EDGE TM At Company C, the CI unit is a sister organization to the brand teams and is housed under marketing. With this structure, the group has more brand level tactical influence than company-wide influence. However, should an issue arise that needs company-wide attention, CI also has a dotted reporting line directly to the firms president. Competitive Intelligence Brand Team A Government Relations/ Regulatory Medical Relations Head of Marketing Brand Team BBrand Team DBrand Team C President Integrating CI into the Culture

20. INFORMATION FROM THE CUTTING EDGE TM Level of Executive Leading CI As seen, the majority of surveyed CI units are led by managers. However, 44% of firms employ someone more senior than a manager to head their CI departments. 56% 19% 6% 19% Manager Director Executive Director Senior Management

21. INFORMATION FROM THE CUTTING EDGE TM Experience Makes a Difference ABMFN I PAvg. 0.5 1.0 5.0 7.0 10.0 20.0 23.0 9.5 0.0 5.0 10.0 15.0 20.0 25.0 Years in Place 0.0 2.0 4.0 6.0 8.0 10.0 12.0 0.2 3.5 10.0 5.0 2.0 1.0 CEJHGOLAvg. Years in Place Number of Years CI has been in Place Where Senior Leaders Head the Group Number of Years CI has been in Place Where Managers Head the Group

22. INFORMATION FROM THE CUTTING EDGE TM Key Idea #4: Experience Makes a Difference Leverage Staff Experience Outsource CI Strategically Staff the CI Team Accordingly

23. INFORMATION FROM THE CUTTING EDGE TM Typical Experience Levels of CI Professionals On average, professionals in the CI field have 5.6 years of CI experience. 0 2 4 6 8 10 12 CG M NLAAverageH 22 33 4 55555 10 5.6 BFEIPDO Experience (in years)

24. INFORMATION FROM THE CUTTING EDGE TM Typical Experience Levels of CI New Hires A typical new hire in the CI field has 3.7 years of experience. 0 2 4 6 8 10 12 0 1 1.5 2.5 33333 55555 10 3.7 FINALEAverageODCGJBHPM Experience (in years)

25. INFORMATION FROM THE CUTTING EDGE TM Traits of Successful CI Analysts Communication and analytical skills rank tops among traits of successful CI employees, according to survey results. Leadership Persistence Innovative Strategy oriented Strong analytical thinking Communication skills Data oriented Strong intuition High ethical standards Market research experience Dedication Inquisitive 6% 31% 56% 63% 60% 81% 56% 0%20%40%60%80% 100% Percentage of Companies

26. INFORMATION FROM THE CUTTING EDGE TM Average Number of FTEs in CI Because CI groups outsource a great deal of work, they run their departments with a relatively low number of FTEs. 0 1 2 3 4 5 6 7 D OPCE G Average M 0 0.5 1111 1.3 333 4 555 6 2.7 IBNAFHJL Full-Time Equivalents (FTEs)

27. INFORMATION FROM THE CUTTING EDGE TM Percentage of Companies that Outsource Data Analysis Three-quarters of survey participants prefer to conduct their competitive intelligence analysis in-house as opposed to using a third-party. 75% 25% % of companies conducting data analysis in-house % of companies that outsource data analysis

28. INFORMATION FROM THE CUTTING EDGE TM Obviously, the focus on competitors is a unique purview of CI. CI has the greatest potential to see where competitors are going. - Interviewed Director of Competitive Intelligence Voice of CI – The Value of CI

29. INFORMATION FROM THE CUTTING EDGE TM Four Tenets of CI Communicate Successes Set Your Goals Get Top-Level Support/ Buy-in Stay On The Ball

30. INFORMATION FROM THE CUTTING EDGE TM Thank You! 4711 Hope Valley Rd, Suite 205 Durham, NC 27707 Tel:(919) 433-0214 Fax:(919) 433-0220 Email:elio_evangelista@cuttingedgeinfo.com